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CCR2002061Alderperson The following resolution was then introduced and moved by and seconded by Alderperson RESOLUTION NO. 61-2002 $2,250,000 SEWER SYSTEM REVENUE BONDS, SERIES 2002 A RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF OF THE CITY OF MUSKEGO, WAUKESHA COUNTY, WISCONSIN, AND PROVIDING FOR THE PAYMENT OF THE BONDS AND OTHER DETAILS WITH RESPECT TO THE BONDS ("City") now owns and operates and has for many years owned and WHEREAS, the City of Muskego, Waukesha County, Wisconsin 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 nature comprising part of and used or useful in connection extensions thereto, all real and personal property of every and other intangibles, are hereinafter referred to as the therewith, and all appurtenances, contracts, leases, franchises "System") ; and of Wisconsin any city in the State of Wisconsin may, by action of WHEREAS, under the provisions of Chapter 66 of the Statutes 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, improvements to 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 be derived from the operation of the System, for the purpose of issue and sell revenue bonds payable solely from the revenues to authorized and issued pursuant to the provisions of Section financing the cost of such improvements, which bonds are to be 66.0621, Wis. Stats.; and Bonds dated March 1, 1996 (the "1996 Bonds") which were authorized by Resolution No. 58-96 adopted February 27, 1996 (the "1996 Resolution"), its Sewer System Revenue Bonds, dated February 1, 1998 (the "1998 Bonds") which were authorized by Resolution No. 15-98 adopted January 27, 1998 (the "1998 Resolution") and its Sewer System Revenue Bonds, dated January 1, 2000 (the ''t2000 Bonds") which were authorized by Resolution No. 1-2000 adopted January 11, 2000 (the "2000 Resolution") (hereinafter, the 1996 Bonds, the 1998 Bonds and the 2000 Bonds shall be referred to collectively as the "Prior Issues"); and WHEREAS, the City has outstanding its Sewer System Revenue -2- OBMKEIS215437.I 2000 Resolution permit the issuance of additional bonds on a conditions have been met; and WHEREAS, the 1996 Resolution, the 1998 Resolution and the parity with the Prior Issues under certain conditions, and those or obligations outstanding which are payable from the income and WHEREAS, other than the Prior Issues, the City has no bonds revenues of the System: and WHEREAS, the City has duly received bids for its proposed issue of $2,250,000 Sewer System Revenue Bonds, Series 2002 (the "Bonds") as described on the bid tabulation attached hereto as Exhibit A and incorporated herein by this reference (the "Bid Tabulation" ) ; and was that submitted by the bidder (the "Purchaser") whose bid is WHEREAS, it has been determined that the best bid received attached hereto as Exhibit B and incorporated herein by this reference (the 'tProposal") ; NOW, THEREFORE, the Common Council of the City of Muskego, Waukesha County, Wisconsin, do resolve that: providing for the cost of improvements to the System, the City Section 1. Authorization of Bonds. For the purpose of shall borrow on the credit of the income and revenue of the of the City, in the denomination of $5,000, or any whole multiple System the sum of $2,250,000. Negotiable, fully-registered bonds thereof, shall be issued in evidence thereof. The Bonds shall be designated "Sewer System Revenue Bonds, Series 2002tr, shall be numbered from R-l upward and shall be dated April 1, 2002. The Bonds shall bear interest at the rates per annum set forth in the years and principal amounts set forth in the Proposal and the Proposal and shall mature on September 1 of each year, in the debt service schedule attached hereto as Exhibit C and incorporated herein by this reference (the "Schedule") . Interest on the Bonds shall be payable on March 1 and September 1 of each year, commencing September 1, 2002. Interest shall be computed upon the basis of a 360-day year of twelve 30- Municipal Securities Rulemaking Board. day months and will be rounded pursuant to the rules of the subject to redemption prior to maturity at the option of the City Bonds maturing in the years 2011 through 2019 shall be in whole or from time to time in part on September 1, 2010 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 entire principal amount of any maturity is to be redeemed, the to be redeemed shall be selected by the City. If less than the Bonds of that maturity which are to be redeemed shall be selected -3- 0 amount of annual debt service payments is reasonable in The schedule of maturities is found to be such that the 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 manual), and sealed with the corporate seal of the City, or a authenticate the Bonds, at least one of such signatures shall be facsimile thereof. The Bonds, together with interest thereon, shall be payable only out of the Special Redemption Fund hereinafter provided, and Special Redemption Fund and the revenues pledged to such Fund, shall be a valid claim cjf the owner thereof only against the 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 Prior Issues, 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 D attached hereto and incorporated herein by this reference. elsewhere in this Resolution, the following words shall have the following meanings unless the context or use indicates another or Section 3. Definitions. In addition to the words defined different meaning or intent : "Annual Debt Service Requirement" means the total amount of principal and interest due on the Prior Issues, the Bonds and Parity Bonds in any Bond Year. payment date for the Bonds. "Bond Year" means the one-year period ending on a principal "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 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 0 or income derived from investments. -4- QBMKnS215437.1 and necessary costs of operating, maintaining, administering and materials and supplies, insurance and audits, but excluding repairing the System, including salaries, wages, costs Of depreciation, debt service, tax equivalents and capital expenditures. "Operation and Maintenance Expenses" means the reasonable "Parity Bonds" means additional bonds issued on a parity as to pledge and lien with the Prior Issues and the Bonds in accordance with the provisions of Section 9 of this Resolution. "Reserve Requirement" means the least of (a) the amount on deposit in the Reserve Account prior to the issuance of the Bonds plus 10% of the proceeds of the Bonds, (b) the highest annual principal and interest requirement on the Prior Issues and the Bonds, or (c) 125% of the average annual debt service on the Prior Issues and 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 148(d) (1) of the Code, but shall not exceed the maximum Bonds and the Parity Bonds in any Bond Year. amount of principal and interest due on the Prior Issues, the "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. 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 were created by the 1996 Resolution, and are hereby continued, and shall be used and applied as described below: Section 4. Income and Revenue Funds: Flow of Funds. When - 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") . the interest on the Prior Issues, the Bonds and Parity Bonds and to meet the Reserve Requirement shall be set aside into the Fund"), to be applled to the payment of the principal of and "Sewer System Special Redemption Fund" (the "Special Redemption interest on the Prior Issues, the Bonds and Parity Bonds and to meet reserve requirements. The monies standing in the Special principal of and interest on the Prior Issues, the Bonds and Redemption Fund are hereby irrevocably pledged to the payment of - Revenues in amounts sufficient to pay the principal of and 0 Parity Bonds. -5- QBMKE\5215437.1 adequate depreciation account for the System shall be set aside into the "Sewer System Depreciation Fund" (the "Depreciation Fund") . - Revenues in amounts sufficient to provide a proper and 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 66.0603(1m), Wis. Stats. The Operation and Maintenance Fund and the Depreciation Fund Money in the 0perat.ion and Maintenance Fund shall be used to money not required for Operation and Maintenance Expenses shall pay Operation and Maintenance Expenses as the same come due; be used first to remedy any deficiency in the Special Redemption Maintenance Fund equal to estimated Operation and Maintenance Fund and next to accumulate a reserve in the Operation and Expenses for one month. Any money then available and remaining Surplus Fund, which was created by the 1996 Resolution, and is in the Operation and Maintenance Fund may be transferred to the hereby continued. Money in the Depreciation Fund shall be available and shall be used, whenever necessary, to restore any deficiency in the Account therein. When the Special Redemption Fund is sufficient Special Redemption Fund and for the maintenance of the Reserve for its purposes, funds in the Depreciation Fund may be expended for repairs, replacements, r,ew construction, extensions or Depreciation Fund in excess of $228,275 (or such higher amount as additions to the System. Any money on deposit in the 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. Council that the amount of Revenues to be set aside and paid into It is the express intent and determination of the Common the Special Redemption Fclnd (including the Reserve Account) shall in any event be sufficient to pay principal of and interest on the Prior Issues, the Gonds 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 Prior Issues, the Bonds and Parity Bonds and to meet the Reserve Requirement. The Revenues so set aside for payment of the principal of and interest on the Prior Issues and the Bonds and to meet the Reserve Requirement 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. -6- QBhtKEi5215437.I The minimum amounts to be so deposited to meet the debt service payments due on the Bonds, in addition to the amounts to be deposited to meet debt service payments on the Prior Issues, are set forth on the Schedule. other than the payment of interest upon and principal of the The Special Redemption Fund shall be used for no purpose prior Issues, 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 66.0603(1m), 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 Prior Issues, the Bonds and Parity Bonds, the separate account in the Special Redemption Fund known as the Resolution, and continued by the 1998 Resolution and 2000 "Reserve Account" (the "Reserve Account") created by the 1996 Resolution, is hereby further continued 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 Reserve Account equal to the Reserve Requirement. The City such amount as is necessary to make the amount on deposit on the Reserve Account shall be less than the Reserve Requirement, those covenants and agrees that at any time that the amount in the 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 Prior Issues, the Bonds or Parity Bonds, then all sums then held in the Reserve Account shall be used to pay the portion of Bonds becoming due as to which there would otherwise be default, interest or principal on the Prior Issues, the Bonds or Parity be made into the Reserve Account until an amount equal to the and thereupon the payments required by this paragraph shall again Reserve Requirement is on deposit in the Reserve Account. 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 money then remaining in the Surplus Fund at the end of any Fiscal including the Reserve Account, and the Depreciation Fund. Any Year may be used only as permitted and in the order specified in Section 66.0811(2), Wis. Stats. Money thereafter remaining in the Surplus Fund may be transferred to any of the funds or accounts provided for in this section. -1- QBMKE\S215437.1 of any service rendered to the City by the System, including Section 5. Service to City. The reasonable cost and value 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 the maximum Annual Debt Service Requirement 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 into the separate and special funds described in Section 4 of to the City shall, in the manner provided hereinabove, be paid this Resolution. However, such payment out of the tax levy shall be subject to: (a) approval of the Public Service Commission, or appropriations therefor and (c) applicable levy limitations, if successors to its functions, if necessary, (b) yearly any: and neither this Resolution nor such payment shall be construed as constituting an obligation of the City to make any of services rendered to the City and its inhabitants or to make such appropriation over and above the reasonable cost and value any subsequent payment over and above such reasonable cost and 0 value. Section 6. Operation of System: City Covenants. It is Bonds, and each of them, that: covenanted and agreed by the City with the owner or owners of the It will faithfully and punctually perfom 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 System and apply them to the respective funds described rendered by the System, and will segregate the Revenues of the hereinabove; System, including any part thereof or any additions or extensions It will not sell, lease, or in any manner dispose of the 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 -8- QBMKE\5215437.1 assessments, governmental charges, and claims for labor, It will pay or cause to be paid all lawful taxes, materials or supplies which if unpaid could become a lien upon the System or its Revenues or could impair the security of the Bonds ; It will cause the improvements to the System to be made as expeditiously as possible; It will maintain in reasonably good condition and operate established rates and charges for the service rendered by the the System, and will establish, charge and collect such lawfully 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 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. It will prepare a budget not less than sixty days prior to keeD DroDer books and accounts relative to the Svstem seDarate Section 7. Books and Accounts: Inspection. The City will from 'all* other records of the City and will causg such bboks and accounts to be audited annually by a recognized independent firm profit and loss statemert of the System as certified by such of certified public accountants including a balance sheet and a may be thought proper by the accountants to be included therein accountants. Each such audit, in addition to whatever matters shall include the following: (11 a statement in detail of the balance sheet as of the end of such Fiscal Year; (3) the income and expenditures of the System for the Fiscal Year; (2) a 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 of the policy, the risks covered, the name of the insurer, and end of the Fiscal Year setting out as to each policy the amount used in computing the sewer service charge. the expiration date of the policy; and (6) the volume of water -9- QBMKE\S215437.1 times the right to inspect the System and the records, accounts The owners of any of the Bonds shall have at all reasonable 0 and data of the City relating thereto. Section 8. Insurance. So long as any of the Prior Issues or the Bonds are outstanding the City will carry for the benefit of the owners of the Prior Issues and 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 occupancy resulting from such casualties; (c) adequate public casualties; (b) adequate insurance against loss of use and liability insurance and (dl 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 uavments shall not reduce the amounts otherwise remired to L e be pLidL into the Special Red.emption Fund. Section 9. Additional Bonds. The Bonds are being issued on a Daritv with the Prior Issues. No bonds or obliaations Davable ou't of the Revenues of the System may be issued i< such manner as to enjoy priority over the Bonds. Additional obligations may be of the Prior Issues and the Bonds. Additional obligations may be issued if their lien and pledge is junior and subordinate to that pledge of revenues of and the lien on the System ("Parity Bonds") issued on a parity with the Prior Issues and the Bonds as to the only if all of the following conditions are met: " (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 payable from the Revenues of the System and on the bonds then to interest and principal requirements on all bonds outstanding 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 -10- QBh3U\5215437.1 purposes of such computation shall include such additional Revenues as an independent certified public accountant, Commission may certify would have accrued during the prior Fiscal consulting professional engineer or the Wisconsin Public Service 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 Account, but not the Surplus Fund) must have been made in full. enumerated in Section 4 of this Resolution (including the Reserve September 1 of each year and interest falling due on March 1 and September 1 of each year. (3) The additional bonds must have principal maturing on (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 for 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 bid of the Purchaser for the purchase price set forth in the Proposal be and it hereby is accepted and the Mayor and City Clerk are authorized and directed to execute an acceptance of the offer of said successful bidder on behalf of the City. The good faith deposit of the Purchaser bond issue, and any good faith deposits submitted by unsuccessful shall be retained by the City Treasurer until the closing of the bidders shall be promptly returned. 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 Account equal to the Reserve Requirement shall be deposited in amount necessary to make tne amount on deposit in the Reserve the Reserve Account. The balance of the proceeds, less the Bonds, shall be deposited into a special fund designated as the expenses incurred in authorizing, issuing and delivering the special fund shall be adequately secured and shall be used solely "Sewer System Improvement Fund" (the "Improvement Fund"). Said for the purpose of meeting costs of adding to and improving the balance remaining in said Improvement Fund after paying said System, as more fully described in the preamble hereof. Any costs shall be transferred by the City Treasurer into the Special on the Bonds. Redemption Fund for use in payment of principal of and interest -11- QBMRe\SZIM37.1 any of the Bonds, no change 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: Section 12. Amendment to Resolution. After the issuance of a. The City may, from time to time, amend this Resolution without the consent of any of the owners of the Bonds, but only omission or procedural inconsistency of this Resolution; and to cure any ambiguity, administrative conflict, formal defect, or b. This Resolution may be amended, in any respect, with the written consent of the owners of not less than two-thirds of Bonds held by the City; provided, however, that no amendment the principal amount of the Bonds then outstanding, exclusive of shall permit any change in the pledge of Revenues derived from the System, or in the maturity of any Bond issued hereunder, or a of the principal obligation thereof, or in the amount of the reduction in the rate of interest on any Bond, or in the amount 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. Section 13. Defeasance. When all Bonds have been discharged, all pledges, covenants and other rights granted to 0 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 may also discharge all Bonds called for redemption on any date due date to the date of such deposit. The City, at its option, when they are prepayable according to their terms, by depositing pay them in full, with the required redemption premium, if any, into a special account oil or before that date a sum sufficient to provided that notice of redemption has been duly given as discharge all Bonds of said issue at any time by irrevocably required by this Resolution. The City, at its option, may also 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 if any, provided that notice of the redemption of all prepayable Bonds on such date has been duly given or provided for. redemption date, with the premium required for such redemption, -12- QBMKE\J215437.1 i in anv of the funds and accounts referred to in Sections 4 and 11 Section 14. Investments and Arbitrase. Monies accumulated w hereoi which are not immediately needed for the respective ~~~ .~~~ ~ ~ ~ purposes thereof, may be invested in legal investments subject to All income derived from such investments shall be regarded as the provisions of Sec. 66.0603(1m), Wis. Stats., until needed. Revenues of the System and shall be credited to the fund or account from which the investment was made: provided, however, that at any time that the Reserve Requirement is on deposit in Reserve Account shall be deposited into the Special Redemption the Reserve Account, any income derived from investment of the Fund and used to pay principal and interest on the Bonds. A and accounts established under this Resolution: however, the separate banking account is not required for each of the funds 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 needed in legal investments. No such investment shall be made in for which they are issued but may be temporarily invested until 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 (the "Regulations"). An officer of the City, charged with the responsibility for and circumstances in existence on the date of closing, make such issuing the Bonds, shall, on the basis of the facts, estimates Bonds are not "arbitrage bonds" under Section 148 of the Code or the Regulations. 0 certifications as are necessary to permit the conclusion that the Resolution shall constitute a contract between the City and the Section 15. Resolution a Contract. The provisions of this ~ 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 until all of the Bonds have been paid in full as to both this Resolution may be made, except as provided in Section 12, 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. Book-Entrv-Only System. In order to make the Bonds eligible for the services provided by The Depository Trust Company, New York, Section 16. Utilization of The DeDository Trust ComDany New York (ItDTC"), the City agrees to the applicable 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. The City Clerk shall keep books for the registration and for the Section 17. Persons Treated as Owners: Transfer of Bonds. 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. 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. 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. Any Bond may be transferred by the registered owner thereof The City shall cooperate in any such transfer, and the Mayor 0 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 Payment of interest on the Bonds on any interest payment date interest payment date shall be the record dates for the Bonds. 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. Comuliance with Federal Tax Laws. (a) The Bonds and their ownership, management and use will not cause the City represents and covenants that the projects financed by the Bonds to be “private activity bonds” within the meaning of Section 141 of the Code. The City further covenants that it shall comply with the provisions of the Code to the extent necessary to maintain the tax-exempt status of the interest on Section 148 (f) of the Code. The City further covenants that it the Bonds including, if applicable, the rebate requirements of will not take any action, omit to take any action or permit the taking or omission of any action within its control (including, without limitation, making or permitting any use of the proceeds of the Bonds) if taking, permitting or omitting to take such private activity bond within the meaning of the Code or would action would cause any of the Bonds to be an arbitrage bond or a otherwise cause interest on the Bonds to be included in the gross income of the recipients thereof for federal income tax purposes. 0 The City Clerk or other officer of the City charged with the -14- QBMKE\5215437.1 certificate of the City certifying that the City can and responsibility of issuing the Bonds shall provide an appropriate covenanting that it will comply with the provisions of the Code and Regulations. (b) 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. The foregoing covenants shall remain in full force and effect, notwithstanding the defeasance of the Bonds, until the date on which all of the Bonds have been paid in full. Section 19. Desisnation as Oualified Tax-Exempt Oblisations. The Bonds are hereby designated as "qualified relating to the ability of financial institutions to deduct from tax-exempt obligations" pursuant to Section 265 of the Code allocable to carrying and acquiring tax-exempt obligations. income for federal income tax purposes, interest expense that is 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 Rule 15~2-12. All actions taken by officers of the City in addenda are hereby ratified and approved. In connection with the connection with the preparation of such Official Statement and closing for the Bonds, the appropriate City official shall certify the Official Statement and addenda. The City Clerk shall distributed to the purchaser of the Bonds. cause copies of the Official Statement and addenda to be Official Statement and addenda as "final" for purposes of SEC The City hereby covenants and aqrees. for the benefit of the Section 21. Undertakinq to Provide Continuinq Disclosure. holders-of the-Bonds, to enter into a written undertaking (the "Undertaking") required by SEC Rule 15~2-12 promulgated by the Exchange Act of 1934 (the "Rule") to provide continuing Securities and Exchange Commission pursuant to the Securities and disclosure of certain financial information and operating data and timely notices of the occurrence of certain events in by the holders of the Bonds or by the original purchaser of the accordance with the Rule. This Undertaking shall be enforceable Bonds on behalf of such holders (provided that the holders' and purchaser's right to enforce the provisions of this Undertaking obligations hereunder and any failure by the City to comply with shall be limited to a right to obtain specific enforcement of the the provision of this Undertakinq shall not be an event of a defaht with respect to the Bonds). -15- QBMRmS215437.1 the responsibility for issuing the Bonds, shall provide a The City Clerk, or other officer of the City charged with 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. If the purchaser of the Bonds Bonds, the officers of the City are authorized to take all determines to obtain municipal bond insurance with respect to the actions necessary to obtain such municipal bond insurance. The Mayor and City Clerk are authorized to agree to such additional provisions as the bond insurer 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 the bond insurer in the event of default and payment of the Bonds by the bond insurer and notices to be given to the bond bond insurance policy shall be made in the form of Bond provided insurer. In addition, a.ppropriate reference to the municipal herein. Section 23. Payment of Issuance Emenses. The City authorizes the purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses to U.S. Trust Company, Minneapolis, Minnesota on the closing date for further distribution as directed by the City's financial advisor, Ehlers a and Associates, Inc - Section 24. Records. The City Clerk shall provide and keep a separate record book and shall record a full and correct of authorizing and issuing the Bonds. statement of every step or proceeding had or taken in the course -16- ordinances, resolutions (other than the 1996 Resolution, the 1998 Section 25. Conflictins Ordinances or Resolutions. All Resolution and the 2000 Resolution), or orders, or parts thereof provisions of this Resolution, are hereby repealed and this heretofore enacted, adopted or entered, in conflict with the Resolution shall be in effect from and after its passage. In and the 1996 Resolution, the 1998 Resolution or the 2000 case of any conflict between the provisions of this Resolution Resolution, the terms of the 1996 Resolution, the 1998 Resolution or the 2000 Resolution shall prevail so long as any 1996 Bonds, 1998 Bonds or 2000 Bonds are outstanding. Adopted, approved and recorded March 26, 2002. Attest: Mayor City Clerk Upon roll call vote, the following voted Aye: e and the following voted No: approved. The Mayor thereupon declared the Resolution adopted and (Here occurred business not pertinent to the revenue bond issue. ) Upon motion made and seconded, the meeting was adjourned. City Clerk -17-