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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 1 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 1 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 1 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 SEAL `• • �� %•j• ............ ��L,•. OF ASP.••' 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) +%tj1111i#xrq .�```�t w . r i r % CO %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' ,y,1111111++� ATTEST:®se w• :.� BYO . Z Je Lewis, C`M City Clerk [SEAL] OF•P����'`��, t++++11/11'1st 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 S:\RESOLUTIONS\2006\06-128 harbor Refunding Res.doc Page 6 of 10 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, SARESOLUTIONS\2006\06-128 harbor Refunding Res.doc Page 7 of 10 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. SARESOLUTIONS\2006\06-128 harbor Refunding Res.doc Page 8 of 10 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. S:\RESOLUTIONS\2006\06-128 harbor Refunding Res.doc Page 9 of 10 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 •+ ..yam : ca • lift. O p,4811116k� R0 SARESOLUTIONS\2006\06-128 harbor Refunding Res.doc Page 10 of 10 Ji > 13