HomeMy WebLinkAboutRes2016-052Sponsored by: Hunt
CITY OF SEWARD, ALASKA
RESOLUTION 2016-052
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE CITY OF SEWARD TO ISSUE HARBOR
IMPROVEMENT REVENUE REFUNDING BOND, 2016 IN THE
PRINCIPAL AMOUNT OF NOT TO EXCEED $1,300,000 TO REFUND
CERTAIN OUTSTANDING HARBOR IMPROVEMENT REVENUE BONDS
OF THE CITY, FIXING CERTAIN DETAILS OF SUCH BOND,
AUTHORIZING THE SALE OF SUCH BOND, AND PROVIDING FOR
RELATED MATTERS
WHEREAS, the City of Seward, Alaska (the "City") is a home rule city and under Section
11 of Article X of the Alaska Constitution may exercise all legislative power not prohibited by law
or the Charter of the City, and it has been determined that the matters set forth in this resolution are
not prohibited by law or the Charter; and
WHEREAS, there is now outstanding the principal amount of $1,265,000 of Harbor
Improvement Revenue Refunding Bond, 2007 of the City (the "2007 Bond") issued under Resolution
Nos. 2000-094 and 2006-128 of the City; and
WHEREAS, the Council finds that it is in the best interest of the City to provide for the
refunding, including the payment of principal of and interest on, those principal installments of the
2007 Bond maturing on and after December 1, 2017, in the aggregate principal amount of
$1,075,000, whose refunding the City Manager or City Finance Director determines will produce the
debt service savings specified in this resolution, by the issuance of a harbor improvement revenue
refunding bond in the aggregate principal amount of not to exceed $1,300,000 (the "Bond"); and
WHEREAS, Section 11.2(a) of the home rule charter of the City provides that the City may
issue refunding bonds without ratification of the voters; and
WHEREAS, the Council finds that it is necessary and appropriate to delegate to each of the
City Manager and City Finance Director authority to determine the principal installment amounts,
interest rates and other details of the Bond, and to determine other matters pertaining to the Bond
that are not provided for in this resolution; and
WHEREAS, the Alaska Municipal Bond Bank (the "Bond Bank") will purchase the Bond
with proceeds of its general obligation bonds pursuant to the terms of an amendatory loan agreement
(the "Amendatory Loan Agreement"); and
WHEREAS, the Amendatory Loan Agreement will amend the Loan Agreement dated as of
December 1, 2000, as amended on January 1, 2007, to provide for the refunding of the herein defined
CITY OF SEWARD, ALASKA
RESOLUTION 2016-052
Refunded Bond, and related matters.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA that:
Section 1. Definitions. Terms not herein defined shall have the meaning set forth in the
herein defined 2000 Resolution. The following terms shall have the following meanings in this
Resolution:
(A) "Amendatory Loan Agreement" means the Amendatory Loan Agreement between the
City and the Bond Bank, amending the Loan Agreement to provide for the refunding of the Refunded
Bond through their exchange for the Bond, and related matters.
(B) "Bond" means the "Harbor Improvement Revenue Refunding Bond, 2016" of the City
of Seward, the issuance and sale of which are authorized herein.
(C) "Bond Bank" means the Alaska Municipal Bond Bank, a public corporation of the
State of Alaska.
(D) "Bond Bank Bonds" means the General Obligation Refunding Bonds, 2016 Series
Three (Governmental Purpose) of the Bond Bank.
(E) "Bond Re ig ster" means the registration books maintained by the Registrar, which
include the names and addresses of the Registered Owners of the Bond or their nominees.
(F) "City" means the City of Seward, a municipal corporation of the State of Alaska,
organized as a home rule city under Title 29 of the Alaska Statutes.
(G) "City Finance Director" means the Finance Director of the City.
(H) "Code" means the Internal Revenue Code of 1986, as amended from time to time,
together with all regulations applicable thereto.
(I) "Continuing Disclosure Certificate" means a certificate relating to the 2016 Bond
executed in connection, and delivered by the City, with respect to compliance with paragraph (b)(5)
of Rule 15c2-12 of the Securities and Exchange Commission, as such certificate may be amended or
supplemented from time to time.
(J) "Council" means the Council of the City of Seward, as the general legislative
authority of the City of Seward, as the same shall be duly and regularly constituted from time to time.
(K) "Loan Agreement" means the Loan Agreement between the City and the Bond Bank
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CITY OF SEWARD, ALASKA
RESOLUTION 2016-052
dated as of December 1, 2000, as amended on January 1, 2007, and as further amended by the
Amendatory Loan Agreement.
(L) "Refunded Bond" means the principal installments of the 2007 Bond whose refunding
is approved by the City Manager or City Finance Director under Section 12.
(M) "Registered Owner" means the person named as the registered owner of a Bond in the
Bond Register.
(N) "Re isg tray" means the City Finance Director.
(0) "Resolution" means this Resolution 2016-of the City.
(P) "2000 Resolution" means the City's Resolution 2000-94, approved by the Council on
September 11, 2000, authorizing the issuance of harbor revenue bonds.
(Q) "2006 Resolution" means the City's Resolution 2006-128, approved by the Council on
November 27, 2006, authorizing the issuance and sale of the 2007 Bond.
(R) "2007 Bond" means the outstanding $1,265,000 Harbor Improvement Revenue
Refunding Bond, 2007 of the City.
Section 2. Authorization of Bond and Purpose of Issuance. For the purpose of effecting the
refunding by exchange of the Refunded Bond in the manner set forth hereinafter and in the
Amendatory Loan Agreement, the City hereby authorizes and determines to issue and sell the Bond
in the aggregate principal amount of not to exceed $1,300,000.
Section 3.Obligation of Bond. The Pledged Revenues, as defined in the 2000 Resolution, are
hereby pledged to the payment of the principal of and interest on the Bond as the same become due
and payable.
Section 4. Designation, Maturities, Interest Rates, and Other Details of the Bond. The Bond
shall be designated "City of Seward, Alaska, Harbor Improvement Revenue Refunding Bond, 2016."
The Bond shall be in denominations of $5,000 or any integral multiple thereof and with such
designation as the Registrar deems necessary for purposes of identification, and may have endorsed
thereon such legends or text as may be necessary or appropriate to conform to the rules and
regulations of any governmental authority or any usage or requirement of law with respect thereto.
Installments of principal of the Bond shall be paid annually commencing on or after January
1, 2017 and continuing no later than December 31, 2021. The Bond shall bear interest from its dated
date, payment commencing on a date on or after December 1, 2016, and semi-annually thereafter in
each year. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day
CITY OF SEWARD, ALASKA
RESOLUTION 2016-052
months.
The dated date, the principal and interest payment dates, the aggregate principal amount, the
principal amount of each installment, and the interest rates for each principal installment of the Bond
shall be determined at the time of execution of the Amendatory Loan Agreement under Section 16.
Section 5. Redemption. The Bond may not be redeemed prior to maturity.
Section 6. Form of Bond. The Bond shall be in substantially the following form, with such
variations, omissions and insertions as may be required or permitted by this Resolution:
UNITED STATES OF AMERICA
STATE OF ALASKA
CITY OF SEWARD
(A Municipal Corporation of the State of Alaska)
NO. $
HARBOR IMPROVEMENT REVENUE REFUNDING BOND, 2016
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The City of Seward (the "City"), a municipal corporation of the state of Alaska, hereby
acknowledges itself to owe and for value received promises to pay to the Registered Owner
identified above, its registered assigns, the Principal Amount indicated above in the following
installments on December of each of the following years, and to pay interest on such installments
from the date hereof, payable on June 1, 20 and semiannually thereafter on the 1st days of
December and June of each year, at the rates per annum as follows:
Principal Interest
Year Amount Rate
This Bond is a special limited obligation of the City of Seward, payable solely from Pledged
Revenues as the same shall become due. The full faith and credit of the City are not pledged for the
CITY OF SEWARD, ALASKA
RESOLUTION 2016-012
payment of the principal of and interest on the Bond.
For so long as this Bond is owned by the Alaska Municipal Bond Bank (the "Bond Bank"),
payment of principal and interest shall be made as provided in the Loan Agreement between the
Bond Bank and the City, dated as of December 1, 2000, as amended on January 1, 2007 and
November _, 2016 (collectively, the "Loan Agreement"). In the event that this Bond is no longer
owned by the Bond Bank, installments of principal and interest on this Bond shall be paid by check
or draft mailed by first class mall to the Registered Owner as of the close of business on the fifteenth
day of the month preceding each installment payment date; provided that the final installment of
principal and interest on this Bond shall be payable upon presentation and surrender of this Bond by
the Registered Owner at the office of the Registrar. Interest will be computed on the basis of a 360-
day year consisting of twelve 30-day months. Both principal of and interest on this Bond are payable
in lawful money of the United States of America which, on the respective dates of payment thereof,
shall be legal tender for the payment of public and private debts.
This Bond the Harbor Improvement Revenue Refunding Bond, 2016 of the City of Seward,
Alaska, aggregating $ in principal amount, and constituting the Bond authorized
for the purpose of refunding a certain harbor revenue bonds issued by the City, and is issued under
Resolution 2016- of the City entitled:
A RESOLUTION AUTHORIZING THE CITY OF SEWARD TO ISSUE HARBOR
IMPROVEMENT REVENUE REFUNDING BOND, 2016 IN THE PRINCIPAL
AMOUNT OF NOT TO EXCEED $1,300,000 TO REFUND CERTAIN
OUTSTANDING HARBOR IMPROVEMENT REVENUE REFUNDING BONDS
OF THE CITY, FIXING CERTAIN DETAILS OF SUCH BOND AND
AUTHORIZING THE SALE OF SUCH BOND, AND PROVIDING FOR
RELATED MATTERS
(the "Resolution")
This Bond is not subject to redemption prior to maturity.
This Bond is transferable as provided in the Resolution, (i) only upon the bond register of the
City, and (ii) upon surrender of this Bond together with a written instrument of transfer duly
executed by the registered owner or the duly authorized attorney of the registered owner, and
thereupon a new fully registered Bond or Bonds in the same aggregate principal amount and maturity
shall be issued to the transferee in exchange therefor as provided in the Resolution and upon the
payment of charges, if any, as therein prescribed. The City may treat and consider the person in
whose name this Bond is registered as the absolute owner hereof for the purpose of receiving
payment of, or on account of, the principal or redemption price, if any, hereof and interest due hereon
and for all other purposes whatsoever.
CITY OF SEWARD, ALASKA
RESOLUTION 2016-052
IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts or things required by
the constitution or statutes of the State of Alaska and the home rule charter of the City to exist, to
have happened or to have been performed precedent to or in the issuance of this Bond exist, have
happened and have been performed, and that this Bond, together with all other indebtedness of the
City, is within every debt and other limit prescribed by said constitution, statutes, or charter.
IN WITNESS WHEREOF, THE CITY OF SEWARD, ALASKA, has caused this Bond to be
signed in its name and on its behalf by the manual or facsimile signature of its Mayor and its
corporate seal (or a facsimile thereof) to be impressed or otherwise reproduced hereon and attested
by the manual or facsimile signature of its Clerk, all as of the day of ,
2016.
ATTEST:
Johanna Kinney, CMC, City Clerk
[SEAL]
(Form of Assignment)
ASSIGNMENT
Mayor
FOR VALUE RECEIVED, the undersigned sells assigns and transfers unto
(Please insert Social Security or taxpayer identification number of transferee)
(Please print or typewrite name and address, including zip code of Transferee)
the within bond and does hereby irrevocably constitute and appoint , of
, or its successor, as Registrar, to transfer said bond on the books kept for
registration thereof with full power of substitution in the premises.
Dated:
1
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CITY OF SEWARD, ALASKA
RESOLUTION 2016-052
NOTE: The signature on this Assignment must
correspond with the name of the registered owner as it
appears upon the face of the within bond in every
particular, without alteration or enlargement or any
change whatever.
Signature Guaranteed:
Section 7. Execution. The Bond shall be executed in the name of the City by the Mayor or
her/his designee, and its corporate seal shall be impressed or otherwise reproduced thereon and
attested by the City Clerk. The execution of the Bond on behalf of the City by persons who at the
time of the execution are duly authorized to hold the proper offices shall be valid and sufficient for
all purposes, although any such person shall have ceased to hold office at the time of authentication
of the Bond or shall not have held office on the date of the Bond.
Section 8. Payment of Principal and Interest. The Bond shall be payable in lawful money of
the United States of America which at the time of payment is legal tender for the payment of public
and private debts. As long as the Bond Bank is the Registered Owner of the Bond, payment of
principal and interest on the Bond shall be made as provided in the Loan Agreement. If the Bond
Bank is no longer the Registered Owner of the Bond, installments of principal and interest on the
Bond shall be paid by check mailed by first class mail to the Registered Owner as of the fifteenth day
of the month preceding each installment payment date at the address appearing on the Bond Register;
provided that the final installment of principal and interest on the Bond shall be payable upon
presentation and surrender of the Bond by the Registered Owner at the office of the Registrar.
Section 9. Registration. The Bond shall be issued only in registered form as to both principal
and interest. The City designates the City Finance Director as Registrar for the Bond. The Registrar
shall keep, or cause to be kept, the Bond Register at the principal office of the City. The City
covenants that, until the Bond has been surrendered and canceled, it will maintain a system for
recording the ownership of each Bond that complies with the provisions of Section 149 of the Code.
The City and the Registrar may treat the person in whose name any Bond shall be registered as the
absolute owner of such Bond for all purposes, whether or not the Bond shall be overdue, and all
payments of principal of and interest on a Bond made to the Registered Owner thereof or upon its
order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent
of the sum or sums so paid, and neither the City nor the Registrar shall be affected by any notice to
the contrary.
Section 10. Transfer and Exchange. The Bond shall be transferred only upon the books for
the registration and transfer of the Bond kept at the office of the Registrar. Upon surrender for
transfer or exchange of the Bond at such office, with a written instrument of transfer or authorization
for exchange in form and with guaranty of signature satisfactory to the Registrar, duly executed by
CITY OF SEWARD, ALASKA
RESOLUTION 2016-052
the Registered Owner or the duly authorized attorney of the Registered Owner, the City shall execute
and deliver an equal aggregate principal amount of Bond of the same maturity of any authorized
denominations, subject to such reasonable regulations as the City may prescribe and upon payment
sufficient to reimburse it for any tax, fee or other governmental charge required to be paid in
connection with such transfer or exchange. The Bond surrendered for transfer or exchange shall be
canceled by the Registrar.
Section 11. Bond Mutilated, Destroyed, Stolen or Lost. Upon surrender to the Registrar of a
mutilated Bond, the City shall execute and deliver a new Bond of like maturity and principal amount.
Upon filing with the Registrar of evidence satisfactory to the City that a Bond has been destroyed,
stolen or lost and of the ownership thereof, and upon furnishing the City with indemnity satisfactory
to it, the City shall execute and deliver a new Bond of like maturity and principal amount. The
person requesting the execution and delivery of a new Bond under this section shall comply with
such other reasonable regulations as the City may prescribe and pay such expenses as the City may
incur in connection therewith.
Section 12. Designation of Refunded Bonds. The City Manager and the City Finance
Director each is authorized to designate which principal installments of the 2007 Bond are
authorized to be refunded in this Resolution shall be refunded, provided that the refunding of the
2007 Bond so designated shall realize an aggregate debt service savings, net of all issuance costs and
underwriting discount, on a present value basis.
Section 13. Parity Bond Covenants. The Bond is a Parity Bond referred to in Section 16 of
the 2000 Resolution. The City hereby covenants with the owners of the Bond, so long as the Bond
remains outstanding:
(A) Pursuant to Section 16(A)(1) of the 2000 Resolution, the City will pay into and
maintain in the Reserve Subaccount the amounts required by Section 13 of the 2000
Resolution to be paid into and maintained in such Subaccount.
(B) Pursuant to Section 16(A)(1) of the 2000 Resolution, the City will establish, maintain
and collect Passenger Fees and Net Revenues in each Fiscal Year that will provide
Pledged Revenues in an amount equal to the amount of the Annual Debt Service
Requirement for such year on all outstanding Parity Bonds.
(C) Pursuant to Section 16(A)(2) of the 2000 Resolution, unless otherwise exempt, from
the date the Bond is issued, the City shall have on file a certificate showing that the
"annual income available for revenue debt service" is at least equal to 1.20 times the
maximum Annual Debt Service Requirement on all outstanding Parity Bonds.
(D) Pursuant to Section 16(B) of the 2000 Resolution, issuance of the Bond does not
require a greater amount to be paid out of Pledged Revenues for principal and interest
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CITY OF SEWARD, ALASKA
RESOLUTION 2016-052
over the life of the Bond, and the other applicable, and required, provisions of Section 16
of the 2000 Resolution are complied with.
Section 14. Tax Covenants. The City covenants to comply with any and all applicable
requirements set forth in the Code in effect from time to time to the extent that such compliance shall
be necessary for the exclusion of the interest on the Bond from gross income for federal income tax
purposes. The City covenants that it will make no use of the proceeds of the Bond which will cause
the Bond or the Refunded Bonds to be "arbitrage bonds" subject to federal income taxation by reason
of section 148 of the Code. The City covenants that it will not take or permit any action that would
cause the Bond to be "private activity bonds" as defined in Section 141 of the Code.
Section 15. Amendatory and Supplemental Resolutions.
(A) The Council from time to time and at any time may adopt a resolution or resolutions
supplemental hereto, which resolution or resolutions thereafter shall become a part of this resolution,
for any one or more of the following purposes:
(1) To add to the covenants and agreements of the City in this Resolution, other
. covenants and agreements thereafter to be observed, or to surrender any right or power herein
reserved to or conferred upon the City.
(2) To make such provisions for the purpose of curing any ambiguities or of curing,
correcting or supplementing any defective provision contained in this Resolution or in regard to
matters or questions arising under this Resolution as the Council may deem necessary or desirable
and not inconsistent with this Resolution and which shall not adversely affect the interests of the
Registered Owners of the Bond.
Any such supplemental resolution may be adopted without the consent of the Registered
Owner of the Bond at any time outstanding, notwithstanding any of the provisions of subsection (B)
of this section.
(B) With the consent of the Registered Owners of not less than 60 percent in aggregate
principal amount of the Bond at the time outstanding, the Council may adopt a resolution or
resolutions supplemental hereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Resolution or of any supplemental resolution;
provided, however, that no such supplemental resolution shall:
(1) extend the fixed maturity of the Bond, or reduce the rate of interest thereon, or
extend the time of payments of interest from their due date, or reduce the amount of the principal
thereof, or reduce any premium payable on the redemption thereof, without the consent of the
Registered Owners of the Bond so affected; or
CITY OF SEWARD, ALASKA
RESOLUTION 2016-052
(2) reduce the aforesaid percentage of Registered Owners of the Bond required to
approve any such supplemental resolution without the consent of the Registered Owners of the Bond
then outstanding.
It shall not be necessary for the consent of the Registered Owners of the Bond under this
subsection to approve the particular form of any proposed supplemental resolution, but it shall be
sufficient if such consent approves the substance thereof.
(C) Upon the adoption of any supplemental resolution under this section, this Resolution
shall be deemed to be modified and amended in accordance therewith, and the respective rights,
duties and obligations under this Resolution of the City and all Registered Owners of the outstanding
Bond shall thereafter be subject in all respects to such modification and amendment, and all the
terms and conditions of the supplemental resolution shall be deemed to be part of the terms and
conditions of this Resolution for any and all purposes.
(D) Each Bond executed and delivered after the execution of any supplemental resolution
adopted under this section may bear a notation as to any matter provided for in such supplemental
resolution, and if such supplemental resolution shall so provide, a new Bond modified so as to
conform, in the opinion of the City, to any modification of this Resolution contained in any such
supplemental resolution may be prepared by the City and delivered without cost to the Registered
Owners of the Bond then outstanding, upon surrender for cancellation of such Bond in equal
aggregate principal amounts.
Section 15. Defeasance. In the event money and/or non -callable direct obligations of, or
obligations the timely payment of principal of and interest on which are unconditionally guaranteed
by, the United States of America or an agency or instrumentality of the United States of America,
maturing at such times and bearing interest to be earned thereon in amounts sufficient to redeem and
retire any or all of the Bond in accordance with its terms are set aside in a special trust account to
effect such redemption or retirement and such moneys and the principal of and interest on such
obligations are irrevocably set aside and pledged for such purpose, then no further payments need be
made to pay or secure the payment of the principal of and interest on such Bond and such Bond, or
portion thereof, shall be deemed not to be outstanding.
Section 16. Exchange of Bond; Amendatory Loan Agreement. The Bond shall be delivered to
the Bond Bank in exchange for the Refunded Bond. The City has been advised by the Bond Bank
that bond market conditions are fluctuating and that the most favorable market conditions for the sale
of the Bond Bank Bonds may not occur on the date of a regular Council meeting. The Council has
determined that it would be inconvenient to hold a special meeting on short notice to approve the
terms of the Bond. Therefore, the Council hereby determines that it is in the best interest of the City
to delegate the authority to approve the terms of the Bond as provided herein. Each of the City
Manager and the City Finance Director is hereby authorized to determine the aggregate principal
amount, principal installment amounts, interest rates, yields, dated date, principal and interest
CITY OF SEWARD, ALASKA
RESOLUTION 2016-052
payment dates, and redemption terms, if any, for the Bond, so that such terms of the Bond conform
to the terms of the corresponding Bond Bank Bonds; provided that the interest rate on each principal
installment of the Bond shall not exceed the interest rate on the corresponding maturity of the Bond
Bank Bonds. Based upon the foregoing determination, the City Manager and the City Finance
Director each is authorized to negotiate and execute an Amendatory Loan Agreement. The authority
granted to the City Manager and City Finance Director by this section shall expire 180 days after the
effective date of this Resolution. If the City Manager or City Finance Director has not executed an
Amendatory Loan Agreement within 180 days from the effective date of this Resolution, the
Amendatory Loan Agreement may not be executed on behalf of the City without further
authorization from the Council.
Section 17.Official Statement. The City Manager and City Finance Director are each hereby
authorized to approve the form of the preliminary and the final Official Statement for the Bond Bank
Bonds as each pertains to the City and the Bond.
Section 18. Authority of Officers. The Mayor, the City Manager, the City Finance Director,
and the City Clerk are, and each of them hereby is, authorized and directed to do and perform all
things and determine all matters not determined by this Resolution, to the end that the City may carry
out its obligations under the Bond and this Resolution.
Section 19. Miscellaneous. No recourse shall be had for the payment of the principal of or the
interest on the Bond or for any claim based thereon or on this Resolution against any member of the
Council or officer of the City or any person executing the Bond. The Bond is not and shall not be in
any way a debt or liability of the State of Alaska or of any political subdivision thereof, except the
City, and does not and shall not create or constitute an indebtedness or obligation, either legal, moral
or otherwise, of said state or of any political subdivision thereof, except the City.
Section 20. Continuing Disclosure. The City hereby covenants and agrees that it will execute
and carry out all of the provisions of a Continuing Disclosure Certificate in form and substance
satisfactory to the Bond Bank if execution and delivery of such Certificate is required by the Bond
Bank. Notwithstanding any other provision of this Resolution, failure of the City to comply with the
Continuing Disclosure Certificate shall not be considered a default of the City's obligations under
this Resolution or the Bond; however, the beneficial owner of any Bond or Bond Bank Bond may
bring an action for specific performance, to cause the City to comply with its obligations under this
section.
Section 21. Severability. If any one or more of the provisions of this Resolution shall be
declared by any court of competent jurisdiction to be contrary to law, then such provision shall be
null and void and shall be deemed separable from the remaining provisions of this Resolution and
shall in no way affect the validity of the other provisions of this Resolution or of the Bond.
CITY OF SEWARD, ALASKA
RESOLUTION 2016-052
Section 22. This resolution shall take effect thirty (30) days following adoption by the
Seward City Council.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 22°d
day of August, 2016.
THE CITY OF SEWARD, ALASKA
an Bardarson, Mayor
AYES:
Keil, Squires, Butts, McClure, Bardarson
NOES:
None
ABSENT:
Casagranda, Altermatt
ABSTAIN:
None
ATTEST:
Brenda J. Ballou C
Acting City Clq;Lsa••,,,,
of
• G,SE
?C,� �r�•. O
(City Sdal) o :s L
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1
Council Agenda Sty�tement
Meeting Date: August 22, 2016
To: City Council
Through: Jim Hunt, City Manager
From: Kristin Erchinger, Finance Director
Agenda Item: Refunding 2007 Harbor Revenue Bonds
BACKGROUND & JUSTIFICATION:
On November 27, 2006, the Seward City Council approved Resolution 2006-128 authorizing the issuance of $2,650,000 of
Harbor improvement revenue refunding bonds for the purpose of refunding Harbor bonds which were originally issued in
2000 for the purpose of constructing E-Float and fish cleaning stations. The original bonds were issued in the amount of
$3 Million as authorized by Resolution 2000-094. As of August 1, 2016, the remaining balance on these bonds is
$1,075,000.
Interest rates remain at historic low levels. A recent analysis by RBC Capital Markets on behalf of the Alaska Municipal
Bond Bank, determined that the outstanding harbor bond is a candidate for net present value savings of approximately
$74,447, net of all costs, over the life of this bond. This is equal to an annual savings of approximately $12,201.
Generally, the City looks favorably on a refunding when it can achieve a NPV savings of at least 3%; this analysis shows a
potential savings of approximately 6.9%. The intent is to issue new bonds for the same approximate maturity as the old
bonds, with a slight adjustment to synchronize the bond repayment schedule with the AMBBA.
INTENT:
To refund the Harbor Enterprise Fund Revenue Bonds in order to reduce lifetime borrowing costs of debt. The refunding
is not intended to extend maturities unless a minor extension is required to sync up the bond payment schedule with other
participants in the bond issuance.
CONSISTENCY CHECKLIST:
Yes
No
N/A
1.
Comprehensive Plan (2020 Comp Plan):
X
2.
Strategic Plan:
X
3.
Other: Resolution 2006-128; Resolution 2000-094
X
FISCAL NOTE:
This action is intended to result in a reduction in annual debt costs of approximately $12,201 (current annual debt costs are
approximately $246,000), for an estimated net present value savings of $74,447. The maximum requested amount of the
refunding is higher than the outstanding balance on the bonds, to account for the fact that the refunding escrow accounts
must pay interest through the call dates rather than just the outstanding principal amounts being refunded.
Approved by Finance Department: �G�✓^�%
ATTORNEY REVIEW: Yes X No
This information was prepared and reviewed by Cynthia Cartledge of Jermain, Dunnagan & Owens, serving as the City's
bond counsel on this refunding.
RECOMMENDATION:
Approve City Council Resolution 2016-05Z , authorizing the City of Seward to issue refunding revenue bonds in a principal
amount not to exceed $1,300,000, authorizing the execution of a loan agreement between the City of Seward and the Alaska
Municipal Bond Bank, authorizing the sale of such bonds, and providing for related matters.
Sponsored by: Janke
CITY OF SEWARD, ALASKA
RESOLUTION 2000-094
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, PROVIDING FOR THE ISSUANCE OF HARBOR
IMPROVEMENT REVENUE BONDS OF THE CITY IN THE AGGREGATE
PRINCIPAL AMOUNT OF NOT TO EXCEED $3,000,000 FOR THE
PURPOSE OF PROVIDING AMOUNTS TO ACQUIRE, CONSTRUCT AND
INSTALL NECESSARY ADDITIONS AND IMPROVEMENTS TO THE
CITY'S HARBOR SYSTEM AND TO DO ALL THINGS NECESSARILY
INCIDENTAL THERETO, AND TO PAY THE COSTS OF BOND
ISSUANCE; FIXING CERTAIN COVENANTS AND PROTECTIVE
PROVISIONS SAFEGUARDING THE PAYMENT OF THE PRINCIPAL OF
AND INTEREST ON SAID BONDS; PROVIDING THAT ADDITIONAL
HARBOR IMPROVEMENT REVENUE BONDS MAY BE ISSUED ON A
PARITY WITH SUCH BONDS UPON COMPLIANCE WITH CERTAIN
CONDITIONS; AND PROVIDING FOR THE DATE, FORM, TERMS,
MATURITIES AND MANNER OF SALE OF THE BONDS.
WHEREAS, the City of Seward, Alaska, (the "City") owns, operates and maintains a harbor
system which is in need of certain additions, improvements and extensions; and
WHEREAS, the Constitution and statutes of the State of Alaska and the Charter of the City
permit the City to issue revenue bonds to finance any project which serves a public purpose which
bonds are secured only by the revenues of the project and which do not constitute a debt or pledge
of the faith and credit or taxing power of the City and which may be authorized by the Council and
do not require ratification by the electors of the City; and
WHEREAS, it is necessary to establish the form, conditions, covenants and method of sale
of such bonds and to make provision for establishing the amount, maturities, interest rates and
redemption rights and other terms thereof;
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF
SEWARD, ALASKA:
Section 1. Pu ose. The purpose of this resolution is to authorize the issuance and sale
of not to exceed $3,000,000 of harbor improvement revenue bonds, to fix the form, covenants and
method of sale of said bonds, to provide for establishing the amount, maturities, interest rates,
redemption rights and other terms of said bonds and to fix the conditions under which additional
harbor improvement revenue bonds may be issued on a parity with the said bonds.
�%Patkcleckc\CU ent Work%COUNCILacsolutions%00-094a.wpd Page 1
Section 2. Definitions. As used in this resolution, unless a different meaning clearly
appears from the context:
"Acquired Obligations" means and includes any ofthe following securities, if and to the extent
the same are at the time legal for investment of funds of the City: any noncallable bonds or other
noncallable obligations which as to principal and interest constitute direct obligations of, or are
unconditionally guaranteed by, the United States of America, including obligations of any federal
agency or corporation which has been or may hereafter be created pursuant to an act of Congress as
an agency or instrumentality of the United States of America to the extent unconditionally guaranteed
by the United States of America.
"Annual Debt Service Requirement" means, with respect to any particular Fiscal Year and to
any specified bonds, an amount equal to (i) interest accruing during such Fiscal Year on such bonds,
except to the extent such interest is to be paid from deposits in the Debt Service Subaccount from
bond proceeds, (ii) the principal amount of such bonds due during such Fiscal Year for which no
sinking fund installments have been established, plus (iii) the unsatisfied balance of any sinking fund
installment for such bonds due during such Fiscal Year.
"Arbitrage and Tax Certificate" means the certificate executed and delivered by the City at
the time of issuance and delivery of the Bonds setting forth the City's expectations as to the use of
Bond proceeds.
"Bond Account" means the Harbor Improvement Revenue Bond Account created by
Section 12 hereof.
"Bond Register" means the registration books maintained by the Registrar containing the
names and addresses of the owners of the Bonds.
"Bonds" means the City of Seward, Alaska, Harbor Improvement Revenue Bonds, 2000.
"Bond Year" has the meaning given such term in the Arbitrage and Tax Certificate.
"Charter" means the Home Rule Charter of the City, as the same may be amended from time
to time.
"City" means the City of Seward, Alaska, a municipal corporation organized and existing
under the Charter and Constitution and laws of the State of Alaska.
"Code" means the Internal Revenue Code of 1986, as amended, and all applicable regulations
thereunder.
"Consulting Engineer" means an independent consulting engineer or engineering firm licensed
to practice in the State of Alaska, retained and appointed pursuant to Section 15(F).
1\Pat\c1etkc\Current Work\CQUNCIL\Re o1uiomW0-094&wpd Page 2
"Council" means the general legislative authority of the City, as the same may be constituted
from time to time.
"Debt Service Subaccount" means the Debt Service Subaccount created in the Bond Account
by Section 12 hereof.
"Fiscal Year" means the 12-month period commencing on January 1 each year through and
including December 31 of that year.
"Future Parity Bonds" means any harbor improvement revenue bonds, notes or other
obligations of the City, other than the Bonds, issued under a resolution wherein the City pledges that
the payments to be made out of the Pledged Revenues into the Bond Account and Reserve
Subaccount therein to pay and secure the payment of the principal of and interest on such revenue
bonds, notes or other obligations will be on a parity with the payments required by this resolution to
be made out of such Pledged Revenues into such Bond Account and Reserve Subaccount to pay and
secure the payment of the principal of and interest on the Bonds.
"Government Obligations" means any of the following: (i) any bonds or other obligations
which, as to principal and interest, constitute direct obligations of, or are unconditionally guaranteed
by, the United States of America; (ii) bonds, debentures, or other evidences of indebtedness issued
or guaranteed by any agency or corporation which has been or may hereafter be created pursuant to
an act of Congress as an agency or instrumentality of the United States of America; (iii) bonds,
debentures, or other evidences of indebtedness issued or guaranteed by any agency or corporation
which has been or may hereafter be created pursuant to an act of Congress as an agency or
instrumentality of the United States of America; (iv) obligations of financial institutions insured by
the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation,
to the extent insured; and (v) bank certificates of deposit fully secured by obligations described in (i)
and (ii) hereof.
"Loan Agreement" means the Loan Agreement between the City and the Alaska Municipal
Bond Bank Authority, dated as of the date of the Bonds.
"Net Revenues" means, for any Fiscal Year or other period of time, all amounts received by
the City and deposited in the Small Boat Harbor Enterprise Fund and interest and profits derived from
the investment of moneys held in the Small Boat Harbor Enterprise Fund during such period less
Operating Expenses for such period.
"Operating Expenses" means, for any Fiscal Year or other period of time, the expenses
incurred for operation, maintenance or repair of the Small Boat Harbor of a non -capital nature.
Operating Expenses shall not include any allowances for depreciation or amortization or any principal,
redemption price or purchase price of, or interest on, any obligations of the City incurred in
connection with and payable from Pledged Revenues or any fee or charge in lieu of City taxes.
"Parity Bonds" means the Bonds and any Future Parity Bonds.
\\PaNdeckc\Cw t Wo:k\COUNCILacsolutions\00.094a.wpd Page 3
"Passenger Fees" means all passenger fees imposed by the City with respect to embarking or
debarking a vessel at any City Dock, as described in the Port and Harbor Tariff of the City.
"Pledged Revenues" means Net Revenues and Passenger Fees and interest received and
profits derived from the investment of moneys obtained from moneys held in any fund solely to pay
or secure the payment of any Bonds issued under this resolution.
"Registered Owner" means the person named as the registered owner of a Bond in the Bond
Register.
"Registrar" means the Finance Director ofthe City, or any successor that the Finance Director
may appoint.
"Reserve Subaccount" means the Reserve Subaccount created in the Bond Account by
Section 12 hereof.
"Reserve Subaccount Requirement" means an amount equal to the least of (i) 10% of the
proceeds of sale of the Parity Bonds, (ii) 125% of the average Annual Debt Service Requirement for
all Parity Bonds, and (iii) the maximum Annual Debt Service Requirement on all outstanding Parity
Bonds.
"System" means the "E" Float, two fish cleaning stations and other capital improvements in
the City's Small Boat Harbor as the same may be acquired, constructed, added to, improved, replaced
or extended for as long as any Parity Bonds are outstanding.
Section 3. Authorization of Bonds and Purpose of Issuance. The City shall issue and sell
an issue of revenue bonds designated "City of Seward, Alaska Harbor Improvement Revenue Bonds,
2000" (the "Bonds") in the aggregate principal amount of not to exceed $3,000,000. The proceeds
of the Bonds shall be used to pay the costs of certain additions, betterments and extensions of the
System consisting principally of reconstruction and installation of a portion of the Small Boat Harbor
known as the "Err Float, fish cleaning stations in the Small Boat Harbor and other capital projects
within the Small Boat Harbor. These projects serve a public purpose of the City.
Section 4. Date Maturities Interest Rates and Other Details of the Bonds. The Bonds
shall be dated and mature on such dates not later than 2025, and shall bear interest from their date
payable on such dates, and at such rates, not exceeding 7% per annum, as the Council or the City
Manager or Finance Director may fix and determine at or prior to the time of sale of the Bonds.
The Bonds shall be fully registered as to both principal and interest, shall be in the
denomination of $5,000 each, or any integral multiple thereof, and shall be numbered separately in
such manner and with any additional designation as the Registrar deems necessary for purposes of
identification.
Section 5. Place and Medium of Payment. Both principal of and interest on the Bonds
shall be payable in lawful money of the United States of America. For so long as all outstanding
%\Patdeft\Current Wor]dCOLNCIL%Resoluiiors100-094a.wpd Page 4
Bonds are registered in the name of the Alaska Municipal Bond Bank Authority, payments of
principal and interest thereon shall be made as provided in the Loan Agreement. In the event that the
Bonds are no longer registered in the name of the Alaska Municipal Bond Bank Authority, interest
on the Bonds shall be paid by check mailed (or by wire transfer to a Registered Owner of Bonds in
aggregate principal amount of $1,000,000 or more who so requests) to the Registered Owners of the
Bonds at the addresses for such Registered Owners appearing on the Bond Register on the 15th day
of the month preceding the interest payment date. Principal of the Bonds shall be payable upon
presentation and surrender of the Bonds by the Registered Owners at the principal office of the
Registrar.
Section 6. Registration.
A. Bond Register. The Bonds shall be issued only in registered form as to both principal
and interest. The Registrar shall keep, or cause to be kept, a bond register.
B. Registered Ownership. The City and the Registrar, each in its discretion, may deem
and treat the Registered Owner of each Bond as the absolute owner thereof for all purposes, and
neither the City nor the Registrar shall be affected by any notice to the contrary. Payment of any such
Bond shall be made only as described in Section 5 hereof, but such registration may be transferred
as herein provided. All such payments made as described in Section 5 shall be valid and shall satisfy
and discharge the liability of the City upon such Bond to the extent of the amount or amounts so paid.
C. Transfer or Exchange. Bonds shall be transferred only upon the Bond Register kept
by the Registrar. Upon surrender for transfer or exchange of any Bond at the office of the Registrar,
with a written instrument of transfer or authorization for exchange in form and with guaranty of
signature satisfactory to the Registrar, duly executed by the registered owner or its duly authorized
attorney, the City shall execute and the Registrar shall deliver an equal aggregate principal amount
of Bonds of the same maturity of any authorized denominations, subject to such reasonable
regulations as the Registrar may prescribe and upon payment sufficient to reimburse it for any tax,
fee or other governmental charge required to be paid in connection with such transfer or exchange.
All Bonds surrendered for transfer or exchange shall be cancelled by the Registrar. The Registrar
shall not be required to transfer or exchange Bonds subject to redemption during the 15 days
preceding any principal or interest payment date or the date of mailing of notice of redemption of
such Bonds, or any Bond after such Bond has been called for redemption.
D. Registration Covenant. The City covenants that, until all Bonds have been
surrendered and cancelled, it will maintain a system for recording the ownership of each Bond that
complies with the provisions of Section 149 of the Code.
Section 7. Redemption. The Bonds may be redeemed at the times not later than ten years
from their dates, for the redemption prices not exceeding 105% of the principal amount, and in such
manner, as the Council or City Manager or Finance Director may fix and determine at or prior to the
time of sale of the Bonds.
1\Pat\clerkc\Current Work\COUNCIL1Resolutions\oo-o94a.wpd Page 5
Notice of any intended redemption of Bonds shall be given not less than 45 nor more than 60
days prior to the date fixed for redemption by United States mail to registered owners of the Bonds
to be redeemed at their addresses as they appear on the Bond Register on the day the notice is mailed;
provided, however, that for so long as the Bonds are registered in the name of the Alaska Municipal
Bond Bank Authority, all notices shall be given only as provided in the Loan Agreement. The
requirements of this section shall be deemed to be complied with when notice is mailed as herein
provided, whether or not it is actually received by the Registered Owner.
All official notices of redemption shall be dated and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if fewer than all outstanding Bonds are to be redeemed, the identification (and,
in the case of partial redemption, the respective principal amounts) of the Bonds to be
redeemed;
(d) that: on the redemption date the redemption price will become due and payable
upon each such bond or portion thereof called for redemption, and that interest thereon shall
cease to accrue from and after said date; and
(e) the place where such Bonds are to be surrendered for payment of the redemption
price, which place of payment shall be the principal office of the Registrar.
Notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be
redeemed shall, on the redemption date, become due and payable at the redemption price therein
specified, and from and after such date (unless the City shall default in the payment of the redemption
price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds
for redemption in accordance with said notice, such Bonds shall be paid by the Registrar at the
redemption price. Installments of interest due on or prior to the redemption date shall be payable as
herein provided for payment of interest. Upon surrender for any partial redemption of any Bond,
there shall be prepared for the Registered Owner a new Bond or Bonds of the same maturity in the
amount of the unpaid principal. All Bonds which have been redeemed shall be cancelled and
destroyed by the Registrar and shall not be reissued.
If any Bond shall be duly presented for payment and funds have not been duly provided by
the City on such applicable date, then interest shall continue to accrue thereafter on the unpaid
principal thereof at the rate stated on such Bond until it is paid.
Im
Section 8. Form of Bonds. The form of the Bonds shall be substantially as follows:
UNITED STATES OF AMERICA
CITY OF SEWARD, ALASKA
HARBOR IMPROVEMENT REVENUE BOND, 2000
\Tahclerkc%Current WorklCOLNCILamlutions\00-094a.wpd Page 6
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The City of Seward, Alaska (the "City), a municipal corporation ofthe State ofAlaska, hereby
acknowledges itself to owe and for value received promises to pay to the Registered Owner identified
above, or its registered assigns, from the sources stated herein, the Principal Amount indicated above
in the following installments on of each of the following years, and to pay, from the
sources stated herein, interest on such installments from the date hereof, payable on
20_ and semiannually thereafter on the first days of each and
of each year, at the rates per annum as follows:
Maturity Principal Interest
Date Amount Rate
For so long as this Bond is owned by the Alaska Municipal Bond Bank Authority (the "Authority),
payment of principal and interest shall be made as provided in the Loan Agreement between the
Authority and the City. In the event that this Bond is no longer owned by the Authority, payment
of principal of and interest on this Bond will be made by check or draft mailed by first class mail to
the registered owner at the address appearing on the bond register of the City, provided that the final
installment of principal and interest on this Bond will be payable at the office of the City Finance
Director (the "Registrar") upon surrender of this Bond. Interest shall be computed on the basis of
a 360-day year composed of twelve 30-day months. Both principal of and interest on this bond are
payable in lawful money of the United States of America solely out of the special fund of the City
known as the "Harbor Improvement Revenue Bond Account" created by Section 12 of Resolution
No. 2000-
This bond is one of an issue of bonds (the "Bonds") of like date and tenor except as to
number, rate of interest, and date of maturity, aggregating the principal sum of $ and
is issued pursuant to the Constitution and statutes of the State of Alaska and the Charter and duly
adopted resolutions and ordinances of the City, including Resolution No. 2000- (the "Bond
Resolution"). The definitions contained in the Bond Resolution shall apply to capitalized terms
contained herein. The Bonds are being issued for the purpose of undertaking certain capital
improvements to the City's Small Boat Harbor.
Bonds maturing on or after _ , 20___ , may be called for redemption at the
option of the City on any date on and after in whole on any date, or in part in
increments of $5,000 with maturities to be selected by the City and by lot within a maturity, at a price
of par plus accrued interest to the date of redemption.
\1Pst%v1erkc\Current Work1COUNCILamlutionsWO-W4a.wpd Page 7
Notice of any such intended redemption shall be given as provided in the Loan Agreement.
From and after the date fixed for redemption, interest on any Bonds so called for redemption shall
cease to accrue, provided funds for such redemption are on deposit in the Bond Account.
The City does hereby pledge and bind itself to set aside out of Pledged Revenues of the City
and to pay into the Bond Account the various amounts required by the Bond Resolution to be paid
into and maintained in said Account all within the times provided in the Bond Resolution.
The pledge of Pledged Revenues contained herein and in the Bond Resolution may be
discharged by making provision, at any time, for the payment of the principal of and interest on this
Bond in the manner provided in the Bond Resolution.
The pledge of amounts to be paid into the Bond Account is hereby declared to be a lien and
charge upon the Pledged Revenues superior to all other charges of any kind or nature and equal in
rank to the lien and charge thereon for amounts pledged to the payment of any Future Parity Bonds
hereafter issued.
The City has further bound itself to maintain the System in good condition and repair, to
operate the same in an efficient manner and at a reasonable cost, and to establish, maintain and collect
Passenger Fees for as long as any Parity Bonds are outstanding that will provide Pledged Revenues
in an amount equal to at least the amount of the Annual Debt Service Requirement for such year on
all outstanding Parity Bonds.
It is hereby certified that all acts, conditions and things required by the Constitution and
statutes of the State of Alaska and the Charter and resolutions of the City to be done precedent to
and in the issuance of this bond have happened, been done and performed.
IN WITNESS WHEREOF, the City of Seward, Alaska, has caused this bond to be executed
with the manual or facsimile signature of its Mayor and to be countersigned with the manual or
facsimile signature of its Clerk and the official seal of the City to be impressed or imprinted hereon,
as of this day of , 2000.
CITY OF SEWARD, ALASKA
Mayor
COUNTERSIGNED:
City Clerk
\Tat\clerWCuurent WoddCOUNCIL\Resolutions\00-094a.wpd Page 8
1
(Form of Assignment)
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(Please insert Social Security or taxpayer identification number of transferee)
(Please print or typewrite name and address, including zip code of Transferee)
the within bond and does hereby irrevocably constitute and appoint of
, or its successor, as Registrar, to transfer said bond on the books
kept for registration thereof with full power of substitution in the premises.
DATED:
NOTE: The signature on this Assignment must
correspond with the name of the registered owner as
it appears upon the face of the within bond in every
particular, without alteration or enlargement or any
change whatever.
SIGNATURE GUARANTEED:
Section 9. Execution of Bonds. The Bonds shall be executed on behalf of the City with
the manual or facsimile signature of the Mayor of the City, countersigned with the manual or facsimile
signature of the Clerk. The official seal of the City shall be impressed or imprinted on each Bond.
The execution of a Bond on behalf of the City by persons that at the time of the execution are duly
authorized to hold the proper offices shall be valid and sufficient for all purposes, although any such
person shall have ceased to hold office at the time of issuance and delivery of the Bond or shall not
have held office on the date of the Bond.
Section 10. Mutilated Destroyed, Stolen or Lost Bonds. Upon surrender to the Registrar
of a mutilated Bond, the City shall execute and deliver a new Bond of like maturity and principal
amount. Upon filing with the Registrar of evidence satisfactory to the City that a Bond has been
destroyed, stolen or lost and of the ownership thereof, and upon furnishing the City with indemnity
satisfactory to it, the City shall execute and deliver a new Bond of like maturity and principal amount.
1\Pat1clerkclCurrent Work\COUNCIL%Resolutioms 00-094a.wpd Page 9
The person requesting the authentication and delivery of a new Bond pursuant to this section shall
comply with such other reasonable regulations as the City may prescribe and pay such expenses as
the City may incur in connection therewith. Any Bonds issued pursuant to this section in substitution
for Bonds alleged to be destroyed, stolen or lost shall constitute original additional contractual
obligations on the part of the City, whether or not the Bonds alleged to be destroyed, stolen or lost
be at any time enforceable by anyone, and shall be equally and proportionately secured with all other
Bonds issued hereunder.
Section 11. Priority of Use of Pledged Revenues. Pledged Revenues are hereby pledged
to and shall be used only for the following purposes and in the following order of priority:
First, to make all payments, including sinking fund payments, required to be made into the
Debt Service Subaccount for the payment of the principal of and interest on Parity Bonds;
Second, to make all payments required to be made into the Reserve Subaccount;
Third, to make all payments, including sinking fund payments, required to be made into a
subordinate lien debt service account for the payment of the principal of and interest on any
subordinate lien bonds;
bonds;
Fourth, to make all payments required to be made into a reserve account for subordinate lien
Fifth, to make all required payments of charges or fees in lieu of City taxes; and
Sixth, to pay the costs of additions, betterments, improvements and repairs to and extensions
and replacements of the City Small Boat Harbor to purchase or redeem harbor improvement revenue
bonds or notes of the City, or for any other proper purpose in connection with the operation of the
City Small Boat Harbor.
Section 12. Harbor Improvement Revenue Bond Account and Subaccounts Therein. There
is hereby created a special fund of the City known as the "Harbor Improvement Revenue Bond
Account" (the "Bond Account"), which fund is a trust fund to be drawn upon for the sole purpose
of paying the principal of and interest and premium, if any, on all Parity Bonds. The Bond Account
consists of two subaccounts, the Debt Service Subaccount and the Reserve Subaccount. Amounts
pledged to be paid into the Bond Account are hereby declared to be a lien and charge upon Pledged
Revenues superior to all other charges of any kind or nature and equal in rank to the charge thereon
to pay and secure the payment of the principal of and interest on all Parity Bonds.
From and after the time of issuance and delivery of the Bonds and as long thereafter as any
of the same remain outstanding, the City hereby irrevocably obligates and binds itself to set aside and
pay into the Debt Service Subaccount out of Pledged Revenues or out of any other moneys legally
available therefor on or before the 20' day of each month the following:
APflfdffk \Cunmt WorkICOUNCIL\Resolmioms DO-094a.wpd Page 10
A. Such amounts, in approximately equal monthly installments, as will be sufficient to
accumulate the amount required to pay the interest scheduled to become due on Parity Bonds on the
next interest payment date; and
B. Such amounts, in approximately equal monthly installments, as will be sufficient to
accumulate (i) the principal amount of all Parity Bonds due for which no sinking fund installments
have been established, plus (ii) the unsatisfied balance of any sinking fund installment for Parity
Bonds, in each case during the next 12 months.
Moneys in the Debt Service Subaccount may be held in cash or invested in Government
Obligations which investments mature prior to the time such money is required for the payment of
the principal of or interest on the Parity Bonds. All interest earned on and profits derived from such
investments shall remain in and become a part of the Debt Service Subaccount.
Section 13. Reserve Subaccount. The City hereby covenants and agrees that it will at the
time of issuance of the Bonds cause amounts to be paid into the Reserve Subaccount such that the
total amount in the Reserve Subaccount will be equal to the Reserve Subaccount Requirement.
The City further covenants and agrees that it will set aside and pay into the Reserve
Subaccount amounts from Pledged Revenues, commencing with the first month following the closing
and delivery of the Bonds, so that the amount on deposit in the Reserve Subaccount will at all times
be at least equal to the Reserve Subaccount Requirement,
The City further covenants and agrees that in the event it issues any Future Parity Bonds
hereafter it will provide in each resolution authorizing the same that at the time of issuance of such
Future Parity Bonds payments will be made into the Reserve Subaccount such that the total amount
of such payments together with the money already in the Reserve Subaccount will be equal to the
Reserve Subaccount Requirement.
The City further covenants and agrees that it will at all times maintain therein an amount at
least equal to the Reserve Subaccount Requirement until there is a sufficient amount in the Bond
Account and Reserve Subaccount to pay the principal of, premium, if any, and interest on all
outstanding Parity Bonds, at which time the money in the Reserve Subaccount may be used to pay
such principal, premium, if any, and interest; provided, however, that moneys in the Reserve
Subaccount may be withdrawn, or set aside in a special account in the Bond Account pursuant to
Section 19 of this resolution, to pay (with or without other available funds) the principal, premium,
if any, and interest on all of the outstanding Parity Bonds of any single issue or series payable out of
the Bond Account, so long as the moneys remaining on deposit in the Reserve Subaccount are at least
equal to the Reserve Subaccount Requirement on all of the remaining outstanding Parity Bonds. The
City may, from time to time, transfer from the Reserve Subaccount to the Debt Service Subaccount
amounts in excess of the Reserve Subaccount Requirement.
In the event there shall be a deficiency in the Debt Service Subaccount for meeting maturing
installments of either principal of or interest on Parity Bonds, such deficiency shall be made up from
the Reserve Subaccount by the withdrawal of cash therefrom. Any deficiency created in the Reserve
\Taftlerke\Current Work%COUNC[L\Resolutions\00-094a.wpd Page 11
Subaccount by reason of any such withdrawal shall then be made up from Pledged Revenues first
available therefor after making necessary provision for the required payments into the Debt Service
Subaccount. Investments in the Reserve Subaccount shall be valued at amortized cost except that
in the event of a deficiency in the Reserve Subaccount caused by the withdrawal or transfer of moneys
therefrom the amount of such deficiency shall be determined by valuing all investments in the Reserve
Subaccount at the then market value.
All money in the Reserve Subaccount may be kept in cash or invested in Government
Obligations. Such investments shall mature not later than the last maturity of Parity Bonds
outstanding at the time oftheir purchase. Interest on any such investments and/or any profits realized
from the sale thereof shall be deposited in and become a part of the Debt Service Subaccount.
Section 14. Investment of Certain Accounts. Moneys held in the Bond Account and in the
Reserve Subaccount shall be invested and reinvested to the fullest extent practicable in Government
Obligations which mature not later than at such times as shall be necessary to provide moneys when
needed for payments to be made from such Accounts, and in the case of the Reserve Subaccount not
later than fifteen years from the date of such investment.
Nothing in this resolution shall prevent any Government Obligations from being issued or held
in book -entry form on the books of the Department of the Treasury of the United States.
Obligations purchased as an investment of moneys in any Account or Subaccount created
under this resolution shall be deemed at all times to be a part of such Account or Subaccount and any
profit realized from the liquidation of such investment shall be credited to such Account or
Subaccount and any loss resulting from the liquidation of such investment shall be charged to the
respective Account or Subaccount.
In computing the amount in any Account or Subaccount created under this resolution for any
purpose provided in this resolution, obligations purchased as an investment of moneys therein shall
be valued at cost plus interest accrued and unpaid at the date of computation.
Section 15. Specific Covenants. The City hereby covenants with the owners of each of the
Parity Bonds for so long as any of the same remain outstanding as follows:
A. The City will establish, maintain and collect Passenger Fees and Net Revenues in each
Fiscal Year that will provide Pledged Revenues in an amount equal to the amount ofthe Annual Debt
Service Requirement for such year on all outstanding Parity Bonds.
B. The City will at all times maintain, preserve and keep the System and every part and
parcel thereof in good repair, working order and condition; will from time to time make or cause to
be made all necessary and proper repairs, renewals and replacements thereto so that the business
carried on in connection therewith may be properly and advantageously conducted; and will at all
times operate the System in an efficient manner and at a reasonable cost.
\T&tk1e&%Current WorMCOUNCILMesoluions\00-094a.wpd Page 12
C. The City will at all times carry all-risk insurance and such other forms of insurance on
such ofthe buildings, equipment, property and facilities ofthe System as are ordinarily insured in such
amounts and with such deductibles as under good business practice are ordinarily carried on such
buildings, equipment, property and facilities but such insurance shall in all events be in an amount at
least equal to the lessor of (i) 80% of the estimated replacement cost of the insurable parts of the
System or (ii) the aggregate principal amount of the Parity Bonds then outstanding, in each case such
all-risk insurance shall include, but not be limited to, hazards such as fire, water, lightning, tornado,
windstorm, hail, explosion, riot, civil commotion, vandalism and malicious mischief, aircraft and
vehicles, excluding flood, tidal wave, wavewash, subsidence, or earthquake insurance. In addition
to the above insurance, the City shall also carry public liability insurance and such other types of
insurance as are usually carried by municipal corporations operating like properties. All such
insurance shall be carried with responsible insurers and the policies shall be payable to the City.
D. The City will keep and maintain proper books and accounts with respect to the
operation of the System in such manner as prescribed by any authorities having jurisdiction over the
System; will cause its books and accounts to be audited annually be a certified public accountant not
later than 180 days following the end of each Fiscal Year, copies of which audits shall, upon request,
be furnished to the owners of the Parity Bonds. Said audit shall show whether or not the City has
in all respects performed and complied with the covenants set forth in this resolution, including the
payments into the Debt Service Subaccount and Reserve Subaccount provided for herein.
E. All employees and agents of the City collecting or handling money of the City in
■ connection with the management and operation of the System shall be bonded in an amount
commensurate with the funds they handle and in an amount sufficient to protect the City from loss.
F. The City will not sell or otherwise dispose of the System unless contemporaneously
with such sale or disposal there shall be paid from the Bond Account a sum sufficient to pay the
principal of and interest on all Parity Bonds then outstanding to the date or dates on which they first
may be redeemed, nor will it sell or otherwise dispose of any part of the System which is material to
the production of Pledged Revenues unless, in the opinion of the Consulting Engineer, the remaining
System will generate Pledged Revenues sufficient to enable the City to comply with the requirements
of this resolution and each resolution authorizing the issuance of Future Parity Bonds.
G. The City will not at any time create or permit to accrue or exist any lien or other
encumbrance or indebtedness upon the System or the Pledged Revenues, or any part thereof, or upon
any Account or Subaccount created hereunder, prior or superior to the lien thereon for the payment
of the Parity Bonds, and will pay and discharge, or cause to be paid and discharged, any and all lawful
claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the
Pledged Revenue, or any part thereof, or upon any Account or Subaccount in the hands of the City,
prior or superior to the lien of the Parity Bonds, or which might impair the security of the Parity
Bonds.
H. The City will not expend any of the Pledged Revenues or the proceeds of any
indebtedness payable from Pledged Revenues for any additions, betterments or improvements to the
APahclerkclCurrent Work\COUNCILVRe lufiolts\0O.094a.wpd Page 13
System which are not economically sound and which will not properly and advantageously contribute
to the conduct of the business of the System in an efficient and economical manner.
I. At any and all times the City shall, as far as it may be authorized by law, make, do,
execute, acknowledge, and deliver all further resolutions, acts, deeds, conveyances, assignments,
transfers, and assurances as may be necessary or desirable for better assuring, conveying, granting,
pledging, assigning, and confirming all and singular the rights, revenues, and other funds, moneys,
and securities pledged or assigned under the resolution, or intended so to be, or which the City may
become bound to pledge or assign.
I The City is duly authorized under all applicable laws to create and issue the Bonds and
to adopt this resolution and to pledge the Pledged Revenues and other funds, moneys, and securities
purported to be pledged by this resolution in the manner and to the extent provided in this resolution.
The Pledged Revenues and other funds, moneys, and securities so pledged are and will be free and
clear of any pledge, lien, charge, or encumbrance thereon or with respect thereto prior to, or of equal
rank with, the pledge and assignment created by this resolution, and all corporate or other action on
the part of the City to that end has been and will be duly and validly taken. The Bonds and the
provisions of this resolution are and will be the valid and legally enforceable obligations of the City
in accordance with their terms and the terms of this resolution. The City shall at all times, to the
extent permitted by law, defend, preserve, and protect the pledge of the Pledged Revenues and the
other funds, moneys, and securities pledged under this resolution and all the rights of the Bondholders
under this resolution against all claims and demands of all persons whomsoever.
K. The City has, and will have so long as any Parity Bonds are outstanding, good right,
and lawful power to operate, maintain, and repair the System and to fix and collect rates, fees, and
other charges related to the System.
L. The City shall do and perform or cause to be done and performed all acts and things
required to be done or performed by or on behalf of the City under the laws of the State of Alaska
and this resolution.
Section 16. Pgft Bonds. In all events the City may issue Parity Bonds up to $300,000 in
principal amount to complete the original construction of the System. The City hereby covenants
with the owners of each of the Parity Bonds for so long as the same remain outstanding that it will
not issue any bonds having a greater or equal lien on Pledged Revenues to pay and secure the
payment of the principal of and interest on such bonds than the lien created thereon to pay and secure
the payment ofthe principal of and interest on the Parity Bonds except that the City reserves the right
to issue future Parity Bonds as follows:
A. For the purpose of acquiring, constructing and installing additions, betterments and
improvements to and extensions of, acquiring necessary property and equipment for, or making
necessary replacements or repairs to the System, for funding interest and reserves and for the purpose
of refunding at or prior to their redemption or maturity any outstanding revenue bonds or notes of
the City that have a lien on Pledged Revenues for the payment of the principal thereof and interest
\\Paticlarke\Current Work\COUNCIL\Rasolunons\00-I194a.wpd Page 14
thereon junior and inferior to the lien on Pledged Revenues for the payment of the principal of and
interest on the Bonds and upon compliance with the following conditions:
(1) The City will covenant in each resolution authorizing the issuance of Future Parity
Bonds that it will pay into and maintain in the Reserve Subaccount the amounts required by
Section 13 of this resolution to be paid into and maintained in said Subaccount in the event
Future Parity Bonds are issued. The City also will covenant in each such resolution that it
will establish, maintain and collect Passenger Fees sufficient to meet the same requirements
as are contained in subsection A of Section 15 of this resolution;
(2) At the time of the issuance of such Future Parity Bonds the City shall have on file
a certificate showing that the "annual income available for revenue bond debt service," as
hereinafter set forth, shall be at least equal to 1.20 times the maximum Annual Debt Service
Requirement on all outstanding Parity Bonds and the Future Parity Bonds being issued.
Such "annual income available for revenue bond debt service" shall be determined by
adding the following:
(i) The historical Pledged Revenues for any 12 consecutive months out of
the 24 months immediately preceding the month of delivery of the Future Parity
Bonds being issued.
(ii) The estimated annual Pledged Revenues to be derived from the
operation of any additions or improvements to or extensions of the System under
construction but not completed at the time of such certificate and not being paid for
out of the proceeds of sale of such Future Parity Bonds being issued, and which
Pledged Revenues are not otherwise included in any of the sources of Pledged
Revenues described in this subsection (2).
(iii) The estimated Pledged Revenues to be derived from the operation of any
additions and improvements to or extensions of the System being paid for out of the
proceeds of sale of such Future Parity Bonds being issued.
The computation of "annual income available for revenue bond debt service" shall be
adjusted to reflect the Passenger Fees effective on the date of such certificate or approved by
the regulatory authority with jurisdiction to become effective thereafter if there has been any
change in such rates and charges put into effect or so approved during or after such 12-
consecutive-month base period.
Notwithstanding the preceding provisions of this subparagraph (2), the certificate
referred to above shall not be required if one-half of Pledged Revenues, verified from certain
financial statements of the City, for a period of any consecutive two out of the three Fiscal
Years immediately preceding the issuance and delivery of such Future Parity Bonds, was
equal to at least 1.20 times the maximum Annual Debt Service required to be paid in any
\\Pat\dMkc%Cuf=t WoTMCOUNCL\Resolutions\00-094a.wpd Page 15
Fiscal Year succeeding the date of issuance of such Future Parity Bonds on all outstanding
Parity Bonds and the Future Parity Bonds being issued.
Further, notwithstanding the preceding provisions of this subparagraph (2), Future
Parity Bonds may be issued if the City shall have on file a certificate stating that the Pledged
Revenues for the next full Fiscal Year after the initial operation of any additions or
improvements to or extensions ofthe System being paid for out of the proceeds ofthe Future
Parity Bonds will be at least equal to 1.40 times the maximum Annual Debt Service
Requirement on all outstanding Parity Bonds and the Future Parity Bonds being issued. That
at the time of the issuance of such Future Parity Bonds there is not deficiency in the Debt
Service Subaccount or Reserve Subaccount.
B. For the purpose of refunding at or prior to their redemption or maturity any part or
all of the then outstanding Parity Bonds if the issuance of such refunding Future Parity Bonds does
not require a greater amount to be paid out of Pledged Revenues for principal and interest over the
life of such refunding Future Parity Bonds being refunded, and if the conditions required in
subsections (a)(1) and (a)(3) of this section are complied with.
Proceeds of Parity Bonds to be used to fund interest or reserves shall be deposited in the Debt
Service Subaccount or the Reserve Subaccount, as the case may be.
Section 17. Subordinate Lien Bonds. Nothing contained herein shall prevent the City from
issuing revenue bonds or notes which are a charge upon Pledged Revenues subordinate or inferior
to the payments required herein to be made therefrom into the Debt Service Subaccount and Reserve
Subaccount, or from issuing harbor improvement revenue bonds to refund maturing bonds for the
payment of which moneys are not otherwise available.
Section 18. Covenants Regarding Arbitrage and Private Activity Bonds, The City hereby
covenants that it will not make any use of the proceeds of sale of the Bonds or any other funds of the
City which may be deemed to be proceeds of such Bonds pursuant to Section 148 of the Code which
will cause the Bonds to be "arbitrage bonds" within the meaning of said section and the regulations
applicable thereunder. The City will comply with the requirements of Section 148 of the Code (or
any successor provision thereof applicable to the Bonds) and the applicable regulations thereunder
throughout the term of the Bonds.
The City further covenants that it will not take any action or permit any action to be taken that
would cause the Bonds to constitute "private activity bonds" under Section 141 of the Code. The
City will take any action determined by the City, after consultation with its bond counsel, to be legal
and practicable and required to be taken by the City under future federal laws or regulations in order
to maintain the exemption of the interest on the Bonds from federal income taxation.
Section 19, Defeasance. In the event that money and/or Acquired Obligations maturing at
such time or times and bearing interest to be earned thereon in amounts sufficient to redeem and retire
any or all of the Bonds in accordance with their terms are set aside in a special trust account in the
Bond Account to effect such redemption or retirement and such money and the principal of and
NPaNclerkc\Current Work1COUNCILUtesolurions100-094a.wpd Page 16
�1
interest on such obligations are irrevocably set aside and pledged for such purpose, then no further
payments need to be made into the Bond Account for the payment of the principal of and interest on
such Bonds, and such Bonds shall cease to be entitled to any lien, benefit or security ofthis resolution
except the right to receive the funds so set aside and pledged, and such Bonds shall be deemed not
to be outstanding hereunder or under any other resolution authorizing the issuance of Future Parity
Bonds.
Section 20. General Authorization to Municipal Officials. After the sale of the Bonds, the
proper officials of the City are hereby authorized and directed to do everything necessary to complete
such sale and to deliver the Bonds to the purchaser thereof upon payment of the purchase price
thereof.
Section 21. Amendatory and Supplemental Resolutions.
A. The Council from time to time and at any time may pass a resolution or resolutions
supplemental hereof, which resolution or resolutions thereafter shall become a part ofthis resolution,
for any one or more of the following purposes:
(1) To add to the covenants and agreements ofthe City contained in this resolution,
other covenants and agreements thereafter to be observed, or to surrender any right or power
herein reserved to or conferred upon the City.
(2) To make such provisions for the purpose of curing any ambiguities or of curing,
correcting or supplementing any defective provision contained in this resolution or in regard
to matters or questions arising under this resolution as the Council may deem necessary or
desirable and not inconsistent with this resolution and which shall not adversely affect the
interest of the owners of Parity Bonds.
Any such supplemental resolution of the Council may be adopted without the consent
of the owner of any Parity Bonds at any time outstanding, notwithstanding any of the
provisions of subsection B of this section.
B. With the consent of the owners of not less than 60% in aggregate principal amount
of Parity Bonds at the time outstanding, the Council may pass a resolution or resolutions
supplemental hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this resolution or of any supplemental resolution; provided,
however, that no such supplemental resolution shall:
(1) Extend the fixed maturity of any of the Parity Bonds, or reduce the rate of
interest thereon, or reduce the amount or change the date of any sinking fund installment
requirement, or extend the time of payments of interest from their due date, or reduce the
amount of the principal thereof, or reduce any premium payable on the redemption thereof,
without the consent of the owner of each Parity Bond so affected; or
HPatklerkc\Cunt Work\COLTNCILlaesolutions%00.094a.wpd Page 17
(2) Reduce the aforesaid percentage of owners ofParity Bonds required to approve
any such supplemental resolution without the consent ofthe owners of all of the Parity Bonds
then outstanding; or
(3) Remove the pledge and lien of this resolution on Pledged Revenues.
It shall not be necessary for the consent of the owners of Parity Bonds under this
subsection B to approve the particular form of any proposed supplemental resolution, but it
shall be sufficient if such consent shall approve the substance thereof.
C. Upon the passage of any supplemental resolution pursuant to the provisions of this
section, this resolution shall be deemed to be modified and amended in accordance therewith, and the
respective rights, duties and obligations of the City under this resolution and all owners of Parity
Bonds outstanding hereunder shall thereafter be determined, exercised and enforced thereunder,
subject in all respects to such modification and amendment, and all the terms and conditions of any
such supplemental resolution shall be deemed to be part of the terms and conditions of this resolution
for any and all purposes.
D. Parity Bonds executed and delivered after the execution of any supplemental
resolution adopted pursuant to the provisions of this section may bear a notation as to any matter
provided for in such supplemental resolution, and if such supplemental resolution shall so provide,
new Parity Bonds so modified as to conform, in the opinion of the Council, to any modification of
this resolution contained in any such supplemental resolution, may be prepared by the City and
delivered without cost to the owners of Parity Bonds then outstanding, upon surrender for
cancellation of such Parity Bonds in equal aggregate principal amounts.
Section 22. Disposition of the Proceeds of Sale of the Bonds. The proceeds received from
the sale of the Bonds (exclusive of accrued interest which shall be paid into the Debt Service
Subaccount) shall be deposited into the fund of the City designated by the Finance Director and shall
be used to pay all costs allocable to the issuance of the Bonds and to undertake improvements
authorized by Section 3 of this resolution.
Section 23. Loan Agreement and Continuing_Disclosure. The City Manager and Finance
Director are each authorized to enter into a Loan Agreement with the Alaska Municipal Bond Bank
Authority providing for and relating to the sale of the Bonds to the Alaska Municipal Bond Bank
Authority, and a Continuing Disclosure Certificate, and the City Manager and Finance Director are
authorized to cause the same to be executed and delivered on behalf of the City.
Section 24. Severability. If any one or more of the covenants or agreements provided in
this resolution to be performed on the part of the City shall be declared by any court of competent
jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements shall
be null and void and shall be deemed separable from the remaining covenants and agreements in this
resolution and shall in no way affect the validity of the other provisions of this resolution or of the
Bonds.
UPatldc*6Cuu"t Wo&COUNCILUtesoluliom\00.094a.wpd Page 18
Section 25. Effective Date. This resolution shall become effective immediately provided
that no Parity Bonds shall be issued under this resolution until 10 days from the date hereof.
PASSED AND APPROVED by the City Council ofthe City of Seward, Alaska, this 11 day
of September, 2000.
THE CITY OF SEWARD, ALASKA
Edgar Blatchford, Mayor
AYES: Brossow, Calhoon, King, Orr, Shafer, Blatchford
NOES: Clark
ABSENT: None
ABSTAIN: None
ATTEST:
Patrick Reilly
City Clerk
(City Seal)
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%Tat cdakclCucrent Work\COUNCILVResolutions\00-094a.wpd Page 19
Sponsored by: Administration
CITY OF SEWARD, ALASKA
RESOLUTION 2006-128
A RESOLUTION AUTHORIZING THE CITY OF SEWARD TO ISSUE HARBOR
IMPROVEMENT REVENUE REFUNDING BONDS, 2007 IN THE PRINCIPAL AMOUNT
OF NOT TO EXCEED $2,650,000 TO REFUND CERTAIN OUTSTANDING HARBOR
IMPROVEMENT BONDS OF THE CITY, FIXING CERTAIN DETAILS OF SUCH BONDS
AND AUTHORIZING THEIR SALE AND PROVIDING FOR RELATED MATTERS.
WHEREAS, the City of Seward, Alaska (the "City") is a home rule city and under Section
l I of Article X of the Alaska Constitution may exercise all legislative power not prohibited by law
or the charter of the City, and it has been determined that the matters set forth in this resolution are
not prohibited by law or the charter; and
WHEREAS, there is now outstanding the principal amount of $2,510,000 of Harbor
Improvement Revenue Bonds, 2000 of the City maturing on or after December 1, 2006 (the "2000
Bonds") issued under Resolution No. 2000-094 of the City; and
WHEREAS, the council finds that it is in the best interest of the City to provide for the
refunding, including the payment of principal of and interest on, those maturities of the 2000 Bonds
(the 'Refunded Bonds") whose refunding the City Manager or City Finance Director determines will
�. produce the debt service savings specified in this resolution, by the issuance of general obligation
refunding bonds in the aggregate principal amount of not to exceed $2,650,000 (the 'Bonds"); and
WHEREAS, Section 11.2(a) of the home rule charter of the City provides that the City may
issue refunding bonds without ratification of the voters; and
WHEREAS, the Council finds that it is necessary and appropriate to delegate to each of the
City Manager and City Finance Director authority to determine the maturity amounts, interest rates
and other details of the Bonds, and to determine other matters pertaining to the Bonds that are not
provided for in this resolution; and
WHEREAS, the Alaska Municipal Bond Bank and the City intend to enter into an
Amendatory Loan Agreement, which amends the Loan Agreement dated as of December 1, 2000
between the Alaska Municipal Bond Bank and the City to provide for the refunding of the Refunded
Bonds through their exchange for refunding bonds to be issued by the City, and related matters.
NOW, THEREFORE, BE IT RESOLVED:
Section 1. Definitions. The following terms shall have the following meanings in this
resolution:
(A) "Amendatory Loan Agreement" means the Amendatory Loan Agreement between the
S:\RESOLUTIONS\2006\06-128 harbor Refunding Res.doc Page 1 of 10
City and the Bond Bank, amending the Loan Agreement to provide for the refunding of the Refunded
Bonds through their exchange for the Bonds, and related matters.
(B) "Bond" or 'Bonds" means any of the "Harbor Improvement Revenue Refunding
Bonds, 2007" of the City of Seward, the issuance and sale of which are authorized herein.
(C) 'Bond Bank" means the Alaska Municipal Bond Bank, a public corporation of the
State of Alaska.
(D) 'Bond Bank Bonds" means the General Obligation Refunding Bonds, 2007 Series
One of the Bond Bank.
(E) 'Bond Register" means the registration books maintained by the Registrar, which
include the names and addresses of the Registered Owners of the Bonds or their nominees.
(F) "City" means the City of Seward, a municipal corporation of the State of Alaska,
organized as a home rule city under Title 29 of the Alaska Statutes.
(G) "City Finance Director" means the Finance Director of the City.
(H) "Code" means the Internal Revenue Code of 1986, as amended from time to time,
together with all regulations applicable thereto.
(1) "Council" means the Council of the City of Seward, as the general legislative
authority of the City of Seward, as the same shall be duly and regularly constituted from time to time.
(J) "Loan Agreement" means the Loan Agreement between the City and the Bond Bank
dated as of December 1, 2000, as amended by the Amendatory Loan Agreement.
(K) "2000 Bonds" means the $2,510,000 of Harbor Improvement Revenue Bonds, 2000 of
the City maturing on or after December 1, 2006.
(L) 'Refunded Bonds" means the maturities of the 2000 Bonds whose refunding is
approved by the City Manager or City Finance Director under Section 13.
(M) 'Registered Owner" means the person named as the registered owner of a Bond in the
Bond Register.
(N) 'Registrar" means the City Finance Director.
(0) 'Resolution" means this Resolution of the City.
Section 2. Authorization of Bonds and Purpose of Issuance. For the purpose of effecting the
refunding by exchange of the Refunded Bonds in the manner set forth hereinafter and in the
Amendatory Loan Agreement, the City hereby authorizes and determines to issue and sell the Bonds
SARESOLUTIONS\2006\06-128 harbor Refunding Res.doc Page 2 of 10
in the aggregate principal amount of not to exceed $2,650,000.
Section 3. Obligation of Bonds. The Pledged Revenues as defined in Resolution 2000-094
bmww are hereby pledged to the payment of the principal of and interest on the Bonds as the same become
due and payable.
Section 4. Designation, Maturities, Interest Rates, and Other Details of Bonds. The Bonds
shall be designated "City of Seward, Alaska, Harbor Improvement Revenue Refunding Bonds,
2007." The Bonds shall be in the denomination of $5,000 or any integral multiple thereof, shall be
numbered separately in the manner and with such additional designation as the Registrar deems
necessary for purposes of identification, and may have endorsed thereon such legends or text as may
be necessary or appropriate to conform to the rules and regulations of any governmental authority or
any usage or requirement of law with respect thereto.
A portion of the principal of the Bonds shall mature annually commencing on or after [April
1, 200_1 and continuing no later than [20_1. The Bonds shall bear interest from their date, payable
commencing on a date on or after [October 1, 200_1, and semi-annually thereafter in each year.
Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.
The dated date, the principal and interest payment dates, the aggregate principal amount, the
principal amount of each maturity, and the interest rates on the Bonds shall be determined at the time
of execution of the Amendatory Loan Agreement under Section 17.
Section 5. Redemption. The Bonds may be redeemed as provided in the Loan Agreement.
Section 6. Form of Bond. Each Bond shall be in substantially the following form, with such
variations, omissions and insertions as may be required or permitted by this Resolution:
UNITED STATES OF AMERICA
STATE OF ALASKA
CITY OF SEWARD
(A Municipal Corporation of the State of Alaska)
NO. $
HARBOR IMPROVEMENT REVENUE REFUNDING BOND, 2007
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The City of Seward (the "City"), a municipal corporation of the state of Alaska, hereby
acknowledges itself to owe and for value received promises to pay to the Registered Owner
mom identified above, or its registered assigns, the Principal Amount indicated above in the following
SARESOLUTIONS\2006\06-128 harbor Refunding Res.doc Page 3 of 10
installments on [ 1] of each of the following years, and to pay interest on such
installments from the date hereof, payable on [ 1, 20_1 and semiannually thereafter on the
1st days of and of each year, at the rates per annum as follows:
Principal Interest
Year Amount Rate
For so long as this Bond is owned by the Alaska Municipal Bond Bank (the 'Bond Bank"),
payment of principal and interest shall be made as provided in the Loan Agreement between the
Bond Bank and the City, dated as of December 1, 2000, as amended by the Amendatory Loan
Agreement dated , 200_ (the "Loan Agreement"). In the event that this Bond is no longer
owned by the Bond Bank, installments of principal and interest on this Bond shall be paid by check
or draft mailed by first class mall to the Registered Owner as of the close of business on the fifteenth
day of the month preceding each installment payment date; provided that the final installment of
principal and interest on this Bond shall be payable upon presentation and surrender of this Bond by
the Registered Owner at the office of the Registrar. Interest will be computed on the basis of a 360-
day year consisting of twelve 30-day months. Both principal of and interest on this Bond are payable
in lawful money of the United States of America which, on the respective dates of payment thereof,
shall be legal tender for the payment of public and private debts.
This Bond is one of the Harbor Improvement Revenue Refunding Bonds, 2007 of the City of
Seward, Alaska, of like tenor and effect except as to interest rate, serial number and maturity,
aggregating $ in principal amount, and constituting Bonds authorized for the
purpose of refunding certain general obligation bonds issued by the City, and is issued under
Resolution 2006- of the City entitled:
A RESOLUTION AUTHORIZING THE CITY OF SEWARD TO ISSUE HARBOR
IMPROVEMENT REVENUE REFUNDING BONDS, 2007 IN THE PRINCIPAL
AMOUNT OF NOT TO EXCEED $ TO REFUND CERTAIN
OUTSTANDING HARBOR IMPROVEMENT BONDS OF THE CITY, FIXING
CERTAIN DETAILS OF SUCH BONDS AND AUTHORIZING THEIR SALE
AND PROVIDING FOR RELATED MATTERS
(the 'Resolution").
This Bond maturing on or after 1, , may be called for redemption by the City
on any date on and after 1, as provided in the Loan Agreement.
This Bond is transferable as provided in the Resolution, (i) only upon the bond register of the
City, and (ii) upon surrender of this Bond together with a written instrument of transfer duly
executed by the registered owner or the duly authorized attorney of the registered owner, and
thereupon a new fully registered Bond or Bonds in the same aggregate principal amount and maturity
S:\RESOLUTIONS\2006\06-128 harbor Refunding Res.doc Page 4 of 10
shall be issued to the transferee in exchange therefor as provided in the Resolution and upon the
payment of charges, if any, as therein prescribed. The City may treat and consider the person in
whose name this Bond is registered as the absolute owner hereof for the purpose of receiving
�.. payment of, or on account of, the principal or redemption price, if any, hereof and interest due hereon
and for all other purposes whatsoever.
This Bond is a special limited obligation of the City of Seward, payable solely from Pledged
Revenues as the same shall become due. The full faith and credit of the City are not pledged for the
payment of the principal of and interest on the Bond.
IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts or things required by
the constitution or statutes of the State of Alaska and the home rule charter of the City to exist, to
have happened or to have been performed precedent to or in the issuance of this Bond exist, have
happened and have been performed, and that the series of Bonds of which this is one, together with
all other indebtedness of the City, is within every debt and other limit prescribed by said constitution,
statutes, or charter.
IN WITNESS WHEREOF, THE CITY OF SEWARD, ALASKA, has caused this Bond to be
signed in its name and on its behalf by the manual or facsimile signature of its Mayor and its
corporate seal (or a facsimile thereof) to be impressed or otherwise reproduced her n and attested
by the manual or facsimile signature of its Clerk, all as of the 6�;,--p day of ,
2007.
i
Vanta Shafer, Mayo'
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ATTEST:®se
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[SEAL] OF•P����'`��,
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Section 7. Execution. The Bonds shall be executed in the name of the City by the Mayor or
his designee, and its corporate seal shall be impressed or otherwise reproduced thereon and attested
by the City Clerk. The execution of a Bond on behalf of the City by persons who at the time of the
execution are duly authorized to hold the proper offices shall be valid and sufficient for all purposes,
although any such person shall have ceased to hold office at the time of authentication of the Bond or
shall not have held office on the date of the Bond.
Section 8. Payment of Principal and Interest. The Bonds shall be payable in lawful money of
the United States of America which at the time of payment is legal tender for the payment of public
and private debts. As long as the Bond Bank is the Registered Owner of the Bonds, payment of
principal and interest on the Bonds shall be made as provided in the Loan Agreement. If the Bond
Bank is no longer the Registered Owner of the Bonds, installments of principal and interest on the
SARESOLUTIONS\2006\06-128 harbor Refunding Res.doc Page 5 of 10
Bonds shall be paid by check mailed by first class mail to the Registered Owner as of the fifteenth
day of the month preceding each installment payment date at the address appearing on the Bond
Register; provided that the final installment of principal and interest on a Bond shall be payable upon
presentation and surrender of the Bond by the Registered Owner at the office of the Registrar.
Section 9. Registration. The Bonds shall be issued only in registered form as to both
principal and interest. The City designates the City Finance Director as Registrar for the Bonds. The
Registrar shall keep, or cause to be kept, the Bond Register at the principal office of the City. The
City covenants that, until all Bonds have been surrendered and canceled, it will maintain a system for
recording the ownership of each Bond that complies with the provisions of Section 149 of the Code.
The City and the Registrar may treat the person in whose name any Bond shall be registered as the
absolute owner of such Bond for all purposes, whether or not the Bond shall be overdue, and all
payments of principal of and interest on a Bond made to the Registered Owner thereof or upon its
order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent
of the sum or sums so paid, and neither the City nor the Registrar shall be affected by any notice to
the contrary.
Section 10. Transfer and Exchange. Bonds shall be transferred only upon the books for the
registration and transfer of Bonds kept at the office of the Registrar. Upon surrender for transfer or
exchange of any Bond at such office, with a written instrument of transfer or authorization for
exchange in form and with guaranty of signature satisfactory to the Registrar, duly executed by the
Registered Owner or the duly authorized attorney of the Registered Owner, the City shall execute
and deliver an equal aggregate principal amount of Bonds of the same maturity of any authorized
denominations, subject to such reasonable regulations as the City may prescribe and upon payment
sufficient to reimburse it for any tax, fee or other governmental charge required to be paid in
connection with such transfer or exchange. All Bonds surrendered for transfer or exchange shall be
canceled by the Registrar.
Section 11. Bonds Mutilated, Destroyed, Stolen or Lost. Upon surrender to the Registrar of
a mutilated Bond, the City shall execute and deliver a new Bond of like maturity and principal
amount. Upon filing with the Registrar of evidence satisfactory to the City that a Bond has been
destroyed, stolen or lost and of the ownership thereof, and upon furnishing the City with indemnity
satisfactory to it, the City shall execute and deliver a new Bond of like maturity and principal
amount. The person requesting the execution and delivery of a new Bond under this section shall
comply with such other reasonable regulations as the City may prescribe and pay such expenses as
the City may incur in connection therewith.
Section 12. Designation of Refunded Bonds. The City Manager and the City Finance
Director each is authorized to designate which maturities of 2000 Bonds authorized to be refunded in
this Resolution shall be refunded, provided that the refunding of the 2000 Bonds so designated shall
realize a substantial debt service savings, net of all issuance costs and underwriting discount, on a
present value basis.
Section 13. Tax Covenants. The City covenants to comply with any and all applicable
requirements set forth in the Code in effect from time to time to the extent that such compliance shall
be necessary for the exclusion of the interest on the Bonds from gross income for federal income tax
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purposes. The City covenants that it will make no use of the proceeds of the Bonds which will cause
the Bonds or the Refunded Bonds to be "arbitrage bonds" subject to federal income taxation by
reason of section 148 of the Code. The City covenants that it will not take or permit any action that
would cause the Bonds to be "private activity bonds" as defined in Section 141 of the Code.
Section 14. Amendatory and Supplemental Resolutions.
(A) The Council from time to time and at any time may adopt a resolution or resolutions
supplemental hereto, which resolution or resolutions thereafter shall become a part of this resolution,
for any one or more of the following purposes:
(1) To add to the covenants and agreements of the City in this Resolution, other
covenants and agreements thereafter to be observed, or to surrender any right or power herein
reserved to or conferred upon the City.
(2) To make such provisions for the purpose of curing any ambiguities or of curing,
correcting or supplementing any defective provision contained in this Resolution or in regard to
matters or questions arising under this Resolution as the Council may deem necessary or desirable
and not inconsistent with this Resolution and which shall not adversely affect the interests of the
Registered Owners of the Bonds.
Any such supplemental resolution may be adopted without the consent of the Registered
Owner of any of the Bonds at any time outstanding, notwithstanding any of the provisions of
subsection (B) of this section.
(B) With the consent of the Registered Owners of not less than 60 percent in aggregate
principal amount of the Bonds at the time outstanding, the Council may adopt a resolution or
resolutions supplemental hereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Resolution or of any supplemental resolution;
provided, however, that no such supplemental resolution shall:
(1) extend the fixed maturity of any of the Bonds, or reduce the rate of interest
thereon, or extend the time of payments of interest from their due date, or reduce the amount of the
principal thereof, or reduce any premium payable on the redemption thereof, without the consent of
the Registered Owners of each Bond so affected; or
(2) reduce the aforesaid percentage of Registered Owners of Bonds required to
approve any such supplemental resolution without the consent of the Registered Owners of all of the
Bonds then outstanding.
It shall not be necessary for the consent of the Registered Owners of the Bonds under this
subsection to approve the particular form of any proposed supplemental resolution, but it shall be
sufficient if such consent approves the substance thereof.
(C) Upon the adoption of any supplemental resolution under this section, this Resolution
shall be deemed to be modified and amended in accordance therewith, and the respective rights,
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duties and obligations under this Resolution of the City and all Registered Owners of outstanding
Bonds shall thereafter be subject in all respects to such modification and amendment, and all the
terms and conditions of the supplemental resolution shall be deemed to be part of the terms and
conditions of this Resolution for any and all purposes.
(D) Bonds executed and delivered after the execution of any supplemental resolution
adopted under this section may bear a notation as to any matter provided for in such supplemental
resolution, and if such supplemental resolution shall so provide, new Bonds modified so as to
conform, in the opinion of the City, to any modification of this Resolution contained in any such
supplemental resolution may be prepared by the City and delivered without cost to the Registered
Owners of the Bonds then outstanding, upon surrender for cancellation of such Bonds in equal
aggregate principal amounts.
Section 15. Defeasance. In the event money and/or non -callable direct obligations of, or
obligations the timely payment of principal of and interest on which are unconditionally guaranteed
by, the United States of America or an agency or instrumentality of the United States of America,
maturing at such times and bearing interest to be earned thereon in amounts sufficient to redeem and
retire any or all of the Bonds in accordance with their terms are set aside in a special trust account to
effect such redemption or retirement and such moneys and the principal of and interest on such
obligations are irrevocably set aside and pledged for such purpose, then no further payments need be
made to pay or secure the payment of the principal of and interest on such Bonds and such Bonds
shall be deemed not to be outstanding.
Section 16. Exchange of Bonds; Amendatory Loan Agreement. The Bonds shall be
delivered to the Bond Bank in exchange for the Refunded Bonds. The City has been advised by the
Bond Bank that bond market conditions are fluctuating and that the most favorable market
conditions for the sale of the Bond Bank Bonds may not occur on the date of a regular Council
meeting. The Council has determined that it would be inconvenient to hold a special meeting on
short notice to approve the terms of the Bonds. Therefore, the Council hereby determines that it is in
the best interest of the City to delegate the authority to approve the terms of the Bonds as provided
herein. Each of the City Manager and the City Finance Director is hereby authorized to determine
the aggregate principal amount, maturity amounts, interest rates, yields, dated date, principal and
interest payment dates, and redemption terms, if any, for the Bonds, so that such terms of the Bonds
conform to the terms of the corresponding Bond Bank Bonds; provided that (I) the principal amount
of each maturity of the Bonds shall not exceed the principal amount of the portion of the
corresponding maturity of the Bond Bank Bonds that is allocated to the making of a loan to the City;
and (ii) the interest rate on each maturity of the Bonds shall not exceed the interest rate on the
corresponding maturity of the Bond Bank Bonds. Based upon the foregoing determinations, the City
Manager and the City Finance Director each is authorized to negotiate and execute an Amendatory
Loan Agreement. The authority granted to the City Manager and City Finance Director by this
section shall expire 180 days after the effective date of this Resolution. If the City Manager or City
Finance Director has not executed an Amendatory Loan Agreement within 180 days from the
effective date of this Resolution, the Amendatory Loan Agreement may not be executed on behalf of
the City without further authorization from the Council.
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Section 17. Official Statement. The information in a preliminary Official Statement relating
to the City and the Bonds may be modified as the City Manager or City Finance Director may
determine. The City Manager and City Finance Director each is hereby authorized to approve the
form of the preliminary and the final Official Statement for the Bond Bank Bonds as each pertains to
the City and the Bonds.
Section 18. Authority of Officers. The Mayor, the City Manager, the City Finance Director,
and the City Clerk are, and each of them hereby is, authorized and directed to do and perform all
things and determine all matters not determined by this Resolution, to the end that the City may carry
out its obligations under the Bonds and this Resolution.
Section 19. Miscellaneous.
(A) All payments made by the City of, or on account of, the principal of or interest on the
Bonds shall be made on the several Bonds ratably and in proportion to the amount due thereon,
respectively, for principal or interest as the case may be.
(B) No recourse shall be had for the payment of the principal of or the interest on the Bonds
or for any claim based thereon or on this Resolution against any member of the Council or officer of
the City or any person executing the Bonds. The Bonds are not and shall not be in any way a debt or
liability of the State of Alaska or of any political subdivision thereof, except the City, and do not and
shall not create or constitute an indebtedness or obligation, either legal, moral or otherwise, of said
state or of any political subdivision thereof, except the City.
Section 20. Continuiniz Disclosure. The City hereby covenants and agrees that it will
execute and carry out all of the provisions of a Continuing Disclosure Certificate in form and
substance satisfactory to the Bond Bank. Notwithstanding any other provision of this Resolution,
failure of the City to comply with the Continuing Disclosure Certificate shall not be considered a
default of the City's obligations under this Resolution or the Bonds; however, the beneficial owner of
any Bond or Bond Bank Bond may bring an action for specific performance, to cause the City to
comply with its obligations under this section.
Section 21. Severability. If any one or more of the provisions of this Resolution shall be
declared by any court of competent jurisdiction to be contrary to law, then such provision shall be
null and void and shall be deemed separable from the remaining provisions of this Resolution and
shall in no way affect the validity of the other provisions of this Resolution or of the Bonds.
Section 22. Effective Date. This resolution shall take effect 30 days following adoption by
the Seward City Council.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 27`h
day of November, 2006.
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CITY OF SEWARD, ALASKA
RESOLUTION 2006-128
Cvr ` X 7%
Vanta Shafer, M4' or
AYES: Dunham, Valdatta, Schafer, Bardarson, Thomas, Amberg, Shafer
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
Jeanewis, CMC, Cit�% Clerk
(City Seal)
SEAL
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SARESOLUTIONS\2006\06-128 harbor Refunding Res.doc Page 10 of 10
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