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CCR1996058The following resolution was then introduced and moved by Alderperson Sanders and seconded by Alderperson Rasmussen RESOLUTION NO. 58-96 A RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF $5,900,000 SEWER SYSTEM REVENUE BONDS OF THE CITY OF MUSKEGO, WAUKESHA COUNTY, WISCONSIN, AND PROVIDING FOR THE PAYMENT OF THE BONDS AND OTHER DETAILS WITH RESPECT TO THE BONDS 0 WHEREAS, the City of Muskego, Waukesha County, Wisconsin ("City") now owns and operates and has for many years owned and operated its Sewer System, a public utility (the Sewer System and all properties of every nature in connection with such System now or hereafter owned by the City, including all improvements and extensions thereto, all real and personal property of every nature comprising part of and used or useful in connection therewith, and all appurtenances, contracts, leases, franchises and other intangibles, are hereinafter referred to as the "System") ; and WHEREAS, no bonds or other obligations payable from the revenues of the System are outstanding, other than the City's Sewerage System Mortgage Revenue Bonds, Series 1973, dated August 1, 1973, and the City has provided for the payment of those bonds by the deposit of an amount sufficient to pay the principal of and interest and redemption premium on the bonds on their May 1, 1996 redemption date; and 0 WHEREAS, under the provisions of Chapter 66 of the Statutes of Wisconsin any city in the State of Wisconsin may, by action of its governing body, provide for extending and improving a public utility from the proceeds of bonds, which bonds are to be payable only from the net income and revenues derived from the operation of such utility and are to be secured by a pledge of the revenues of the utility; and WHEREAS, additions, improvements and extensions to the System, consisting of the construction of sewer main extensions and a lift station and the acquisition of equipment for the System, are necessary to adequately supply the needs of the City and the residents thereof; and WHEREAS, it is now necessary and desirable that the City issue and sell revenue bonds payable solely from the revenues to be derived from the operation of the System, for the purpose of financing the cost of such additions, improvements and extensions, which bonds are to be authorized and issued pursuanr to the provisions of Section 66.066, Wis Stats. NOW, THEREFORE, the Common Council of the City of Muskego, Waukesha County, Wisconsin, do resolve that 0 -2- Q01\290668.1 Section 1(A). Authorization of Bonds. For the purpose of providing for the cost of additions, improvements and extensions to the System, the City shall borrow on the credit of the income and revenue of the System the sum of $5,900,000. Negotiable, fully-registered bonds of the City, in the denomination of $5,000, or any whole multiple thereof, shall be issued in evidence thereof (the "Bonds"). The Bonds shall be designated "Sewer system Revenue Bonds", shall be numbered from R-l upward and shall be dated March 1, 1996. The Bonds shall mature on September 1 of each of the years and in the amounts set forth below The Bonds described in Section l(B1 (the "Term Bonds") shall be subject to mandatory redemption by lot on September 1 of each of the years and in the amounts specified in Section l(B), and in the manner specified in Section 1(B) Year of Maturity 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2016 Principal Amount $ 170,000 180,000 190,000 210,000 220,000 230,000 250,000 260,000 270,000 285,000 300,000 315,000 325,000 340,000 355,000 370,000 385,000 I, 245,000 Bonds maturing in the years 2007 through 2016 shall be subject to redemption prior to maturity at the option of the City in whole or from time to time in part on September 1, 2006 or on any day thereafter at the price of par plus accrued interest to the date of redemption The amounts and maturities of the Bonds to be redeemed shall be selected by the City. If less than the entire principal amount of any maturity is to be redeemed, the Bonds of that maturity which are to be redeemed shall be selected by lot. The Bonds shall bear interest at the rates per annum set forth below, payable on March 1 and September 1 of each year, commencing September 1, 1996. Interest shall be computed upon the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to the rules of the Municipal Securities Rulemaking Board. 0 -3- Q81\293668.1 Year of Maturity 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2016 Interest Rate 4.375% 4.375 4.50 4.50 4.50 4 50 4.60 4 60 4.60 4.70 4 70 4.80 4.90 5.00 5.10 5 20 5.25 5.25 Section 2(B). Mandatory Redemption of Term Bonds The Bonds maturinq on Seocember 1, 2016 are Term Bonds The Term Bonds shall be subject to mandatory redemption on September 1 of each of the years and in the amounts set forth below at the price of par plus accrued interest. 0 Year Amount 2014 $400,000 2015 415,000 2016 (maturity) 430,000 The Term Bonds to be so redeemed in each such year shall be selected by lot from among the Term Bonds then outstanding. Notice of each such redemption shall be given in the manner and at the times specified in the bond form established in Section 2 hereof. The schedule of maturities and mandatory redemptions is found to be such that the amount of annual debt service payments is reasonable in accordance with prudent municipal utility practices The Bonds shall be signed by the manual or facsimile signatures of the Mayor and City Clerk of the City (provided that, unless the City has contracted with a fiscal agent to authenticate the Bonds, at least one of such signatures shall be manual), and sealed with the corporate seal of the City, or a facsimile thereof. The Bonds, together with interest thereon, shall be payable only out of the Special Redemption Fund hereinafter provided, and shall be a valid claim of the owner thereof only against the Special Redemption Fund and the revenues pledged to such Fund, a and sufficient revenues are pledged to the Special Redemption Fund, and shall be used for no other purpose than to pay the principal and interest on the Bonds and Parity Bonds, as the same fall due. Section 2. Form of Bonds. The Bonds shall be in substantially the form set forth on Exhibit A attached hereto. Section 3. Definitions. In addition to the words defined elsewhere in this Resolution, the following words shall have the following meanings unless the context or use indicates another or different meaning or intent: "Annual Debt Service Requirement" means the total amount of principal and interest due on the Bonds and Parity Bonds in any Bond Year (whether the principal is due by maturity or mandatory redemption) . "Bond Year" means the one-year period ending on a principal payment or mandatory redemption date for the Bonds. "Code" means the Internal Revenue Code of 1986, as amended. "Fiscal Year" means the fiscal year adopted by the City for the System, which is currently the calendar year "Net Revenues" means the Revenues minus all Operation and Maintenance Expenses of the System "Net Operating Revenues" means the Operating Revenues minus a all Operation and Maintenance Expenses. "Operating Revenues" means all Revenues derived from operation of the System, including the revenues received from the City for services rendered to it Operating Revenues do not include proceeds of the collection of reserve capacity assessments or other special assessments, tax increment revenues or income derived from investments "Operation and Maintenance Expenses" means the reasonable and necessary costs of operating, maintaining, administering and repairing the System, including salaries, wages, costs of materials and supplies, insurance and audits, but excluding depreciation, debt service, tax equivalents and capital expenditures. "Parity Bonds" means additional bonds issued on a parity as to pledge and lien with the Bonds in accordance with the provisions of Section 9 of this Resolution "Reserve Requirement" means the least of (a) 10% of the proceeds of the Bonds, (b) the highest Annual Debt Service Requirement on the Bonds, or (c) 125% of average annual debt service on the Bonds. If Parity Bonds are issued, the Reserve Requirement shall be an amount equal to the amount permitted to be on deposit in the Reserve Account pursuant to Section -5- 081\290668 1 148(d) (1) of the Code, but shall not exceed the maximum amount of principal and interest due on the Bonds and the Parity Bonds in any Bond Year. 0 "Revenues" means all income and revenue of the System derived from any source, including the revenues received from the City for services rendered to it, and all monies received from any other source, including proceeds of the collection of special assessments and income derived from investments. Section 4. Income and Revenue Funds; Flow of Funds. When the Bonds shall have been delivered in whole or in part, the Revenues shall be set aside into the following separate and special funds, which funds are hereby created, to be used and applied as described below: - Revenues in amounts sufficient to provide for the reasonable and proper operation and maintenance of the System through the payment of Operation and Maintenance Expenses shall be set aside into the "Sewer System Operation and Maintenance Fund" (the "Operation and Maintenance Fund") . - Revenues in amounts sufficient to pay the principal of and the interest on the Bonds and Parity Bonds and to meet the Reserve Requirement shall be set aside into the "Sewer System Special Redemption Fund" (the "Special Redemption Fund"), to be applied to the payment of the principal of and interest on the Bonds and Parity Bonds and to meet reserve requirements. The monies standing in the Special Redemption Fund are hereby irrevocably pledged to the payment of principal of and interest on the Bonds and Parity Bonds. 0 - Revenues in amounts sufficient to provide a proper and adequate depreciation account for the System shall be set aside into the "Sewer System Depreciation Fund" (the "Depreciation Fund") . The Operation and Maintenance Fund and the Depreciation Fund shall be deposited as received in public depositories to be selected by the Common Council in the manner required by Chapter 34 of the Wisconsin Statutes and may be invested in legal investments subject to the provisions of Section 66.04(2), Wis Stats. Money in the Operation and Maintenance Fund shall be used to pay Operation and Maintenance Expenses as the same come due; money not required for Operation and Maintenance Expenses shall be used first to remedy any deficiency in the Special Redemption Fund and next to accumulate a reserve in the Operation and Maintenance Fund equal to estimated Operation and Maintenance Expenses for one month. Any money then available and remaining in the Operation and Maintenance Fund may be transferred to the Surplus Fund, which is hereby created. Money in the Depreciation Fund shall be available and shall be used, whenever necessary, to restore any deficiency in the 0 Special Redemption Fund and for the maintenance of the Reserve Account therein. When the Special Redemption Fund is sufficient for its purposes, funds in the Depreciation Fund may be expended for repairs, replacements, new construction, extensions or additions to the System. Any money on deposit in the Depreciation Fund in excess of $485,965 (or such higher amount as the Common Council determines from time to time to constitute a proper and adequate depreciation account) and not required during the current Fiscal Year for the purposes of the Depreciation Fund, may be transferred to the Surplus Fund. 0 It is the express intent and determination of the Common Council that the amount of Revenues to be set aside and paid into the Special Redemption Fund (including the Reserve Account) shall in any event be sufficient to pay principal of and interest on the Bonds and Parity Bonds and to meet the Reserve Requirement, and the City Treasurer shall from year to year deposit at least sufficient Revenues in the Special Redemption Fund to pay promptly all principal and interest falling due on the Bonds and Parity Bonds and to meet reserve requirements. The Revenues so set aside for payment of the principal of and interest on the Bonds and to meet reserve requirements shall be set apart and shall be paid into the Special Redemption Fund not later than the 10th day of each month The amount deposited each month shall be not less than one-sixth of the interest next coming due, plus one-twelfth of the principal next maturing or subject to mandatory redemption on the next redemption date. The minimum amounts to be so deposited to meet the debt service payments due on the Bonds are as follows: For Debt Service Payments Due in the Bond Year Ending on SeDtember 1 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Principal Due By Maturity And Mandatory RedemDtion $ -- 170,000 180,000 190,000 210,000 220,000 230,000 250,000 260,000 270,000 285,000 300,000 315,000 325,000 340,000 Interest $143,951.25 287,902.50 280,465.00 272,590.00 264,040.00 254,590.00 244,690.00 234,340.00 222,840.00 210,880.00 198,460.00 185,065.00 170,965.00 155,845.00 139.920.00 Total $143,951.25 457,902.50 460,465.00 462,590.00 474,040.00 474,590.00 474,690.00 484,340.00 482,840.00 480,880.00 483,460.00 485,065 00 485,965.00 480,845.00 479,920.00 -7- For Debt Service Principal Due Payments Due in the By Maturity Bond Year Ending on And Mandatory RedemDtion Interest Total 0 SeDtember 1 2011 2012 2013 2014 2015 2016 $355,000 $122,920 00 $477,920.00 370,000 104,815.00 474,815.00 385,000 85,575.00 470,575.00 400,000 65,362.50 465,362 50 415,000 44,362 50 459,362.50 430,000 22,575.00 452,575.00 The Special Redemption Fund shall be used for no purpose other than the payment of interest upon and principal of the Bonds and Parity Bonds promptly as the same become due and payable or to pay redemption premiums. All money in the Special Redemption Fund shall be deposited in a special account and invested in legal investments subject to Section 66.04(2), Wis. Stats., and the monthly payments required to be made to the Special Redemption Fund shall be made directly to such account. To additionally secure the payment of principal of and interest on the Bonds and Parity Bonds, a separate account in the Special Redemption Fund known as the "Reserve Account" (the "Reserve Account") is hereby established and shall be funded as provided below. The City covenants and agrees that upon the issuance of the Bonds there will be paid into the Reserve Account an amount equal to the Reserve Requirement. The City covenants and agrees that at any time that the amount in the Reserve Account shall be less than the Reserve Requirement, those funds in the Special Redemption Fund, the Operation and Maintenance Fund, the Depreciation Fund and the Surplus Fund which are in excess of the minimum amounts required by the preceding paragraphs to be paid therein will be paid into the Reserve Account each month until the Reserve Requirement will again have accumulated in the Reserve Account If for any reason there shall be insufficient funds on hand in the Special Redemption Fund to meet principal or interest becoming due on the Bonds or Parity Bonds, then all sums then held in the Reserve Account shall be used to pay the portion of interest or principal on such Bonds or Parity Bonds becoming due as to which there would otherwise be default, and thereupon the payments required by this paragraph shall again be made into the Reserve Account until an amount equal to the Reserve Requirement is on deposit in the Reserve Account. 0 Funds in the Special Redemption Fund in excess of the minimum amounts required to be paid therein plus reserve requirements may be transferred to the Surplus Fund. Money in the Surplus Fund shall first be used when necessary to meet requirements of the Operation and Maintenance Fund including the one month reserve, the Special Redemption Fund including the Reserve Account, and the Depreciation Fund. Any money then remaining in the Surplus Fund at the end of any Fiscal Year may be used only as permitted and in the order specified in -8- QB1\290668.1 Section 66 069(1) (c), Wis. Stats. Money thereafter remaining in the Surplus Fund may be transferred to any of the funds or accounts created by this section Section 5. Service to City. The reasonable cost and value 0 of any service rendered to the City by the System, including reasonable health protection charges, shall be charged against the City and shall be paid by it in monthly installments as the service accrues, out of the current revenues of the City collected or in the process of collection, exclusive of the revenues derived from the System, to wit: out of the tax levy of the City made by it to raise money to meet its necessary current expenses. The amount of such reasonable cost and value shall be equal to the lesser of $485,965 or such part thereof as may be necessary from year to year to pay the balance of an amount which, together with other Revenues of the System, will produce in each Bond Year Net Revenues equivalent to not less than 1 25 times the Annual Debt Service Requirement. Such compensation for such service rendered to the City shall, in the manner provided hereinabove, be paid into the separate and special funds described in Section 4 of this Resolution. However, such payment out of the tax levy shall be subject to: (a) approval of the Public Service Commission, or successors to its functions, if necessary, (b) yearly appropriations therefor and (c) applicable levy limitations, if any; and neither this Resolution nor such payment shall be construed as constituting an obligation of the City to make any such appropriation over and above the reasonable cost and value of services rendered to the City and its inhabitants or to make any subsequent payment over and above such reasonable cost and value. 0 Section 6. Operation of Svstem; City Covenants It is covenanted and agreed by the City with the owner or owners of the Bonds, and each of them, that: It will faithfully and punctually perform all duties with reference to the System required by the Constitution and Statutes of the State of Wisconsin, including the making and collecting of reasonable and sufficient rates lawfully established for services rendered by the System, and will segregate the Revenues of the System and apply them to the respective funds described hereinabove; It will not sell, lease, or in any manner dispose of the System, including any part thereof or any additions or extensions that may be made part thereto, except that the City shall have the right to sell, lease or otherwise dispose of any property of the System found by the Common Council to be neither necessary nor useful in the operation of the System, provided the proceeds received from such sale, lease or disposal shall be paid into the Special Redemption Fund or applied to the acquisition or construction of capital facilities for use in the normal operation of the System, and such payment shall not reduce the amounts otherwise required to be paid into the Special Redemption Fund ; QB1\29066B.I 9- It will pay or cause to be paid all lawful taxes, assessments, governmental charges, and claims for labor, materials or supplies which if unpaid could become a lien upon the System or its Revenues or could impair the security of the Bonds ; 0 It will cause the improvements to the System to be made as It will maintain in reasonably good condition and operate expeditiously as possible; the System, and will establish, charge and collect such lawfully established rates and charges for the service rendered by the System, so that in each Bond Year (a) Net Operating Revenues shall not be less than 115% of the Annual Debt Service Requirement and (b) Net Revenues shall not be less than 125% of the Annual Debt Service Requirement and so that the Revenues of the System herein agreed to be set aside to provide for the payment of the Bonds and the interest thereon as the same becomes due and payable, and to meet the Reserve Requirement as provided in Section 4 of this Resolution, will be sufficient for those purposes; and It will prepare a budget not less than sixty days prior to the end of each Fiscal Year and, in the event such budget indicates that the Net Operating Revenues or Net Revenues for each Bond Year will not exceed the Annual Debt Service Requirement for each corresponding Bond Year by the applicable proportions stated hereunder, will take any and all steps permitted by law to increase rates so that the aforementioned proportions of Net Operating Revenues and Net Revenues to the Annual Debt Service Requirement shall be accomplished as promptly as possible 0 Section 7. Books and Accounts; Insuection The City will keep proper books and accounts relative to the System separate from all other records of the City and will cause such books and accounts to be audited annually by a recognized independent firm of certified public accountants including a balance sheet and a profit and lose statement of the System as certified by such accountants Copies of such audits shall be mailed promptly from time to time as soon as available to the original purchaser of the Bonds. Each such audit, in addition to whatever matters may be thought proper by the accountants to be included therein shall include the following: (1) a statement in detail of the income and expenditures of the System for the Fiscal Year; (2) a balance sheet as of the end of such Fiscal Year; (3) the accountants' comment regarding the manner in which the City has carried out the requirements of this Resolution and the accountants' recommendations for any changes or improvements in the operation of the System; (4) the number of connections to the System at the end of the Fiscal Year, for each user classification (i.e., residential, commercial, public and industrial); (5) a list Of the insurance policies in force at the end of the Fiscal Year setting out as to each policy the amount of the policy, the risks covered, the name of the insurer, and the expiration date of the - 10 - Q01\290668 1 policy; and (6) the volume of water used in computing the sewer service charse. - The owners of any of the Bonds shall have at all reasonable times the right to inspect the System and the records, accounts and data of the City relating thereto. Section 8. Insurance So long as any of the Bonds are outstanding the City will carry for the benefit of the owners of the Bonds: (a) adequate fire, lightning, vandalism, riot, strike, explosion, civil commotion, malicious damage, tornado and windstorm insurances on all portions of the System which are subject to loss through such casualties; (b) adequate insurance against loss of use and occupancy resulting from such casualties; (c) adequate public liability insurance and (d) insurance of the kinds and in the amounts normally carried by private companies engaged in the operation of similar systems All money received for loss of use and occupancy shall be considered Revenue of the System payable into the separate funds named in Section 4 of this Resolution All money received for losses under any of such casualty policies, except those specified in (b) above, shall be used in repairing the damage or in replacing the property destroyed provided that if the Common Council shall find it is inadvisable to repair such damage or replace such property and that the operation of the System has not been impaired thereby, such money, including proceeds from insurance under (b) above, shall be deposited in the Special Redemption Fund, but in that event such payments shall not reduce the amounts otherwise required to be paid into the Special Redemption Fund. Section 9. Additional Bonds. No bonds or obligations payable out of the Revenues of the System may be issued in such manner as to enjoy priority over the Bonds. Additional obligations may be issued if their lien and pledge is junior and subordinate to that of the Bonds. Additional obligations may be issued on a parity with the Bonds as to the pledge of revenues of and the lien on the System ("Parity Bonds") only if all of the following conditions are met: 0 (1) The Net Operating Revenues of the System for the Fiscal Year immediately preceding the issuance of such additional bonds must have been equal to at least 1 15 times the highest annual interest and principal requirements on all bonds outstanding payable from the Revenues of the System and on the bonds then to be issued and Net Revenues of the System for the Fiscal Year immediately preceding the issuance of such additional bonds must have been equal to at least 1 25 times the highest annual interest and principal requirements on all bonds outstanding payable from the Revenues of the System and on the bonds then to be issued Should an increase in permanent rates and charges, including those made to the City, be properly ordered and made effective during the Fiscal Year immediately prior to the issuance of such additional bonds or during that part of the Fiscal Year of issuance prior to such issuance, then Revenues for purposes of such computation shall include such additional Revenues as an independent certified public accountant, - 11 - QB1\290668 1 consulting professional engineer or the Wisconsin Public Service Commission may certify would have accrued during the prior Fiscal Year had the new rates been in effect during that entire immediately prior Fiscal Year (2) The payments required to be made into the funds enumerated in Section 4 of this Resolution (including the Reserve Account, but not the Surplus Fund) must have been made in full (3) The additional bonds must have principal maturing on September 1 of each year and interest falling due on March 1 and September 1 of each year (4) The amount on deposit in the Reserve Account must be increased to an amount equal to the Reserve Requirement applicable upon the issuance of Parity Bonds as defined in Section 3 hereof. (5) The proceeds of the additional bonds must be used only €or the purpose of providing additions, extensions or improvements to the System, or to refund obligations issued for such purpose. Section 10. Sale of Bonds. The sale of the Bonds to Griffin, Kubik, Stephens & Thompson, Inc., and associates, for the purchase price of $5,811,500 is ratified and confirmed; and the officers of the City are authorized and directed to do any and all acts necessary to conclude delivery of the Bonds to said purchaser, upon receipt of the purchase price, as soon after adoption of this Resolution as is convenient. Section 11. Application of Bond Proceeds. All accrued interest received from the sale of the Bonds shall be deposited into the Special Redemption Fund. Proceeds of the Bonds in an amount equal to the Reserve Requirement shall be deposited in the Reserve Account The balance of the proceeds, less the expenses incurred in authorizing, issuing and delivering the Bonds, shall be deposited into a special fund designated as the "Sewer System Improvement Fund" (the "Improvement Fund") Said special fund shall be adequately secured and shall be used solely for the purpose of meeting costs of adding to and improving the System, as more fully described in the preamble hereof. Any balance remaining in said Improvement Fund after paying said costs shall be transferred by the City Treasurer into the Special Redemption Fund for use in payment of principal of and interest on the Bonds. Section 12. Amendment to Resolution. After the issuance of anv of the Bonds, no chanqe or alteration of any kind in the ~~~~ provisions of this Resolution may be made until-all of the Bonds have been paid in full as to both principal and interest, or discharged as herein provided, except: a The City may, from time to time, amend this Resolution without the consent of any of the owners of the Bonds, but only - 12 - QB1\290668.1 to cure any ambiguity, administrative conflict, formal defect, or omission or procedural inconsistency of this Resolution; and the written consent of the owners of not less than two-thirds of the principal amount of the Bonds then outstanding, exclusive of Bonds held by the City; provided, however, that no amendment shall permit any change in the pledge of Revenues derived from the System, or in the maturity of any Bond issued hereunder, or a reduction in the rate of interest on any Bond, or in the amount of the principal obligation thereof, or in the amount of the redemption premium payable in the case of redemption thereof, or change the terms upon which the Bonds may be redeemed or make any other modification in the terms of the payment of such principal or interest without the written consent of the owner of each such Bond to which the change is applicable. b. This Resolution may be amended, in any respect, with Section 13. Defeasance. When all Bonds have been discharged, all pledges, covenants and other rights granted to the owners thereof by this Resolution shall cease. The City may discharge all Bonds due on any date by depositing into a special account on or before that date a sum sufficient to pay the same in full; or if any Bonds should not be paid when due, it may nevertheless be discharged by depositing into a special account a sum sufficient to pay it in full with interest accrued from the due date to the date of such deposit. The City, at its option, may also discharge all Bonds called for redemption on any date when they are prepayable according to their terms, by depositing into a special account on or before that date a sum sufficient to pay them in full, with the required redemption premium, if any, provided that notice of redemption has been duly given as required by this Resolution. The City, at its option, may also discharge all Bonds of said issue at any time by irrevocably depositing in escrow with a suitable bank or trust company a sum of cash and/or bonds or securities issued or guaranteed as to principal and interest of the U.S. Government, or of a commission, board or other instrumentality of the U.S. Government, maturing on the dates and bearing interest at the rates required to provide funds sufficient to pay when due the interest to accrue on each of said Bonds to its maturity or, at the City's option, if said Bond is prepayable to any prior date upon which it may be called for redemption, and to pay and redeem the principal amount of each such Bond at maturity, or at the City's option, if said Bond is prepayable, at its earliest redemption date, with the premium required for such redemption, if any, provided that notice of the redemption of all prepayable Bonds on such date has been duly given or provided for. 0 Section 14. Investments and Arbitrase. Monies accumulated in any of the funds and accounts referred to in Sections 4 and 11 hereof which are not immediately needed for the respective purposes thereof, may be invested in legal investments subject to the provisions of Sec 66.04(2), Wis Stats., until needed All income derived from such investments shall be regarded as Revenues of the System and shall be credited to the fund or account from which the investment was made: provided, however, QB1\290668,i - 13 - 0 0 a that at any time that the Reserve Requirement is on deposit in the Reserve Account, any income derived from investment of the Reserve Account shall be deposited into the Special Redemption Fund and used to pay principal and interest on the Bonds. A separate banking account is not required for each of the funds and accounts established under this Resolution; however, the monies in each fund or account shall be accounted for separately by the City and used only for the respective purposes thereof. The proceeds of the Bonds shall be used solely for the purposes for which they are issued but may be temporarily invested until needed in legal investments. No such investment shall be made in such a manner as would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code or the Regulations of the Commissioner of Internal Revenue thereunder. An officer of the City, charged with the responsibility for issuing the Bonds, shall, on the basis of the facts, estimates and circumstances in existence on the date of closing, make such certifications as are necessary to permit the conclusion that the Bonds are not "arbitrage bonds" under Section 148 of the Code or the Regulations of the Commissioner of Internal Revenue thereunder. Section 15. Resolution a Contract. The provisions of this Resolution shall constitute a contract between the City and the owner or owners of the Bonds, and after issuance of any of the Bonds no change or alteration of any kind in the provisions of this Resolution may be made, except as provided in Section 12, until all of the Bonds have been paid in full as to both principal and interest. The owner or owners of any of the Bonds shall have the right in addition to all other rights, by mandamus or other suit or action in any court of competent jurisdiction, to enforce such owner's or owners' rights against the City, the governing body thereof, and any and all officers and agents thereof including, but without limitation, the right to require the City, its governing body and any other authorized body, to fix and collect rates and charges fully adequate to carry out all of the provisions and agreements contained in this Resolution. Section 16. Utilization of The DeDOSitOrV Trust Comuanv Book-Entry-Only System. In order to make the Bonds eligible for the services Drovided bv The DeDositorv Trust Comuanv. New York. ~~~~ ~ ~ ~ New York ("DTC"), the C'lty agrees to the applicabie provisions set forth in the Blanket Issuer Letter of Representations previously executed on behalf of the City and on file in the City Clerk's office Section 17. Persons Treated as Owners; Transfer of Bonds. The City Clerk shall keep books for the registration and for the transfer of the Bonds. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and payment of either principal or interest on any Bond shall be made only to the registered owner thereof - 14 QE1\290668 1 All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid 0 Any Bond may be transferred by the registered owner thereof by surrender of the Bond at the office of the City Clerk, duly endorsed for the transfer or accompanied by an assignment duly executed by the registered owner or such owner‘s attorney duly authorized in writing. Upon such transfer, the Mayor and City Clerk shall execute and deliver in the name of the transferee or transferees a new Bond or Bonds of a like aggregate principal amount, series and maturity and shall record the name of each transferee in the registration book. No registration may be made to bearer. The City Clerk shall cancel any Bond surrendered for transfer. The City shall cooperate in any such transfer, and the Mayor and City Clerk are authorized to execute any new Bond or Bonds necessary to effectuate any such transfer. The fifteenth day of each calendar month next preceding each interest payment date shall be the record dates for the Bonds. Payment of interest on the Bonds on any interest payment date shall be made to the registered owners of the Bonds as they appear on the registration book of the City at the close of business on the corresponding record date. Section 18. ComDliance with Federal Tax Laws. The City represents and covenants that the projects financed by the Bonds and their ownership, management and use will not cause the Bonds to be “private activity bonds” within the meaning of Section 141 of the Code, and that the City shall comply with the provisions of the Code to the extent necessary to maintain the tax-exempt status of the interest on the Bonds including, if applicable, the rebate requirements of Section 148(f) of the Code. The City Clerk or other officer of the City charged with the responsibility of issuing the Bonds shall provide an appropriate certificate of the City certifying that the City can and covenanting that it will comply with the provisions of the Code and Regulations. 0 The City also covenants to use its best efforts to meet the requirements and restrictions of any different or additional federal legislation which may be made applicable to the Bonds, provided that in meeting such requirements the City will do so only to the extent consistent with the proceedings authorizing the Bonds and the laws of Wisconsin, and to the extent that there is a reasonable period of time in which to comply. Section 19. Desiqnation as Oualified Tax-ExemDt Obliqations. The Bonds are hereby designated as “qualified tax-exempt obligations” pursuant to Section 265 of the Code relating to the ability of financial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations. 0 - 15 - QBl\290668.1 Section 20. Official Statement. The Common Council hereby approves the Official Statement with respect to the Bonds including addenda submitted at this meeting and deems the Official Statement and addenda as "final" for purposes of SEC Rule 15~2-12. All actions taken by officers of the City in connection with the preparation of such Official Statement and addenda are hereby ratified and approved. In connection with the closing for the Bonds, the appropriate City official shall certify the Official Statement and addenda The City Clerk shall cause copies of the Official Statement and addenda to be distributed to the purchaser of the Bonds. Section 21. Undertakins to Provide Continuins Disclosure The City hereby covenants and agrees, for the benefit of the holders of the Bonds, to enter into a written undertaking (the "Undertaking") required by SEC Rule 15~2-12 promulgated by the Securities and Exchange Commission pursuant to the Securities and Exchange Act of 1934 (the "Rule") to provide continuing disclosure of certain financial information and operating data and timely notices of the occurrence of certain events in accordance with the Rule This Undertaking shall be enforceable by the holders of the Bonds or by the original purchaser of the Bonds on behalf of such holders (provided that the holders' and purchaser's right to enforce the provisions of this Undertaking shall be limited to a right to obtain specific enforcement of the obligations hereunder and any failure by the City to comply with the provision of this Undertaking shall not be an event of default with respect to the Bonds). The City Clerk, or other officer of the City charged with the responsibility for issuing the Bonds, shall provide a Continuing Disclosure Certificate for inclusion in the transcript of proceedings, setting forth the details and terms of the City's Undertaking. Section 22. Bond Insurance. The officers of the City are authorized to take all actions necessary to obtain municipal bond insurance with regard to the Bonds from Financial Security Assurance Inc. ("FSA"). The City shall send to FSA the City's annual financial statements and notice of any refunding or redemption of the Bonds. Further, the Mayor and City Clerk are authorized to agree to such additional provisions as FSA may reasonably request and which are acceptable to the Mayor and City Clerk including provisions regarding restrictions on investment of Bond proceeds, the payment procedure under the municipal bond insurance policy, the rights of FSA in the event of default and payment of the Bonds by FSA and notices to be given to FSA In addition, appropriate reference to the municipal bond insurance policy shall be made in the form of Bond provided herein. Section 23. Pavment of Issuance Expenses. The Cicy aurhorizes the ourchaser to forward che amount of Bond proceeds ~~~~~~~~~~~~ ~ ~ allocable to the payment of issuance expenses to Resource Bank & Trust Company, Minneapolis, Minnesota on the closing date for further distribution as directed by the City's financial advisor, Ehlers and Associates, Inc - 16 - OBi\290668.1 Section 24. Records. The City Clerk shall provide and keep a separate record book and shall record a full and correct statement of every step or proceeding had or taken in the course of authorizing and issuing the Bonds Section 25. Conflictins Ordinances or Resolutions. All ordinances, resolutions, or orders, or parts thereof heretofore enacted, adopted or entered, in conflict with the provisions of this Resolution, are hereby repealed and this Resolution shall be in effect from and after its passage Adopted, approved Mayor Attest: &K. m City lerk W Upon roll call vote, the following voted Aye: D’Acquisto, Misko, Patterson, Rasmussen, Salentine, Sanders and Suhr and the following voted No: None The Mayor thereupon declared the Resolution adopted and 0 approved. (Here occurred business not pertinent to the revenue bond issue. ) Upon motion made and seconded, the meeting was adjourned. - 17 - EXHIBIT A (Form of Bond) UNITED STATES OF AMERICA STATE OF WISCONSIN COUNTY OF WAUKESHA CITY OF MUSKEG0 SEWER SYSTEM REVENUE BOND Date of Number Rate Maturity Date Orisinal Issue Amount CUsIp R- March 1, 1996 $ KNOW ALL MEN BY THESE PRESENTS that the City of Muskego, Waukesha County, Wisconsin, hereby acknowledqes itself to owe and - for value received promises to pay to registered assigns, solely from the fund hereinafter specified, or the principal sum of ($ ) on the maturity date specified above together with interest thereon from March 1, 1996 or the most recent payment date to which interest has been paid, unless the date of registration of this Bond is after the 15th day of the calendar month immediately preceding an interest payment date, in which case interest will be paid from such interest payment date, at the rate per annum specified above, such interest being payable on the 1st days of March and September of each year, with the first interest on this issue being payable on September 1, 1996 DOLLARS 0 Bonds maturing in the years 2007 through 2016 are subject to redemption prior to maturity at the option of the City in whole or from time to time in part on September 1, 2006 or on any day thereafter at the price of par plus accrued interest to the date of redemption. The amounts and maturities of the Bonds to be redeemed shall be selected by the City. If less than the entire principal amount of any maturity is to be redeemed, the Bonds of that maturity which are to be redeemed shall be selected by lot. Bonds maturing in the year 2016 are also subject to mandatory redemption by lot as provided in the Resolution authorizing the Bonds at the redemption price of par plus accrued interest to the date of redemption and without premium. Notice of any call of the Bonds for redemption shall be given by the mailing of a notice thereof by registered or certified mail at least thirty (30) days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration books. Both principal hereof and interest hereon are hereby made payable to the registered owner in lawful money of the United States of America. The principal of this Bond shall be payable only upon presentation and surrender of this Bond at the office Q811290668.1 of the City Treasurer. or draft dated as of the applicable interest payment date and mailed from the office of the City Treasurer to the person in whose name this Bond is registered at the close of business on the fifteenth day of the calendar month next preceding each interest payment date. Interest hereon shall be payable by check This Bond is transferable only upon the books of the City kept for that purpose at the office of the City Clerk, by the registered owner in person or by such registered owner's duly authorized attorney, upon surrender of this Bond together with a written instrument of transfer (which may be endorsed hereon) satisfactory to the City Clerk duly executed by the registered owner or such registered owner's duly authorized attorney. Thereupon a new Bond or Bonds of the same aggregate principal amount, series and maturity shall be issued to the transferee in exchange therefor. The City may deem and treat 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 interest hereof and for all other purposes. The Bonds are issuable solely as negotiable, fully-registered Bonds without coupons in authorized denominations of $5,000 or any whole multiple thereof This Bond has been designated by the City as a "qualified tax-exempt obligation" for purposes of Section 265 of the Internal Revenue Code of 1986, as amended This Bond is one of an issue aggregating $5,900,000, issued for the purpose of paying the cost of constructing additions, improvements and extensions to the City's Sewer System, a public utility, pursuant to Article XI, Section 3, of the Wisconsin Constitution, Section 66 066, Wisconsin Statutes, acts supplementary thereto and a Resolution adopted February 27, 1996, and entitled: "A Resolution Authorizing the Issuance and Sale of $5,900,000 Sewer System Revenue Bonds of the City of Muskego, Waukesha County, Wisconsin, and Providing for the Payment of the Bonds and Other Details With Respect to the Bonds," and is payable only from the income and revenues derived from the operation of the City's Sewer System, which revenues have been set aside and pledged as a special fund for that purpose and identified as "Sewer System Special Redemption Fund," created by the Resolution referred to above This Bond does not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or provision. It is hereby certified, recited and declared that all acts, conditions and things required to exist, happen, and be performed precedent to and in the issuance of this Bond have existed, have happened and have been performed in due time, form and manner as required by law; and that sufficient of the income and revenue to be received by the City from the operation of its Sewer System has been pledged to and will be set aside into a special fund for the payment of the principal of and interest on this Bond. A- 2 p81\290668.1 IN WITNESS WHEREOF, the City of Muskego, Waukesha County, Wisconsin, has caused this Bond to be signed by its Mayor and City Clerk, and its corporate seal to be impressed hereon, all as of the date of original issue specified above (SEAL1 CITY OF MUSKEGO, WAUKESHA COUNTY, WISCONSIN BY Mayor BY City Clerk A- 3 Q81\290668 1 ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please print or typewrite name and address, including zip code, of Assignee) Please insert Social Security or other identifying number of Assignee the within Bond, and all rights thereunder, hereby irrevocably constituting and appointing Attorney to transfer said Bond on the books kept for the registration thereof with full power of substitution in the premises Dated NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever. Signature(s) guaranteed by: A-4 Q811290668.1 RESOLUTION 158-96 (Sewer System Revenue Bonds) Excerpts of Minutes of Open Meeting of the Common Council of the City of Muskego A duly-convened meeting of the Common Council of the City of Muskego, Waukesha County, Wisconsin, was held in open session on February 27, 1996 and called to order at PM, Central Time. The following Alderpersons were present: The following Alderpersons were absent The Mayor opened the meeting by announcing that this was an open meeting of the Common Council Notice of this meeting was given to the public at least 24 hours in advance of the meeting by forwarding the complete agenda to the official City newspaper, the Muskeqo Sun, and to all news media who have requested the same as well as posting. Copies of the complete agenda were available for inspection at the City Clerk's office Anyone desiring information as 'to forthcoming meetings should contact the City Clerk's office (Here occurred matters not pertinent to the revenue bond issue ) The City Clerk announced that __ bids had been received for the bond issue, which had been advertised for bids pursuant to action of the Common Council. The City Clerk indicated that a $118.000 good faith deposit was provided with respect to each such bid and read the following details as to each bid submitted: SEE ATTACHED QB1\290668.1 RESO. 58-96 (Sewer System Revenue Bonds) Excerpts of Minutes of Open Meeting of the Common Council of the City of Muskego A duly-convened meeting of the Common Council of the City of Muskego. Waukesha County, Wisconsin, was held in open session on February 27, 1996 and called to order at 8:19 P.M., Central Time The following Alderpersons were present: D'Acquisto, Misko, Patterson, Rasmussen, Salentine. Sanders and Suhr The following Alderpersons were absent: None The Mayor opened the meeting by announcing that this was an open meeting of the Common Council. Notice of this meeting was given to the public at least 24 hours in advance of the meeting by forwarding the complete agenda to the official City newspaper, the Muskeso Sun, and to all news media who have requested the same as well as posting. Copies of the complete agenda were available for inspection at the City Clerk's office. Anyone desiring information as to forthcoming meetings should contact the City Clerk's office. (Here occurred matters not pertinent to the revenue bond issue. ) The City clerk announced that six bids had been received for the bond issue, which had been advertised for bids pursuant to action of the Common Council. The City Clerk indicated that a $lla,ooo good faith deposit was provided with respect to each such bid and read the following details as to each bid submitted: SEE ATTACHED FEE 27 '96 83:39PM EHLERS 8 ASSOCIATE P. 217 BID TABULATION $5,900,000 Sewer System Revenue Bonds City of Muskego, Wisconsin SALE Februaly 27,1996 AWARD: GRIFFIN, KUBIK, STEPHENS 8 THOMPSON, INC. 0 - RATING: FSA Insured (Moodqs 'Aaa") - am: 5.48% NET TRUE COST RATE NAME OF BIDDER RATE YEAR PRICE INTEREST INTEREST GRIFFIN, KUBIK. STEPHENS 8 THOMPSON, INC. Chicago, Illinois DAlN BOSWORTH. INC. Chicago. Illinois NlKE SECURITIES, L.P. WILLIAM R. HOUGH 6 CO. RAYMOND JAMES &ASSOCIATES, ING. BETZOCD, BERG & NUSSBAUM. INC. J.C. BRADFORD &COMPANY. INC. Lisle. Illinois St Petersburg. Florlda Ilasta. Illinois Nashville, Tennessee SMITH BARNEY. INC. Chicago, Illinois PRUDENTIAL SECURITIES. INC. Chiigo. Illinois ABN AMRO SECURlTlES (USA), INC. Chlcago. llllnois DEAN WITER REYNOLDS. INC. Chicago, Illinois OPPENHEIMER & COMPANY, INC. New 'fork. New Yo& &EWEBBER. INC. hicago. lllinols 4.375% 4.50% 4.6W 4.70% 4.80% 4.90% 5.00% 5.10% 5.20% 5.25% 5.25% 4.60% 4.625% 4.70% 4.80% 5.00% 5.10% 5.125% 5.20% 5.25% 4.825% 4.75% 4.85% 4.90% 5.00% 5.125% 5.25% 4.60% 4.625% 4.80% 5.00% 5.10% 5.20% 5.25% 1997-1998 1999-2002 2603-2005 2006-2007 2008 2009 2010 2011 2012 2013 2014-2016 Term 1997-2000 2001 -2006 2007 2008 2009 2010 2011-2012 2013 2014-2016 1997-2000 2001-2007 2008 2009 201 0 201 1 2012-201 6 1997-2005 2006 2007 2008-2009 2010 2011 2012-2016 $581 1,500.00 $3,800.653.75 5.1590% $5,011.550.60 8,809,344.40 5.1739% $5,811.5W.00 53,833.508.13 5.2064% 'FSA iosurmce (Mood)ts 'Aa$ only) purchased by Griffin, Kubik, Slephens 8 Thompson, Inc. NO~W~ Crmcr 90 South Ssrenlh SimI Hmnn(lDDII1. NN ypOZ-41[0 (6121 3368291 FAY 16121 33- EhlerssndAsWatcs,lnc. PAGE. 02 LCADE~S in ruo~ic fbnancf 612 339 0854 FEE 27 '96 14.41 FEE 27 '96 03:33Pil EHLERS 8 FlSSOCIFiTES P. 3/7 55,900,000 Sewer System Revenue Bonds . City of Muskego, Wisconsin Page 0 NAME OF BIDDER RATE YEAR PRICE INTEREST INTEREST L NKT NET - COST RATE FIRST OF AMERICAN SECURITIES, INC. 4.30% Kakmazoo. Mlchigan 4.40% 4.50% 4.60% 4.70% 4.80% 4.90% 5.00% 5.10% 1997 95.01 1,500.00 $3,850.524.38 5.2215% 1998-2000 2001-2004 2005 2006 2007 2008 2009 2010 5.20% 2011 5.25% 2012-2013 5.375% 2014-2016 Term ROBERT W. BAIRD & COMPANY. INC PIPER JAFFRAY INC. BANC ONE CAPITAL CORPORATION CRONIN & COMPANY, INC. JOSEPHTHAL. LYON 6 ROSS. INC. Milwaukee. Wisconsin Minneapolis. Minnesota Milwaukee, Wisconsin Minneapolis. Minnesota New York. New York 3.75% 3.90% 4.00% 4.10% 4.20% 4.35% 4.45% 4.55% 4.65% 4.75% 4.90% 5.00% 5.10% 5.20% 5.30% 5.35% 5.40% 5.45% 5.50% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201 1 2012 201 3 201 4 2015201 6 %5.838.050.00 $3,877,003.75 5.231 9% FEB 27 '96 14:41 612 339 0854 PFIGE 03