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HomeMy WebLinkAboutResolution No. 2020-22_____________________________________________________________________________________ Sponsored by: Administration CITY OF KENAI RESOLUTION NO. 2020-22 A RESOLUTION AUTHORIZING THE CITY OF KENAI TO ISSUE GENERAL OBLIGATION REFUNDING BONDS IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED THE SUM OF $1,250,000 TO REFUND CERTAIN OUTSTANDING GENERAL OBLIGATION BONDS OF THE CITY, FIXING CERTAIN DETAILS OF SUCH BONDS AND AUTHORIZING THEIR SALE. WHEREAS, the City of Kenai, 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 General Obligation Bond, 2010 Series B (Taxable) of the City maturing on March 1 in the years 2021 through 2030 in the aggregate principal amount of $1,165,000 (the “2010 Bond”), issued under Resolution 2010-05 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 premium and interest on, those maturities of the 2010 Bond (the “Refunded Bond”) whose refunding the City Manager or Finance Director determines will produce the percentage debt service savings specified in this resolution, by the issuance of general obligation refunding bonds (the “Bonds”) in the aggregate principal amount of not to exceed $1,250,000; and, WHEREAS, Article IX, Section 11 of the Alaska Constitution and Section 29.47.320 of the Alaska Statutes provide that general obligation refunding bonds may be issued without an election, Section 29.47.300 of the Alaska Statutes provides that their issuance may be authorized by resolution, and Section 29.47.410 of the Alaska Statutes provides that the Council by resolution may provide for the form and manner of sale of bonds and notes; 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 March 1, 2010, between the Alaska Municipal Bond Bank and the City, to provide for the refunding of the Refunded Bond through its exchange for the Bonds, and related matters; and, WHEREAS, the Council finds that it is necessary and appropriate to delegate to the City Manager and the Finance Director authority to determine the maturity amounts, interest rates and other details of the Bonds, and to determine other matters that are not provided for in this resolution. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA: Section 1. Definitions. The following terms shall have the following meanings in this resolution: Resolution No. 2020-22 Page 2 of 9 _____________________________________________________________________________________ A. “Amendatory Loan Agreement” means the Amendatory Loan Agreement between the City and the Bond Bank, amending the 2010 Loan Agreement, to provide for the refunding of the Refunded Bond through its exchange for the Bonds, and related matters. B. “Bond” or “Bonds” means any of the “General Obligation Refunding Bonds” of the City of Kenai 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 general obligation bonds issued by the Bond Bank to refund all or part of its outstanding General Obligation Bonds, 2010B Series One (Taxable). 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 Kenai, a municipal corporation of the State of Alaska, organized as a home rule city under Title 29 of the Alaska Statutes. G. “Council” means the Council of the City, as the general legislative authority of the City, as the same shall be duly and regularly constituted from time to time. H. “Code” means the Internal Revenue Code of 1986, as amended from time to time, together with all regulations applicable thereto. I. “Government Obligations” means obligations that are either (i) direct obligations of the United States of America, or (ii) obligations of an agency or instrumentality of the United States of America the timely payment of the principal of and interest on which is unconditionally guaranteed by the United States of America J. “Loan Agreement” means the 2010 Loan Agreement, as amended by the Amendatory Loan Agreement. K. “Refunded Bond” means the maturities of the 2010 Bond whose refunding is approved by the City Manager or Finance Director under Section 12. L. “Registered Owner” means the person named as the registered owner of a Bond in the Bond Register. M. “Registrar” means the City Finance Director, or any successor that the City may appoint by resolution. N. “Resolution” means this Resolution 20-__ of the City. O. “2010 Loan Agreement” means the Loan Agreement dated as of March 1, 2010 between the Bond Bank and the City. Section 2. Authorization of Bonds and Purpose of Issuance. For the purpose of effecting the refunding by exchange of the Refunded Bond in the manner set forth in this Resolution and the Amendatory Loan Agreement, and to pay all costs incidental thereto and to the issuance of the Bonds, the City hereby authorizes and determines to issue and sell the Bonds in the aggregate principal amount of not to exceed $1,250,000. Resolution No . 2020-22 Page 3 of 9 Sect ion 3. Obligation of Bonds . The Bonds shall be direct and general obligations of the City and the full faith and credit of the City are hereby pledged to the payment of the principal of and interest on the Bonds. The City hereby irrevocably pledges and covenants that it will levy and collect taxes upon all taxable property within the C ity without limitation as to rate or amount, in amounts sufficient, together with other funds legally available therefor, to pay the princ ipal 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 Kenai , Alaska, General Obligation Refunding Bonds." 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 identifica t ion , 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. The Bonds shall mature in one or more years commencing no earlier than 2020 and ending no later than 2030 . The Bonds shall bear interest from their date , payable commencing on or after July 1, 2020, and semiannually thereafter. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months . Subject to Section 2 and the remainder of this section, the aggregate principal amount, the princ ipal amount of each maturity, the in terest rates , the dated date, the principal and interest payment dates and the record dates for principal and interest payments on the Bonds shall be determined at the time of execution of the Amendatory Loan Agreement under Section 16. Section 5. Optional Redemption. The Bonds shall not be subject to optional redempt ion by the City prior to maturity. 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 : NO. __ UNITED STATES OF AMERICA STATE OF ALASKA CITY OF KENAI (A Municipal Corporation of the State of Alaska) $ __ _ GENERAL OBLIGATION REFUNDING BOND, 2020 SERIES_ Registered Owner Principal Amount DOLLARS The City of Kenai (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, or registered assigns , the principal amount shown above in the following installments on 1 of each of the following years, and to pay interest on such installments from the date hereof, payable on 1, 2020 and semiannually thereafter on the _days of _____ and of each year, at the rates per annum as follows: Resolution No. 2020-22 Page 4 of 9 _____________________________________________________________________________________ Year Principal Amount Interest Rate Year Principal Amount Interest Rate When 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 March 1, 2010, as amended. When this Bond is not owned by the Bond Bank, installments of principal and interest on this Bond shall be paid by check or draft mailed by first class mail to the Registered Owner as of the close of business on the 15th 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 General Obligation Refunding Bonds, 2020 Series __ of the City of Kenai, 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 No. 2020-__ of the City entitled: A RESOLUTION AUTHORIZING THE CITY OF KENAI TO ISSUE GENERAL OBLIGATION REFUNDING BONDS IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED THE SUM OF $1,250,000 TO REFUND CERTAIN OUTSTANDING GENERAL OBLIGATION BONDS OF THE CITY, FIXING CERTAIN DETAILS OF SUCH BONDS AND AUTHORIZING THEIR SALE. (the “Resolution”). Installments of principal of this Bond shall not be subject to prepayment at the option of the City 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. This Bond is a general obligation of the City of Kenai and the full faith and credit of the City are pledged for the payment of the principal of and interest on this Bond as the same shall become due. 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, Resolution No. 2020-22 Page 5 of 9 _____________________________________________________________________________________ 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 KENAI, 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 ____________ 2020. ______________________________ Brian Gabriel, Mayor A T T E S T: _______________________________ Jamie Heinz, CMC, City Clerk [ S E A L ] ASSIGNMENT For value received, the undersigned sells, assigns and transfers to (print or typewrite name, address, zip code and Social Security number or other tax identification number of Transferee) this Bond and irrevocably constitutes and appoints attorney to transfer this Bond on the Bond Register, with full power of substitution in the premises. Dated: Signature Guaranteed: Notice: The assignor’s signature to this assignment must correspond with the name as it appears upon the face of this Bond. Section 7. Execution. The Bonds shall be executed in the name of the City by the manual or facsimile signature of the Mayor, and its corporate seal (or a facsimile thereof) shall be impressed or otherwise reproduced thereon and attested by the manual or facsimile signature of 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 delivery 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. When 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. When the Resolution No. 2020-22 Page 6 of 9 _____________________________________________________________________________________ Bond Bank is not the Registered Owner of the Bonds, installments of principal and interest on the Bonds shall be paid by check mailed by first class mail to the Registered Owner as of the record date for the installment payment 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 Bond. The City Manager and the Finance Director each is authorized to designate which, if any, maturities of the 2010 Bond authorized to be refunded in this Resolution shall be refunded, provided that the refunding of the 2010 Bond so designated shall realize a debt service savings in the aggregate of at least three percent of its principal amount, 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 purposes. Without limiting the generality of the foregoing, the City covenants that it will make no use or investment of the proceeds of the Bonds that will cause the Bonds to be “arbitrage bonds” subject to federal income taxation by reason of section 148 of the Code, and Resolution No. 2020-22 Page 7 of 9 _____________________________________________________________________________________ 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 (the Bond Bank as Registered Owner of each Bond so affected may give such consent by executing an amendment to the Loan Agreement that includes the changes that are effected by such supplemental resolution); 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, 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. Resolution No. 2020-22 Page 8 of 9 _____________________________________________________________________________________ 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 Government Obligations 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 Government 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 Bond. Subject to the limitations provided in Sections 2 and 4, each of the City Manager and the Finance Director is hereby authorized to determine the aggregate principal amount, maturity amounts, interest rates, yields, dated date, principal and interest payment dates, record dates for principal and interest payments, and other details of the 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, each of the City Manager and the Finance Director is authorized to negotiate and execute the Amendatory Loan Agreement. Section 17. Authority of Officers. The Mayor, the acting Mayor, the City Manager, the acting City Manager, the Finance Director, the acting Finance Director, the City Clerk, and the acting City Clerk each 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. The City Manager and the Finance Director each is further authorized from time to time to approve a revised schedule of principal payment amounts and interest rates for the Bonds, in accordance with the refinancing provisions of the Loan Agreement, in connection with a refunding of the Bond Bank Bonds, so long as the said officer finds that the revised debt service schedule is financially advantageous to the City. The City Manager and the Finance Director, each is authorized to sign an amendment to the Loan Agreement that sets forth the revised debt service schedule, and the City Manager, acting City Manager, the Finance Director, acting Finance Director, , the City Clerk and the acting City Clerk and other appropriate officers of the City are authorized and directed to take such steps, to do such other things, and to execute such letters, certificates, agreements, or instruments as in their judgment may be necessary, appropriate or desirable for refinancing the Bonds in connection with a refunding of the Bond Bank Bonds. Section 18. Prohibited Sale of Bonds. No person, firm or corporation, or any agent or employee thereof, acting as financial consultant to the City under an agreement for payment in connection with the sale of the Bonds, is eligible to purchase the Bonds as a member of the original underwriting syndicate either at public or private sale. Resolution No . 2 020-22 Page 9of9 Section 19. Ongoing Disclosure. The City acknowledges that, under Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"), the City may now or in the future be an "obligated person" with respect to the Bond Bank Bonds . In accordance with the Rule and as the Bond Bank may require, the C ity shall enter into a continuing disclosure agreement and undertake to provide certain annual financial information and operating data as shall be set forth in the Amendatory Loan Agreement. Section 20. 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 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 othe r provisions of this Resolution or of the Bonds. Section 22. Effective Date. This resolution shall take effect upon adoption . PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 5 th day of May , 2020 . ATTEST: BRIAN GABRIEL , SR., MAYOR Adopted: May 6, 2020 Amended: June 17, 2020 FORM OF AMENDATORY LOAN AGREEMENT THIS AMENDATORY LOAN AGREEMENT, dated as of the [___] day of [____] 20[__] (the “Loan Agreement”), between the Alaska Municipal Bond Bank (the “Bank”), a body corporate and politic constituted as an instrumentality of the State of Alaska (the “State”) exercising public and essential governmental functions, created pursuant to the provisions of Chapter 85, Title 44, Alaska Statutes, as amended (the “Act”), having its principal place of business at Juneau, Alaska, and [___________________], Alaska, a duly constituted ______________ of the State (the “[City] [Borough]”): WITNESSETH: WHEREAS, pursuant to the Act, the Bank is authorized to issue bonds and loan money (the “Loans”) to governmental units; and WHEREAS, the [City] [Borough] is a “Governmental Unit” as defined in the General Bond Resolution of the Bank hereinafter mentioned and is authorized to accept a Loan from the Bank, evidenced by its municipal bond; and WHEREAS, to provide for the issuance of bonds of the Bank to obtain from time to time money with which to make, and or refinance, municipal Loans, the Board of Directors of the Bank (the “Board”) adopted its General Obligation Bond Resolution on July 13, 2005, as amended (the “General Bond Resolution”); and WHEREAS, the Board approved certain modifications to the General Bond Resolution, effective on the date when all bonds issued under the terms of the General Bond Resolution, prior to February 19, 2013, cease to be outstanding; and WHEREAS, the Bank made a Loan to the [City] [Borough] from proceeds of the Bank’s _______________ Bonds, _____ Series __ (“_____ Series __ Bonds”) in the amount of $_______________, evidenced by a Loan Agreement dated ________________ 1, ____ (the “Loan Agreement”) between the Bank and the [City] [Borough]; and WHEREAS, the Bank’s _____ Series ___ Bonds were issued pursuant to the terms of the Bank’s General Bond Resolution, as amended and supplemented by a series resolution; and WHEREAS, as security for repayment of the Loan and as provided in the [_____] Loan Agreement, the [City] [Borough] issued its __________________ Bond, ____ Series __, dated ________________ __, _____ (the “Municipal Bond”) of which the Bank is the registered owner; and WHEREAS, the Bank has determined that refunding a portion of the outstanding ____ Series __ Bonds will result in a debt service savings thereon and on the Municipal Bond; and WHEREAS, on April 29, 2020, the Board adopted Series Resolution No. 2020-01 (the “Series Resolution” and, together with the General Bond Resolution, the “Bond Resolution”) authorizing, among other things, the issuance of its General Obligation and Refunding Bonds, 2020 Series One (the “Refunding Bonds”), in part to refund a portion of the ____ Series __ Bonds; and WHEREAS, to effect the proposed refunding and resulting debt service savings on the ____ Series __ Bonds and the Municipal Bond, and to conform the terms of the Loan Agreement to the current practices of the Bank, it is necessary to amend the terms of the Loan Agreement and to provide for the issuance by the [City][Borough] to the Bank of the [City’s][Borough’s] _________ Bond (the “_____ Municipal Bonds” and together with the ______ Municipal Bond, the “Municipal Bond”) and for the refunding of the [City’s][Borough’s] Municipal Bond as provided herein. NOW, THEREFORE, the parties agree as follows: 1. The Bank will refund a portion of the outstanding _____ Series __ Bonds as provided in the Series Resolution. The amounts of the principal installments of the Municipal Bond corresponding to the refunded maturities of the ____ Series __ Bonds, and the interest payable thereon, shall be adjusted pro rata in accordance with the debt service payable on the Refunding Bonds, as set forth in the ____ Municipal Bond delivered to the Bank in exchange for the ____ Municipal Bond. The ____ Municipal Bond shall mature in the principal amounts and bear interest at the rates per annum as stated on Exhibit A appended hereto. 2. Section 2 of the ______ Loan Agreement is amended to include the following paragraph: The [City] [Borough] represents that it has duly adopted or will adopt all necessary ordinances or resolutions, including [Ordinance] [Resolution] No. ________, adopted on _________ __, 20__ (the “[City] [Borough] Refunding [Ordinance] [Resolution]” and together with the [City’s][Borough’s] ____ [Resolution][Ordinance], the “[City’s][Borough’s] [Resolution][Ordinance]”), and has taken or will take all proceedings required by law to enable it to enter into this Amendatory Loan Agreement and to issue its ____ Municipal Bond to the Bank and that the ____ Municipal Bond will constitute [a general obligation bond, secured by the full faith and credit] [a revenue bond, a special and limited obligation] of the [City] [Borough], all duly authorized by the [City] [Borough] Refunding [Ordinance] [Resolution]. 3. The ____ Municipal Bond shall be subject to optional prepayment prior to maturity on and after the same date, and on the same terms as the Refunding Bonds may be subject to optional redemption as set forth in Appendix A. 4. [__] of the ____ Loan Agreement is amended to include the following paragraph: The [City][Borough] represents that the [City’s][Borough’s] [Resolution][Ordinance] is in full force and effect and has not been amended, supplemented or otherwise modified, other than by the [City][Borough] Refunding [Resolution]Ordinance] and as previously certified by the [City][Borough] to the Bank. 5. [Section [ ] of the _____ Loan Agreement is amended by replacing the current language with the following: The [City] [Borough] agrees that if its bonds constitute twenty percent (20%) or more of the outstanding principal of municipal bonds held by the Bank under its General Bond Resolution it shall provide to the Bank for inclusion in future official statements of the Bank and the Bank’s annual reports, to the extent required by the Bank’s continuing disclosure undertakings, financial and operating information of the City of the type and in the form requested by the Bank. The [City] [Borough] further agrees that if its bonds constitute twenty percent (20%) or more of the outstanding principal of municipal bonds held by the Bank under its General Bond Resolution, it shall execute a continuing disclosure agreement prepared by the Bank for purpose of Securities and Exchange Commission Rule 15c2-12, adopted under the Securities and Exchange Act of 1934.] [6. A new Section __ is added to the Loan Agreement, as follows: The [City] [Borough] hereby agrees to keep and retain, until the date six years after the retirement of the ____ Municipal Bond, or any bond issued to refund the ____ Municipal Bond, or such longer period as may be required by the [City’s] [Borough’s] record retention policies and procedures, records with respect to the investment, expenditure and use of the proceeds derived from the sale of its ____ Municipal Bond, including without limitation, records, schedules, bills, invoices, check registers, cancelled checks and supporting documentation evidencing use of proceeds, and investments and/or reinvestments of proceeds. The [City] [Borough] agrees that all records required by the preceding sentence shall be made available to the Bank upon request.] [7. A new Section __ is added to the ____ Loan Agreement, as follows: The [City] [Borough] hereby agrees that it shall fully fund, at the time of loan funding, its debt service reserve fund (in an amount equal to $_____________ ) which secures payment of principal and interest on its Municipal Bond, and that such fund shall be held in the name of the [City] [Borough] with the Trustee. The [City] [Borough] further agrees that the yield on amounts held in such debt service reserve account shall be restricted to a yield not in excess of ______________ percent.] 8. A new Section __ is added to the ____ Loan Agreement, as follows: (a) The [City] [Borough] hereby certifies that all ____ Municipal Bond proceeds, except for those proceeds that are accounted for as transferred proceeds in the arbitrage certificate for its ____ Municipal Bond, have been expended prior to the date hereof. (b) The [City] [Borough] hereby certifies that to date all required rebate calculations relating to the ____ Municipal Bond have been timely performed and the [City] [Borough] has remitted any necessary amount(s) to the Internal Revenue Service. (c) The [City] [Borough] hereby certifies that (i) the ____ Municipal Bond was issued exclusively for new money purposes; and (ii) the ____ Municipal Bond has not previously been used to directly or indirectly advance refund a prior issue of any municipal bonds of the [City][Borough].] 9. A new Section __ is added to the ____ Loan Agreement, as follows: Except as heretofore amended and as amended hereby, the Loan Agreement will remain in full force and effect so long as the ____ Municipal Bond remains outstanding. IN WITNESS WHEREOF, the parties hereto have executed this Amendatory Loan Agreement as of the date first set forth above. ALASKA MUNICIPAL BOND BANK By: DEVEN MITCHELL Executive Director [CITY] [BOROUGH], ALASKA By: Its: EXHIBIT A _________________, Alaska ____________________, ____ Series __, As Amended on _____________ __, 20__ Principal Sum of $_____________________ Principal Payment Date ( 1, 20 ) Principal Amount Interest Rate Principal installments shall be payable on __________ 1 in each of the years, and in the amounts set forth above. Interest on the ____ Municipal Bond shall be payable on _________ 1, 20__, and thereafter on ________ 1 and ________ 1 of each year. [Prepayment Provisions: The Municipal Bond principal installments are not subject to prepayment prior to maturity.] Optional Prepayment: The Municipal Bond principal installments due on or after ___________ 1, 20__ are subject to prepayment in whole or in part at the option of the [City] [Borough] on any date on or after __________ 1, 20__, at a price of 100% of the principal amount thereof to be prepaid, plus accrued interest to the date of prepayment. MEMORANDUM TO: Mayor Brian Gabriel and Kenai City Council THROUGH: Paul Ostrander, City Manager FROM: Terry Eubank DATE: April 3, 2020 SUBJECT: Resolution 2020-22 The purpose of this memo is to recommend adoption of Resolution 2020-22 which will authorize the advanced refunding of the City’s 2010 Library Expansion Bonds. The 2010 Library Expansion Bonds totaled $2,000,000 and were issued for to expand the Kenai Community Library. The original bonds were a combination of traditional tax-exempt bonds and taxable Recovery Zone Economic Development Bonds. All tax-exempt bonds have been retired leaving only the taxable Recovery Zone Economic Development Bonds. These bonds are callable in October of this year. Resolution 2020-22 will authorize the issuance of new tax-exempt bonds from which the proceeds will used to retire the original bonds. The new bonds will be at a lower interest rate resulting in lower debt service over the remaining ten years of the debt. Total savings are estimated at $84,802.69 with a present value of $75,620.08. Future debt service will be reduced by an average of $8,480 per year. Your support is respectfully requested. City of Kena i I 210 l=id algo Ave , Kenai, AK 99611 -77941907.283.75 35 I www.kenai .cily MEMORAND.UM TO: T HROUGH: FROM: DATE: SUBJECT: Mayor Gabriel and Council Members Paul Ostrander, City Manager Terry Eubank , Finance Director June 16, 2020 Recommended amendment to previously adopted legislation, Resolution 2020-22 . The purpose of this memo is to recommend amendment to previously adopted legislation, Resolution 2020-22 which was adopted at the May 6, 2020 Council meeting. Reso lution 2020- 22 authorized the issuance of new tax-exempt bonds from which the proceeds will used to retire the City's outstanding library expansion bonds. The new bonds will be at a lower interest rate resulting in lower debt service over the remaining ten years of the debt. In discussions with the City's Bond Counsel and the issuance's Financ ial Advisor a slight amendment to the original resolution is needed to maximize the City 's savings in this refinancing . The original resolution indicated the newly issued bonds would not commence maturing until the year 2021 . If the year is modified to the year 2020 the City should reali ze an additional $1 ,500 in savings over the remaining 10-year life of the bonds . This amendment must be completed by June 23rd at the latest as the bonds are scheduled to be issued on July 7th with a July 101h closing date requiring this action by laydown . I have reviewed the payment schedule with what was budgeted in FY2021 and sufficient funds are budgeted to accommodate this change . $141 ,518 was budgeted in the General Fund to service the outstanding bonds and the new debt service for FY2021 is projected to be $135,958 . Your support for the following amendment is respectfully requested . The following motion is suggested : Move to amend pr eviously adopted legislation, Resolution 2020-22, by amending t he year 2021 in the second paragraph of Sect ion 4 to 2020.