HomeMy WebLinkAbout2003-14 Water Revenue BondsA RESOLUTION OF CITY OF ASHLAND, JACKSON COUNTY,
OREGON, AUTHORIZING THE ISSUANCE OF WATER REVENUE
BONDS AND A MASTER WATER REVENUE BOND DECLARATION.
BE IT RESOLVED by the City Council (the "Council") of the City of Ashland (the "City") that:
Section 1. Findings
The Council finds as follows:
1.1 The City adopted Resolution No. 2003-04, authorizing the City to issue up to $3,500,000
of revenue bonds under the Uniform Revenue Bond Act to finance improvements, property
acquisition and other public purposes related to the water system, including a transmission line, a
distribution line, a fire flow distribution, a reservoir, and a water treatment plant and to pay all
cost incidental thereto (the "Projects"). The City published notice as required by law. More than
60 days have passed since that notice was published, and no petitions were filed to refer that
resolution. The City is now authorized to issue the bonds described in that resolution.
1.2 The City now desires to issue revenue bonds to finance the Projects as described in City
Resolution No. 2003-04.
1.3 The City adopts this resolution to authorize the issuance of up to $3,500,000 of water
revenue bonds pursuant to City Resolution No. 2003-04, and to provide the terms under which
future parity obligations may be issued.
1.4 The City previously issued its Water Revenue Bonds, Series 1994 (the "Series 1994
Bonds"). The City may obtain debt service savings by refunding all or a portion of the Series
1994 Bonds.
Section 2. Bonds Authorized
2.1
The City hereby authorizes the sale and delivery of its Water Revenue Bonds, Series
2003 (the "Series 2003 Bonds") in accordance with this Resolution and the Master Water
Revenue Bond Declaration authorized by Section 2.3(v) of this Resolution and attached
(the "Master Declaration") to finance the Projects and refund all or any portion of the
Series 1994 Bonds. The aggregate principal amount of the Series 2003 Bonds shall not
exceed Three Million Five Hundred Thousand Dollars ($3,500,000), plus an amount
sufficient to refund all or any portion of the City's Series 1994 Bonds.
2.2
The Series 2003 Bonds and any obligations issued on a parity with the Series 2003 Bonds
shall be special obligations of the City that are payable solely from the revenues of the
City's water system and related amounts that are pledged as provided in the Master
Declaration.
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2.3
The Finance Director or the City Administrator or the person designated by the Finance
Director or the City Administrator to act on behalf of the City under this Resolution (any
of whom is referred to in this resolution as a "City Official") may, on behalf of the City:
(i)
Participate in the preparation of, authorize the distribution of, and deem
final the preliminary and final official statements and any other disclosure
documents for the Series 2003 Bonds.
(ii)
Establish the final principal amounts, maturity schedules, interest rates,
sale prices, redemption terms, payment terms and dates, record dates and
other terms for the Series 2003 Bonds, and either publish a notice of sale,
receive bids and award the sale of that series to the bidder complying with
the notice and offering the most favorable terms to the City, or select one
or more underwriters and negotiate the sale of that series with those
underwriters.
(iii)
Undertake to provide continuing disclosure for the Series 2003 Bonds in
accordance with Rule 15c2-12 of the United States Securities and
Exchange Commission.
(iv)
Apply for and purchase municipal bond insurance, reserve sureties or
other forms of credit enhancements for the Series 2003 Bonds, and enter
into related agreements..
(v)
Finalize the terms of, execute and deliver the Master Declaration, which
pledges the water system revenues, contains covenants regarding the
levels of water system fees and charges that the City must impose,
describes the terms of the Series 2003 Bonds, and the terms under which
future obligations may be issued on a parity with the Series 2003 Bonds.
The Master Declaration shall be in substantially the form attached to this
Resolution as Exhibit A, but with such changes as the City Official may
approve.
(vi)
Appoint and enter into agreements with escrow agents, paying agents,
verification agents and other professionals and service providers.
(vii) Take any action desirable to call, redeem and pay any bonds that are
refunded with the Series 2003 Bonds.
(viii)
Enter into covenants to maintain the excludability of Series 2003 Bond
interest from gross income under the Internal Revenue Code of 1986, as
amended (the "Code").
(ix)
Designate the Series 2003 Bonds as qualified tax-exempt obligations
pursuant to Section 265(b)(3) of the Code.
(x) Execute any documents and take any other action in connection with the
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Series 2003 Bonds which the City Official finds will be advantageous to
the City.
This resolution was read by title only in accordance with Ashland Municipal Code
§2.04.090 duly PASSED and ADOPTED this 6th day of May, 2003.
~ ~City
~3arbara Christensen
Recorder
SIGNED and APPROVED this 6th day of May, 2003.
Reviewed as to form:
Paul Nolte
Mayor
Alan W. DeBoer
, City Attorney
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Exhibit A
Master Water Revenue Bond Declaration
City of Ashland
Jackson County, Oregon
Water Revenue Bonds
Series 2003
Executed by the~ ~'R~~
of the City of Ashland, Oregon
As of this ~, day of ~ , 2003
Section 1.
Section 2.
Section 3.
Section 4.
Section 5.
Section 6.
Section 7.
Section 8.
Section 9.
Section 10.
Section 11.
Section 12.
Section 13.
Section 14.
Section 15.
Table of contents
Findings.
Definitions.
Deposit, Pledge and Use of Revenues.
Funds and Accounts.
Rate Covenant.
General Covenants.
Parity Obligations.
Subordinate Obligations.
Separate Utility System
Default and Remedies on Default.
No Remedy Exclusive.
Trustee Duties Upon Default.
Amendment of Declaration.
Defeasance.
The Series 2003 Bonds
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11
11
11
12
13
13
14
Appendix A Bond Form - Book-Entry-Only
Table of Contents to Bond Resolution
MASTER WATER REVENUE BOND DECLARATION
THIS MASTER WATER REVENUE BOND DECLARATION is executed as of
3/~//0 $ by the ~ of the City of Ashland, Oregon pursuant to authority granted to the
m by City Resolution No.2oo~l~[to establish the terms under which the City's Water Revenue
Bonds, Series 2003 and future water revenue bonds may be issued.
Section 1. Findings.
The City finds:
1.1. The City adopted Resolution No. 2003-04 authorizing the City to issue up to $3,500,000
of revenue bonds under the Uniform Revenue Bond Act (the "Act"). The City published notice
as required by the Act. More than 60 days have passed since that notice was published, and no
petitions were filed to refer that resolution. The City is now authorized to issue bonds described
in that resolution.
1.2. The City adopted Resolution No. g00~4~on 5/6/t}~, ~003, authorizing this declaration
and the issuance of up to $3,500,000 of revenue bonds pursuant to Resolution No. 2003-04, plus
an amount necessary to refund the City's outstanding Water Revenue Bonds, Series 1994. This
declaration establishes the terms under which the City may issue water revenue bonds and also
describes the terms under which the City's Water Revenue Bonds, Series 2003 are issued.
Section 2. Definitions.
As used in this Master Declaration, the following words shall have the following meanings:
"Annual Debt Service" means the amount required in a Fiscal Year to pay scheduled debt service
on Outstanding Bonds, calculated as follows:
(i) Interest which is to be paid from proceeds of Bonds shall be subtracted.
(ii) City Payments to be made in the Fiscal Year under a Parity Exchange Agreement
shall increase Annual Debt Service, and Reciprocal Payments to be received in the Fiscal Year
under a Parity Exchange Agreement shall reduce Annual Debt Service.
(iii) Bonds which are subject to scheduled, noncontingent redemption or tender shall be
deemed to mature on the dates and in the amounts which are subject to mandatory redemption or
tender, and only the amount scheduled to be Outstanding on the final maturity date shall be
treated as maturing on that date.
(iv) Bonds which are subject to contingent redemption or tender shall be treated as
maturing on their stated maturity dates.
"Audit" means the audit required by ORS 297.425.
"Auditor" means a person authorized by the State Council of Accountancy to conduct municipal
audits pursuant to ORS 297.670.
"Bond Purchaser" means the initial purchaser of a Series of Bonds.
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"Bonds" means the Series 2003 Bonds and any Parity Obligations issued pursuant to the Section
7 of this Master Declaration.
"Certificate of City" or "City Certificate" means a certificate executed on behalf of the City by a
City Official.
"City" means the City of Ashland, Jackson County, Oregon.
"City Official" means the Finance Director or the City Administrator or the person designated by
the Finance Director or the City Administrator to act on behalf of the City under this Master
Declaration.
"City Payment" means any scheduled payment required to be made by or on behalf of the City
under a Exchange Agreement which is either fixed in amount or is determined according to a
formula set forth in the Exchange Agreement.
"Code" means the Internal Revenue Code of 1986, rules and regulations promulgated thereunder
and amendments thereto.
"Default" or "Event of Default" means any event specified in Section 10.1 of this Master
Declaration.
"Exchange Agreement" means a swap, cap, floor, collar or similar transaction which includes a
written contract between the City and a Reciprocal Payor under which the City is obligated to
make one or more of the City Payments in exchange for the Reciprocal Payor's obligation to pay
one or more Reciprocal Payments, and which provides that:
(a) the Reciprocal Payments are to be deposited directly into the Revenue Debt Account;
and,
(b) the City is not required to fulfill its obligations under the contract if: (i) the Reciprocal
Payor fails to make any Reciprocal Payment; or (ii) the Reciprocal Payor fails to comply with its
financial status covenants.
"Fiscal Year" means the period beginning on July 1 of each year and ending on the next
succeeding June 30, or as otherwise defined by Oregon Law.
"Gross Revenues" means all fees and charges resulting from operation of the Water System,
including systems development charges, revenues from product sales, and any interest earnings
and other revenues required to be placed in the Water Fund under this Master Declaration;
however, Gross Revenues does not include:
(i) any payments of improvement assessments levied against benefited properties;
(ii) the proceeds of any grants;
(iii) the proceeds of any borrowing for capital improvements;
(iv) the proceeds of any liability or other insurance;
(v) the proceeds of any casualty insurance which the City intends to utilize for repair or
replacement of the Water System;
(vi) sales of assets pursuant to Section 6.7 of this Master Declaration;
(vii) meter and service installation charges; and
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(viii) ad valorem taxes received by the City which are, at any time, pledged, designated or
dedicated to other debt or obligations of the City.
"Master Declaration" means this Master Water Revenue Bond Declaration.
"Maximum Annual Debt Service" means the greatest Annual Debt Service, calculated on all
Bonds which are Outstanding on the date of calculation.
"Net Operating Revenues" means the Gross Revenues less the Operating Expenses, plus any
withdrawals from the Rate Stabilization Account and minus any deposits to the Rate
Stabilization Account.
"Operating Expenses" means all expenses incurred for operation, maintenance and repair of the
Water System, including but not limited to administrative expenses, financial and auditing
expenses, insurance premiums, claims (to the extent moneys are not available from proceeds of
insurance), taxes, legal and engineering expenses relating to operation and maintenance,
payments and reserves for pension, retirement, health, hospitalization, and sick leave benefits,
and any other similar expenses to be paid to the extent properly and directly attributable to
operations of the Water System. Operating Expenses do not include:
(i) any rebates paid from Gross Revenues under Section 148 of the Code.
(ii) payments for the settlement of litigation and payments to any liability reserve fund;
(iii) depreciation or amortization of property, values, or losses, and all amounts treated for
accounting purposes as payments for capital expenditures;
(iv) payments of debt service (including amounts treated for accounting purposes as debt service
payments); and
(v) capital transfers and capital outlays including without limitation transfers to capital
construction accounts.
"ORS" means the Oregon Revised Statutes.
"Outstanding" refers to all Bonds except Bonds that have been paid or defeased pursuant to
Section 14 of this Master Declaration.
"Owner" means a registered owner of a Bond.
"Parity Exchange Agreement" means an Exchange Agreement which qualifies as a Parity
Obligation in accordance with Section 7.
"Parity Obligations" means any revenue bonds or other obligations of the City which are issued
in compliance with the provisions of Section 7 of this Master Declaration, and includes Parity
Exchange Agreement.
"Permitted Investments" means those investments authorized by Oregon Law for the City.
"Rate Stabilization Account" means the Rate Stabilization Account established pursuant to
Section 4.3 of this Master Declaration.
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"Rating Agency" means Fitch, Moody's, S&P, or any other nationally recognized financial rating
Agency which has rated Outstanding Bonds or a Credit Facility at the request of the City.
"Reciprocal Payment" means scheduled payment to be made to, or for the benefit o:f, the City
under a Exchange Agreement by or on behalf of the Reciprocal Payor, which is either fixed in
amount or is determined according to a formula set forth in the Exchange Agreement.
"Reciprocal Payor" means a party to an Exchange Agreement (other than the City) that is
obligated to make one or more Reciprocal Payments thereunder, and which has at least an
investment grade rating from a Rating Agency for its obligations under the Exchange
Agreement.
"Record Date" means the fifteenth (15th) day of the month preceding each interest payment date.
"Required Reserve" means an amount equal to the Maximum Annual Debt Service on all
Outstanding Bonds or the amount described in the next sentence. If at the time of issuance of a
Series of Bonds, the amounts required to be added to the Reserve Account to make the balance
in the Reserve Account equal to Maximum Annual Debt Service on all Outstanding Bonds
exceeds the Tax Maximum calculated with respect to such Series of Bonds, then the Reserve
Requirement shall mean the Reserve Requirement in effect immediately prior to the issuance of
that Series of Bonds, plus the Tax Maximum calculated with respect to that Series of Bonds.
"Reserve Account" means the Reserve Account established pursuant to Section 4 of this Master
Declaration.
"Reserve Equivalent" means an insurance policy or letter of credit issued by a municipal bond
insurance company or a commercial bank having a credit rating (when the policy or letter of
credit is issued) of at least Aa or AA as determined by Moody's Investors Services or Standard &
Poor's Corporation, or their successors, in which the insurance company or commercial bank
agrees to unconditionally provide the City with funds in an amount which, when combined with
available bond proceeds or other available funds, that have been previously deposited into the
Reserve Account, equals the Required Reserve.
"Revenue Debt Account" means the Revenue Debt Account to be created and maintained in the
Water Fund pursuant to Section 4 hereof to hold funds to be used to pay Bond principal and
interest and premiums if any.
"Separate Utility System" means any utility property which is declared by the City Council to
constitute a system which is distinct from the Water System in accordance with Section 9.
"Series" or "Series of Bonds" refers to all Bonds which are issued at one time, pursuant to a
single resolution, ordinance or other authorizing document of the City, regardless of variations in
maturity, interest rate or other provisions, unless the documents authorizing the Bonds specify
that the Bonds are part of separate Series.
"Series 2003 Bonds" means the City's Water Revenue Bonds, Series 2003, that are described in
Section 15 of this Master Declaration.
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"Series 2003 Project" means improvements, property acquisition and other public purposes
related to the Water System, including a transmission line, a distribution line, fire flow
distribution, a reservoir, and a water treatment plant, and to pay all costs incidental thereto.
"Subordinate Obligations" means any obligations of the City payable from Net Operating
Revenues which comply with the provisions of Section 8 of this Master Declaration.
"Tax Maximum" means, for any Series of Bonds, the lesser of: Maximum Annual Debt Service
on the Series; 125% of average amount of principal, interest and premium, ifany, required to be
paid on that Series during all Fiscal Years in which that Series will be Outstanding, calculated as
of the date of issuance of that Series; or, 10% of the proceeds of such Series, as "proceeds" is
defined for purposes of Section 148( d) of the Code.
"Water Fund" means the collection of funds and accounts used by the City to hold the Gross
Revenues and the proceeds of the Bonds, to be maintained pursuant to Section 3.1 of this Master
Declaration.
"Water System" or "System" means all real and personal property now or hereafter owned,
operated, used, or maintained by the City for water treatment, distribution and transmission
within and without the corporate limits of the City.
Section 3. Deposit, Pledge and Use of Revenues.
3.1. All Gross Revenues shall be deposited to or maintained in the Water Fund that the City
has created. The City hereby pledges the Net Operating Revenues to the payment of principal
and interest on all Bonds. As long as any Bonds remain issued and outstanding, moneys in the
Water Fund shall be used solely to pay the following amounts in the following order:
(A) To pay Operating Expenses,
(B) To credit the Revenue Debt Account to pay Bond principal and interest,
(C) To credit the Reserve Account to eliminate any deficiency in the Required Reserve.
(D) To credit the Rate Stabilization Account, and
(E) For any other lawful purpose, but only if all deposits and payments having a higher
priority under this Section have been made.
Section 4. Funds and Accounts.
4.1. The City shall deposit into the Revenue Debt Account Net Operating Revenues, or
monies in the Reserve Account, sufficient to make payments of Bond principal and interest as
provided in this Section 4.
(A) The City hereby covenants with the owners of the Bonds that it will, so long as any
Bonds remain outstanding, make the following deposits from the Net Operating
Revenues into the Revenue Debt Account in the Water Fund:
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(1) Not less than five business days prior to a Bond interest payment date, the City will
deposit into the Revenue Debt Account an amount equal to the amount necessary to pay
Bond interest. Prepayment of deposits will fulfill this requirement. Notwithstanding the
foregoing, the City shall deposit into the Revenue Debt Account from the Net Operating
Revenues an amount sufficient to permit all interest due on the Bonds to be paid on the
date it is due.
(2) Not less than five business days prior to a Bond principal payment date, the City will
deposit into the Revenue Debt Account an amount equal to the amount necessary to pay
Bond principal. Prepayment of deposits will fulfill this requirement. Notwithstanding
the foregoing, the City will deposit into the Revenue Debt Account from the Net
Operating Revenues an amount sufficient to permit all principal due on the Bonds to be
paid on the date it is due.
4.2. The City shall maintain the Reserve Account in the Water Fund.
(A) The City shall maintain a balance in the Reserve Account at least equal to the Required
Reserve. Moneys required to be maintained in the Reserve Account will be used only to
pay Bond principal and interest and redemption charges, if any, and only in the event that
the Net Operating Revenues and moneys in the Revenue Debt Account are insufficient to
pay Bond principal and interest when due.
(B) The City covenants with the owners of the Bonds that it will, on each Bond payment date
so long as any Bonds remain outstanding, deposit from the Net Operating Revenues into
the Reserve Account an amount such that the balance in the Reserve Account will at least
equal the Required Reserve. In the event the amount on deposit in the Reserve Account
is less than the Required Reserve, the deficiency shall be eliminated from payments for
such purpose available from the Water Fund, in proportionate monthly amounts so that
the Required Reserve is achieved within twelve months from the date of any deficiency.
In the event the amount on deposit in the Reserve Account is more than the Required
Reserve, any such excess may be transferred to the Revenue Debt Account.
(C) The balance in the Reserve Account shall include, in addition to cash deposits and bond
proceeds, the face amount of any Reserve Equivalents.
(D) Moneys in the Reserve Account may be invested only in "Permitted Investments." If
Permitted Investments mature later than one year from the date of purchase, then the City
shall prepare and have on file a Certificate with the report required by Section 5.2 of this
Master Declaration valuing such Permitted Investments at the lower of cost or market.
Deficiencies in the Reserve Account shall be eliminated as provided in Section 4.2(B) of
this Master Declaration.
4.3. The City shall maintain the Rate Stabilization Account in the Water Fund. Moneys in the
Rate Stabilization Account shall be used solely to make appropriations to the Water Fund as
determined from time to time by the City. Deposits to the Rate Stabilization Account for any
Fiscal Year reduce Net Operating Revenues for that Fiscal Year, and withdrawals from the Rate
Stabilization Account for any Fiscal Year increase Net Revenues for that Fiscal Year. Deposits
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to and withdrawals from the Rate Stabilization Account shall be made within six months after
the end of each Fiscal Year.
Section 5. Rate Covenant.
5.1. The City covenants that it will charge rates and fees in connection with the operation of
the Water System which, when combined with other Gross Revenues, are adequate to generate:
(A) Net Operating Revenues, without regard to transfers to and from the Rate Stabilization
Account, in each fiscal year at least equal to 1.00 times the Annual Debt Service for that
fiscal year; and,
(B) Net Operating Revenues in each fiscal year, including transfers to and from the Rate
Stabilization Account, at least equal to 1.25 times the Annual Debt Service for that fiscal
year.
5.2. Not later than six months after the end of each fiscal year the City shall prepare a report
that demonstrates whether the City has complied with Section 5.1 during that fiscal year. If the
report demonstrates that the City has not complied with Section 5.1 during that fiscal year, it
shall not constitute an Event of Default if, within thirty days after the report is filed, the City files
a certificate of a City Official that specifies the actions that the City has taken and will take
within the next ninety (90) days to permit the City to comply with Section 5.1 for the remainder
of the Fiscal Year in which the report is filed, and for the succeeding Fiscal Year.
Section 6. General Covenants.
The City hereby covenants and agrees with the owners of all outstanding Bonds as follows:
6.1. The City shall, to the extent the Net Operating Revenues are sufficient, promptly cause
the principal and interest on the Bonds to be paid as they become due.
6.2. The City shall maintain complete books and records relating to the operation of the Water
System, and all City funds and accounts in accordance with generally accepted accounting
principles, and will cause such books and records to be audited annually at the end of each Fiscal
Year, and an audit report prepared by the Auditor and made available for the inspection of
Owners.
6.3. The City shall not issue Bonds or other obligations having a claim superior to the claim
of the Bonds upon the Net Operating Revenues.
6.4. The City shall promptly deposit into all funds and accounts all sums required to be so
deposited.
6.5. The City shall cause the System to be operated at all times in a safe, sound, efficient and
economic manner in compliance with all health, safety, environmental laws, regulatory body
rules, regulatory body orders and court orders applicable to the City's operation and ownership of
the System, and shall cause the System to be maintained, preserved, reconstructed, expanded and
kept, with all appurtenances and every part and parcel thereof, in good working order and
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condition, and shall from time to time to be made, without undue deferral, all necessary and
proper repairs, replacements and renewals so that at all times the operation of the System shall be
properly and advantageously conducted. The City shall also maintain deposits to funds and
accounts that cause the System to be reasonably maintained and renewed.
6.6. The City shall at all times maintain with responsible insurers all such insurance on the
System as is customarily maintained with respect to works and properties of like character
against accident to, loss of or damage to such works or properties. If any useful part of the
System is damaged or destroyed, such part will be restored to use. The money collected from
insurance against accident to or destruction of the physical System will be used for repairing or
rebuilding the damaged or destroyed System, and to the extent not so applied, will be applied to
the payment or redemption of the Bonds on a pro rata basis, and for such purpose paid into the
Revenue Debt Account. Any such insurance must be in the form of policies or contracts for
insurance with insurers of good standing and shall be payable to the City, or in the form of
self-insurance by the City. The City shall establish such fund or funds or reserves as are
necessary to provide for its share of any such self-insurance.
6.7. The City will not, nor will it permit others to, sell, mortgage, lease or otherwise dispose
of or encumber all or any portion of the Water System except:
(A) The City may dispose of all or substantially all of the Water System, only if the City pays
all Bonds or defeases them pursuant to Section 14;
(B) Except as provided in 6.7(B)(3), the City will not dispose of any part of the Water System
in excess of 5% of the value of the Water System in service unless prior to such
disposition either:
(1) There has been filed with the City a certificate of a Qualified Consultant stating
that such disposition will not impair the ability of the City to comply with the rate
covenant contained in Section 5 of this Master Declaration; or
(2) Provision is made for the payment, redemption or other defeasance of a principal
amount of the Bonds equal to the greater of the following amounts:
(a) An amount which will be in the same proportion to the net principal amount
of the Bonds then Outstanding (defined as the total principal amount of the Bonds then
Outstanding less the amount of cash and investments in the Revenue Debt Account) that
the Gross Revenues attributable to the part of the Water System sold or disposed of for
the 12 preceding months bears to the total Gross Revenues for such period; or
(b) An amount which will be in the same proportion to the net principal amount
of the Bonds then Outstanding that the book value of the part of the Water System sold or
disposed of bears to the book value of the Water System immediately prior to such sale or
disposition;
(3) The City may dispose of any portion of the Water System that has become
unserviceable, inadequate, obsolete, or unfit to be used or no longer necessary for
use in the operation of the Water System;
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(4) If the ownership of all or part of the Water System is transferred from the City
through the operation of law, the City shall to the extent authorized by law,
reconstruct or replace such transferred portion using any proceeds of the transfer
unless the City Council reasonably determines that such reconstruction or
replacement is not in the best interest of the City and the Bondowners, in which
case any proceeds shall be used for the payment, redemption or defeasance of the
Bonds;
6.8. The covenants, representations, and warranties contained in this Master Declaration, the
each supplemental declaration executed pursuant to this Master Declaration and any covenants,
representations and warranties in the closing documents relating to each Series of Bonds issued
pursuant to this Master Declaration shall constitute contracts with the Owners of each such
Series of Bonds, and shall be enforceable by them.
Section 7. Parity Obligations.
7.1. The City may issue Parity Obligations to provide funds for any purpose relating to the
Water System which is authorized by law, but only upon the following conditions:
(A) No Default has occurred and is continuing;
(B) At the time of the issuance of the Parity Obligations there is no deficiency in the Revenue
Debt Account and the Reserve Account;
(C) The supplemental declaration authorizing the issuance of the Parity Obligations requires
that a deposit be made at closing sufficient to bring the balance in the Reserve Account
equal to the Required Reserve for all Outstanding Bonds, including the proposed Parity
Obligations.
(D) The supplemental declaration authorizing the issuance of the Parity Obligations contains
a covenant requiring the City to charge rates and fees projected to generate Net Operating
Revenues equal to the amount described in Section 5.1 of this Master Declaration,
including the proposed Parity Obligations.
(E) Either:
(1) the Net Operating Revenues for any 12 consecutive months during the 18 months
preceding the date of issuance of the Parity Obligations were not less than 1.25 times the
sum of the actual debt service of the Bonds for the immediately preceding 12 months,
plus the average annual debt service for the proposed Parity Obligations as certified by
the City Official; or
(2) the Net Operating Revenues, as projected for the next ensuing three fiscal years and
as certified by a qualified engineering, auditing, or other qualified firm (including any
rate increases adopted by the Council) are not less than 1.25 times the actual debt service
for the ensuing three fiscal year's debt service on all outstanding Bonds plus the average
annual debt service on the proposed Parity Obligations. For the purposes of the
certificate required by this Section 7(E)(2), Net Revenues may be adjusted in
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consideration of rate increases that have been adopted by the City and will be legally
effective within 12 months of the date of delivery, anticipated increases resulting from
growth in customers, and any increase in property, construction, additions, or extensions
to the System that is in process at the time of the Certificate or for which the proceeds of
the proposed Parity Obligations will be used.
7.2. The City may issue Parity Obligations to refund Outstanding Bonds, not withstanding the
requirements of Section 7.1, if the required debt service of the refunding bonds does not exceed
the debt service for the refunded bonds payable in any Fiscal Year by not more than $5,000.
7.3. Any supplemental declaration authorizing the issuance of Parity Obligations shall require
deposits into the Reserve Account in amounts sufficient to make the balance in the Reserve
Account at least equal to the Required Reserve. Notwithstanding any provision herein to the
contrary, the deposit required in this Section 7.3 may be made in not more than five (5)
substantially equal annual installments, with the final installment due not later than the fifth
anniversary of the issuance of the Series of Bonds. If the City elects to fund the portion of the
Required Reserve which is allocable to a Series of Bonds in installments, the election of and the
schedule for such deposits shall be stated prominently in the proceedings authorizing the Series
of Bonds.
7.4. A Exchange Agreement may be a Parity Exchange Agreement and a Parity Obligation if
the obligation to make City Payments under the Exchange Agreement qualifies as a Parity
Obligation under Section 7, after the Reciprocal Payments under the Exchange Agreement are
applied to reduce Annual Debt Service. Any Parity Exchange Agreement shall clearly state that
it is a Parity Exchange Agreement and has qualified as a Parity Obligation under Section 7 of
this Master Declaration. In addition, the City may replace a Parity Exchange Agreement with
another Parity Exchange Agreement without qualifying the replacement Exchange Agreement
under Section 7 if the replacement does not increase the Annual Debt Service in any Fiscal Year
by more than $5,000.
7.5. All Bonds issued in accordance with this Section 7 shall have a lien on the Net Operating
Revenues which is equal to the lien of all then Outstanding Bonds and all Parity Obligations
issued in accordance with this Section 7.
Section 8. Subordinate Obligations.
The City may issue Subordinate Obligations to provide funds for any purpose authorized by law,
provided no default has occurred and is continuing. All Subordinate Obligations shall have a
lien on the Net Operating Revenues which is subordinate to the lien of the Bonds. In the event of
any insolvency or bankruptcy proceedings relative to the City or to its property, the holders of
the Bonds shall be entitled to receive payment in full of all principal, premium (if any) and
interest thereon (including interest accruing after the commencement of any proceeding) before
the holders of the Subordinate Obligations are entitled to receive any payment on account of
principal, premium (if any) or principal upon the Subordinate Obligations.
Page 10 - Master Water Revenue Bond Declaration
Section 9. Separate Utility System
The City may declare property which the City owns and is part of the Water System (but has a
value of less than five percent of the Water System at the time of the declaration), and property
which the City has not yet acquired but would otherwise become part of the Water System, to be
part of a Separate Utility System. The City may pay costs of acquiring, operating and
maintaining Separate Utility Systems from Net Operating Revenues, but only if there is no
deficit in the Revenue Debt Account or the Reserve Account. The City may issue obligations
which are secured by the revenues produced by the Separate Utility System, and may pledge the
Separate Utility System revenues to pay those obligations. In addition, the City may issue
Subordinate Obligations to pay for costs of a Separate Utility System, and may pledge the
revenues of the Separate Utility System to pay the Subordinate Obligations.
Section 10. Default and Remedies on Default.
10.1. The following shall constitute Events of Default:
(A) Failure to pay Bond principal or interest when due; or
(B) Failure to perform any other obligation of the City imposed by this Master Declaration or
the Bonds, but only if:
(1) the failure continues for a period of more than ninety (90) days after demand has been
made on the City by the Bondowners or Trustee (as defined below) to remedy the failure;
and
(2) the City fails to take reasonable steps to remedy the failure within that ninety-day
period; or
(C) Imposition of a receivership upon, or liquidation of, the Water Fund; or,
(D) Written admission by the City that the City is unable to pay its debts as they become due.
10.2. Whenever any Event of Default exists, Owners representing 51 percent or more of
Outstanding Bonds, may, without any further demand or notice, exercise any remedy available at
law or in equity. However, the Bonds shall not be subject to acceleration.
Section 11. No Remedy Exclusive.
No remedy herein conferred upon or reserved to Owners is intended to be exclusive and every
such remedy shall be cumulative and shall be in addition to every other remedy given under this
Master Declaration now or hereafter existing at law or in equity. No delay or omission to
exercise any right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver thereofbut any such right or power may be exercised from time
to time and as often as may be deemed expedient. In order to entitle Owners to exercise any
remedy reserved to it in this Section it shall not be necessary to give any notice, other than such
notice as may be required in this Section.
Page 11 - Master Water Revenue Bond Declaration
Section 12. Trustee Duties Upon Default.
12.1. Whenever any Event of Default exists, Owners representing 51 percent or more of the
Outstanding Bonds may appoint a commercial bank with a reported capital and surplus in excess
of $50 million as trustee (the "Trustee") to represent the interests of said Owners.
12.2. Upon the occurrence of an Event of Default the Trustee may pursue any available remedy
at law or in equity to enforce the payment of the principal of, premium, if any, and interest on the
Outstanding Bonds, and to enforce any rights of the Trustee under or with respect to the Master
Declaration. However, the Bonds shall not be subject to acceleration.
12.3. In addition, upon the occurrence of an Event of Default, and upon the filing of a suit or
other commencement of judicial proceedings to enforce the rights of the Trustee and of the
Owners under the Master Declaration, the Trustee will be entitled, as a matter of right, to the
appointment of a receiver or receivers of the Gross Revenues and other amounts pledged under
the Master Declaration, pending such proceedings, with such powers as the court making such
appointment may confer.
12.4. If an Event of Default has occurred and be continuing and ifrequested so to do by the
Owners of at least 25% in aggregate principal amount of Outstanding Bonds and indemnified as
provided in the Master Declaration, Trustee will be obligated to exercise such one or more of the
rights and powers conferred by this Master Declaration, as the Trustee, being advised by counsel,
deems most expedient in the interest of the Owners.
12.5. No Owner of any Bond has the right to institute any suit, action or proceeding at law or in
equity, for any remedy under this Master Declaration, unless:
(A) such Owner has previously given to the Trustee written notice of the occurrence of an
Event of Default;
(B) the Owners of a majority in aggregate principal amount of all the Bonds then outstanding
have requested the Trustee in writing to exercise its powers under this Master
Declaration;
(C) said Owners have tendered to the Trustee indemnity reasonably acceptable to the Trustee
against the costs, expenses and liabilities to be incurred in compliance with such request;
and
(D) the Trustee has refused or failed to comply with such request for a period of 60 days after
such written request has been received by the Trustee and said tender of indemnity is
made to the Trustee.
12.6. A waiver of any Event of Default by any Owner will not affect any subsequent default or
impair any rights or remedies on the subsequent default. No delay or omission of any Owner of
any of the Bonds to exercise any right or power occurring upon any Event of Default will impair
any such right to power or be construed to be a waiver of any such Event of Default.
Page 12 - Master Water Revenue Bond Declaration
12.7. Pursuant to the Master Declaration, if the Trustee takes any judicial or other action in an
Event of Default the Trustee has full power in its direction with respect to any continuance,
discontinuance, withdrawal, compromise, settlement or other disposition of such action, unless
opposed by the written request of the Owners of a majority in aggregate principal amount of the
Outstanding Bonds. The Trustee is appointed attorney-in-fact of the Owners for the purpose of
bringing any suit action or proceedings in an Event of Default.
Section 13. Amendment of Declaration.
13.1. This Master Declaration may be amended without the consent of any Owners for anyone
or more of the following purposes:
(A) To add to the covenants and agreements of the City in this Master Declaration any other
covenants and agreements thereafter to be observed by the City, or to surrender any right
or power herein reserved to or conferred upon the City which in the opinion of a
nationally recognized bond counsel, filed with the City Council, does not adversely affect
the interests of the Owners.
(B) To cure any ambiguity or formal defect contained in this Master Declaration, or to make
any other change that the City reasonably determines will not have a material and adverse
effect on the interests of Bondowners.
(C) To issue Parity Obligations in accordance with Section 7 hereof.
(D) To authorize Parity Exchange Agreements, and specify the rights and duties of the parties
to a Parity Exchange Agreement.
13.2. This Master Declaration may be amended for any other purpose only upon consent of
Owners of not less than 51 % in aggregate principal amount of the Bonds outstanding; provided,
however, that no amendment shall be valid without the consent of Owners of 100 percent of the
aggregate principal amount of the Bonds outstanding which:
(A) Extends the maturity of any Bond, reduces the rate of interest upon any Bond, extends the
time of payment of interest on any Bond, reduces the amount of principal payable on any
Bond, or reduces any premium payable on any Bond, without the consent of the affected
Owner; or
(B) Reduces the percent of Owners required to approve amendatory declarations.
Section 14. Defeasance.
The lien of all or any portion of the Bonds upon the Net Operating Revenues may be defeased,
and those Bonds shall be deemed paid, if the City places in irrevocable escrow direct obligations
of, or obligations guaranteed by, the United States which are calculated to be sufficient, without
reinvestment, to pay principal, interest and any premium on those Bonds as they become due,
either at maturity or on prior redemption.
Page 13 - Master Water Revenue Bond Declaration
Section 15. The Series 2003 Bonds
15.1. Sale Authorized. Pursuant to Oregon's Uniform Revenue Bond Act (ORS 288.805
to 288.945) and the bonding authority given by City Resolution N&oo--1=., the City Council
hereby authorizes the sale and delivery of the City of Ashland, Oregorf Water Revenue Bond,
Series 2003. The aggregate principal amount of the Series 2003 Bonds shall not exceed Three
Million Five Hundred Thousand Dollars ($3,500,000). The Series 2003 Bonds shall be Bonds as
defined in this Master Declaration. The Series 2003 Bonds shall bear interest payable on _
and _ of each year at the following rates, commencing _, and shall mature in the
following years in the following principal amounts:
[insert maturity schedule]
15.2. Limitation on Payment. The Series 2003 Bonds shall be special obligations of the City,
and shall be payable solely from the Net Operating Revenues and amounts required to be
deposited in the Bond Reserve Account as required and as provided by this Master Declaration.
15.3. Bond Form. The Series 2003 Bonds shall be in substantially the form attached as Exhibit
A, and shall be signed with the facsimile or manual signature of the City Official.
15.4. Bond Book-Entry-Form.
The Series 2003 Bonds shall be initially issued in book entry only ("BEO") form through
the Depository Trust Company of New York, New York, or its successor ("DTC"). The City
Official has executed a letter of representations with DTC. While the Series 2003 Bonds are in
BEO form:
(A) No physical Series 2003 Bonds shall be provided to beneficial owners of the Series 2003
Bonds.
(B) Registration and transfer of beneficial interests in the Series 2003 Bonds shall be
governed by the operational arrangements of DTC or any substitute depository, as they
may be amended from time to time, as provided in the Letter of Representations.
(C) Except as may be provided in any agreement with a bond insurer, DTC or its nominee
shall be treated as the Owner of the Series 2003 Bonds for all purposes, including
payment and the giving of notices to Owners. The Series 2003 Bond payments shall be
made, and notices shall be given, to DTC or its nominee as provided in the Letter of
Representations. Any failure of DTC to advise any of its participants, or of any
participant to notify the beneficial owner, of any such notice and its content or effect shall
not affect the validity of the redemption of the Series 2003 Bonds called for redemption
or of any other action premised on such notice.
(D) The City may discontinue maintaining the Series 2003 Bonds in BEO form at any time.
The City shall discontinue maintaining the Series 2003 Bonds in BEO form ifDTC
determines not to continue to act as securities depository for the Series 2003 Bonds, or
fails to perform satisfactorily as depository, and a satisfactory substitute depository
cannot reasonably be found.
Page 14 - Master Water Revenue Bond Declaration
(E) If the City discontinues maintaining the Series 2003 Bonds in BEO form, the City shall
cause the registrar and paying agent for the Series 2003 Bonds (the "Paying Agent") to
authenticate and deliver to the beneficial owners or their nominees replacement Series
2003 Bonds in fully registered form in denominations of $5,000 or integral multiples.
(F) While the Series 2003 Bonds is in BEG form, the City and the Paying Agent shall have
no responsibility or obligation to any participant or correspondent of DTC or to any
beneficial owner on behalf of which such participants or correspondents act as agent for
the beneficial owner with respect to:
(1) the accuracy of the records ofDTC, the nominee or any participant or
correspondent with respect to any participant's or beneficial owner's interest in
the Series 2003 Bonds;
(2) the delivery to any participant or correspondent or any other person of any notice
with respect to the Series 2003 Bonds, including any notice of redemption or
purchase;
(3) the selection by DTC of the beneficial interest in the Series 2003 Bonds to be
redeemed prior to maturity; or
(4) the payment to any participant, correspondent, or any other person other than the
registered owner of the Series 2003 Bonds as shown in the registration books
maintained by the Paying Agent, of any amount with respect to principal,
premium, if any, or interest on the Series 2003 Bonds.
(G) The City shall payor cause to be paid all principal, premium and interest on the Series
2003 Bonds only to or upon the order of the Owners, as shown in the registration books
maintained by the Paying Agent, and all such payments shall be valid and effective to
fully satisfy and discharge the City's obligation with respect to payment thereof to the
extent of the sum or sums so paid.
(H) The provisions of this Section 15.4 may be modified without the consent of the beneficial
owners in order to conform this Section 15.4 to the standard practices of DTC or any
substitute depository for obligations issued in BEG form.
15.5. Places of Payment and Paying Agents.
(A) While the Series 2003 Bonds are in BEG form, the Paying Agent shall pay Series 2003
Bond principal, interest and any redemption price to DTC or its nominee in accordance
with the Letter of Representations.
(B) While the Series 2003 Bonds are not in BEO form, Series 2003 Bond principal, interest
and redemption price, if any, shall be payable through the corporate trust office of the
Paying Agent, by a check drawn on the Paying Agent and mailed on the interest payment
date to the Owners, as shown on the record date in the registration books maintained by
the Paying Agent for the Series 2003 Bonds.
Page 15 - Master Water Revenue Bond Declaration
15.6. Notice of Redemption.
(A) Unless a shorter period is agreed to by the Paying Agent, the City shall give the Paying
Agent at least forty (40) days' prior written notice of any proposed optional redemption of
the Series 2003 Bonds.
(B) Unless the notice states that the redemption is conditioned upon receipt by the Paying
Agent of sufficient funds for redemption, the notice shall contain a certification by the
City that it has funds available to it sufficient to pay in full the principal, premium (if
any) and interest portions of the redemption price of the Series 2003 Bonds to be
redeemed.
(C) While the Series 2003 Bonds is in BEO form, the Paying Agent shall give notice of
redemption only to DTC or its nominee, in the manner required by the rules ofDTC.
(D) The Paying Agent shall give notice of redemption under this Section 15.6 only for the
Series 2003 Bonds which are not then in BEO form. The notice shall specify the date of
redemption, the redemption price, CUSIP numbers, maturity date, and the place or places
where amounts due upon such redemption will be payable and any other information
which may be required to identify the Series 2003 Bonds which are to be redeemed. The
notice may state that the redemption is conditioned upon the deposit with the Paying
Agent of sufficient funds to pay the redemption price of the Series 2003 Bonds to be
redeemed. The notice shall state that, provided that sufficient funds are on deposit with
the Paying Agent, the Series 2003 Bonds which are being called for redemption shall
become due and payable on the date specified in the notice, and that interest on those
Series 2003 Bonds shall cease to accrue on that date. The Paying Agent shall mail a copy
of such notice by first class mail, postage prepaid, not less than thirty (30) days before the
redemption date, to the Owners of any Series 2003 Bonds which are to be redeemed, at
their last address, if any, appearing upon the registration books as of the record date, but
no defect in any notice and no failure to give any notice shall invalidate the redemption of
any Series 2003 Bonds for which proper notice was given. No notice of redemption need
be given to any Owners of any Series 2003 Bonds who have filed a written waiver of
notice with the Paying Agent. Any notice mailed as provided in this Section shall be
conclusively presumed to have been duly given, whether or not the Owner actually
receives the notice.
15.7. Authentication, Registration And Transfer.
(A) No Series 2003 Bond shall be entitled to any right or benefit under this Master
Declaration unless it shall have been authenticated by an authorized officer of the Paying
Agent. The Paying Agent shall authenticate all Series 2003 Bonds to be delivered at
closing of the Series 2003 Bonds, and shall additionally authenticate all Series 2003
Bonds properly surrendered for exchange or transfer pursuant to this Master Declaration.
(B) The ownership of all Series 2003 Bonds shall be entered in the bond register maintained
by the Paying Agent, and the City and the Paying Agent may treat the person listed as
owner in the bond register as the owner of the Bond for all purposes.
Page 16 - Master Water Revenue Bond Declaration
(C) If the Series 2003 Bonds cease to be in book-entry form, the Paying Agent shall mail
each interest payment on the interest payment date (or the next business day if the
payment date is not a business day) to the name and address of the Owners as they appear
on the bond register as of record date. If payment is so mailed, neither the City nor the
Paying Agent shall have any further liability to any party for such payment.
(D) While the Series 2003 Bonds are in book-entry form, the Paying Agent shall transfer
Bond principal and interest payments to DTC in the manner required by DTC.
(E) The Series 2003 Bonds may be exchanged for an equal principal amount of the Series
2003 Bonds of the same maturity which are in different denominations, and the Series
2003 Bonds may be transferred to other owners if the Owner submits the following to the
Paying Agent:
(1) written instructions for exchange or transfer satisfactory to the Paying Agent,
signed by the Owner or the Owner's attorney in fact and guaranteed or witnessed
in a manner satisfactory to the Paying Agent; and
(2) the Series 2003 Bonds to be exchanged or transferred.
(F) The Paying Agent shall not be required to exchange or transfer any Series 2003 Bonds
submitted to it during any period beginning with a record date and ending on the next
following payment date; however, such Series 2003 Bonds shall be exchanged or
transferred promptly following that payment date.
(G) The Paying Agent shall note the date of authentication on each Bond. The date of
authentication shall be the date on which the Owner's name is listed on the Bond register.
(H) For purposes of this Section, the Series 2003 Bonds shall be considered submitted to the
Paying Agent on the date the Paying Agent actually receives the materials described in
Section 15.7(E).
(I) The City may alter these provisions regarding registration and transfer without consent of
Owners in order to conform to changes in registration customs by mailing notification of
the altered provisions to all Owners. The altered provisions shall take effect on the date
stated in the notice, which shall not be earlier than 45 days after notice is mailed.
15.8. Disposition of Series 2003 Bonds Proceeds. $ of accrued interest shall be
deposited in the Revenue Debt Account. $ shall be deposited in the Reserve Account to
make the balance in the Reserve Account equal to the Required Reserve. $_ shall be
deposited with , as escrow agent to defease the City's Water Revenue Bonds, Series
1994. $ shall be deposited with the City to pay the costs of the Series 2003 Project and
costs incurred in connection with the issuance of the Series 2003 Bonds.
15.9. Tax-Exempt Status.
(A) The City covenants for the benefit of the Owners of the Series 2003 Bonds to comply
with all provisions of the Code which are required for interest on the Series 2003 Bonds
Page 17 - Master Water Revenue Bond Declaration
to be excluded from gross income for federal taxation purposes. In determining what
actions are required to comply, the City may rely on an opinion of Bond Counsel. The
City makes the following specific covenants with respect to the Code:
(1) The City will not take any action or omit any action if it. would cause the Series
2003 Bonds to become "arbitrage bonds" under Section 148 of the Code.
(2) The City shall operate the facilities financed with the Series 2003 Bonds so that
the Series 2003 Bonds do not become private activity bonds within the meaning
of Section 141 of the Code.
(3) The City shall pay, when due, all rebates and penalties with respect to the Series
2003 Bonds which are required by Section 148(f) of the Code.
(B) The City Official may enter into additional covenants to protect the tax-exempt status of
the Series 2003 Bonds. The covenants contained in this Section 15.9 and any covenants
in the closing documents for the Series 2003 Bonds shall constitute contracts with the
owners of the Series 2003 Bonds, and shall be enforceable by them. oj
EXECUTED ON BEHALF OF THE CITY OF ASHLAND BY ITS CJ1 ~ OF THE "
DAYOF~,2003. -
City of Ashland, Oregon
Page 18 - Master Water Revenue Bond Declaration
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Exhibit A
(Form of Bond)
No. R-<<BondNumber>>
$ <<PrincipalAmtNumber>>
United States of America
State of Oregon
Jackson County
City of Ashland
Water Revenue Bonds
Series 2003
Dated Date:
Interest Rate Per Annum: <<CouponRate>>%
Maturity Date: _, <<MaturityYear>>
CUSIP Number: <<CUSIPNumbr>>
Registered Owner: -----Cede & Co.-----
Principal Amount: -----<<PrincipalAmtSpelled>> Dollars-----
The City of Ashland, Oregon (the "City"), for value received, acknowledges itself indebted and hereby promises to
pay to the Registered Owner hereof, or registered assigns, the Principal Amount indicated above on the Maturity
Date indicated above together with interest thereon from the date hereof at the Interest Rate Per Annum indicated
above, computed on the basis ofa 360-day year of twelve 30-day months. Interest is payable semiannually on the
_ day of _ and the _ day of _ in each year until maturity or prior redemption, commencing
. Payment of each installment of principal or interest shall be made to the Registered Owner hereof whose
name appears on the registration books of the City maintained by the City's paying agent and registrar, which is
currently in (the "Paying Agent"), as of the close of business on the fifteenth
day of the calendar month immediately preceding the applicable interest payment date. For so long as this Bond is
subject to a book-entry-only system, principal and interest payments shall be paid on each payment date to the
nominee of the securities depository for the Bonds. On the date of issuance of this Bond, the securities depository
for the Bonds is The Depository Trust Company, New York, New York, and Cede & Co. is the nominee of
The Depository Trust Company. Such payments shall be made payable to the order of "Cede & Co."
This Bond is one of a duly authorized series of bonds of the City aggregating $ in principal amount
designated as Water Revenue Bonds, Series 2003 (the "Series 2003 Bonds"). The Series 2003 Bonds are issued for
the purpose of fmancing improvements, property acquisition and other public purposes related to the water system,
including a transmission line, a distribution line, a fire flow distribution, a reservoir, and a water treatment plant, to
refund its outstanding Water Revenue Bonds, Series 1994, and to pay all costs incidental thereto. The Series 2003
Bonds are authorized by City Resolution No. 2003-04 and issued under City Resolution No. _ and the Master
Water Revenue Bond Declaration dated _,2003 (the "Master Declaration") and the Oregon Uniform Revenue
Bond Act, in full and strict accordance and compliance with all of the provisions of the Constitution and Statutes of
the State of Oregon and the Charter of the City.
The Series 2003 Bonds constitute valid and legally binding special obligations of the City. The Net Operating
Revenues, as defined in the Master Declaration, are pledged for the punctual payment of the principal of and interest
on the Series 2003 Bonds. The City is not authorized to levy any additional taxes to pay the Series 2003 Bonds.
The Series 2003 Bonds do not constitute a debt or indebtedness of Jackson County, the State of Oregon, or any
political subdivision thereof other than the City.
The Series 2003 Bonds are initially issued in book-entry-only form with no certificates provided to the beneficial
owners of the Series 2003 Bonds. The Depository Trust Company and its participants will maintain records of
ownership of beneficial interests in the Series 2003 Bonds.
Page I-Bond Form
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Should the book-entry only security system be discontinued, the Series 2003 Bonds shall be issued in the form of
registered Series 2003 Bonds without coupons in denominations of $5,000 or any integral multiple thereof. Such
Series 2003 Bonds may be exchanged for the Series 2003 Bonds of the same aggregate principal amount and
maturity date, but different authorized denominations, as provided in the Master Declaration.
The Series 2003 Bonds mature and are subject to redemption as described in the fmal Official
Statement for the Series 2003 Bonds that is dated
Unless the book-entry-only system is discontinued, notice of any call for redemption shall be given as required by
the Blanket Issuer Letter of Representations to The Depository Trust Company, as referenced in the Master
Declaration. Interest on any Series 2003 Bond or Bonds so called for redemption shall cease on the redemption date
designated in the notice. The Paying Agent will notify The Depository Trust Company promptly of any Series 2003
Bonds called for redemption. If the book-entry-only system is discontinued, notice of redemption shall be given by
frrst-class mail, postage prepaid, not less than thirty days nor more than sixty days prior to the date fixed for
redemption to the registered owner of each Bond to be redeemed at the address shown on the Bond register;
however, any failure to give notice shall not invalidate the redemption of the Series 2003 Bonds.
Any exchange or transfer of this Bond must be registered, as provided in the Master Declaration, upon the Series
2003 Bond register kept for that purpose by the Paying Agent. The exchange or transfer of this Bond may be
registered only by surrendering it, together with a written instrument of exchange or transfer which is satisfactory to
the Paying Agent and which is executed by the registered owner or duly authorized attorney. Upon registration, a
new registered Series 2003 Bond or Bonds, of the same maturity and in the same aggregate principal amount, shall
be issued to the transferee as provided in the Master Declaration. The City and the Paying Agent may treat the
person in whose name this Bond is registered on the Bond register as its absolute owner for all purposes, as provided
in the Master Declaration.
Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York
corporation ("DTC") to Issuer or its agent for registration of transfer, exc11ange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or to such other entry as is requested by an authorized representative
ofDTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
This Bond shall remain in the Paying Agent's custody subject to the provisions of the FAST Balance Certificate
Agreement currently in effect between the Paying Agent and The Depository Trust Company.
IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all conditions, acts, and things required to exist, to
happen, and to 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 the Constitution and Statutes of the State of Oregon;
and that the issue of which this Bond is a part, and all other obligations of the City, are within every debt limitation
and other limit prescribed by such Constitution and Statutes and City Charter.
IN WITNESS WHEREOF, the Council of the City of Ashland, Oregon, by resolution duly passed, has caused this
Bond to be signed by facsimile signature of its Mayor and countersigned by facsimile signature of its _, and
has caused a facsimile of the corporate seal of the City to be imprinted hercon, all as of the date frrst above written.
City of Ashland, Oregon
, Mayor
Page 2 -Bond Form
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THIS BOND SHALL NOT BE VALID UNLESS PROPERLY AUTHENTICATED BY THE PAYING AGENT
IN THE SPACE INDICATED BELOW.
CERTIFICATE OF AUTHENTICATION
This Bond is one ofa series of$_ aggregate principal amount of City of Ashland, Oregon Water Revenue
Bonds, Series 2003, issued pursuant to the Master Declaration described herein.
Date of authentication:
, as Paying Agent
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
(Please insert social security or other identifying number of assignee)
this Bond and does hereby irrevocably constitute and appoint
as attorney to transfer this Bond on the books kept for registration thereof with the full power of substitution in the
premises.
Dated:
NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears
upon the face of this Bond in every particular, without alteration or enlargement or any change whatever.
NOTICE: Signature( s) must be guaranteed by a member of Signatur~ Guaranteed
the New York Stock Exchange or a commercial bank or trust
company (Bank, Tmst Company or Brokerage Firm)
Authorize,l Officer
The following abbreviations, when used in the inscription on the face of this Bond, shall be
construed as though they were written out in full according to applicable 1,IW5 or regulations.
TEN COM -- tenants in common
TEN ENT -- as tenants by the entireties
IT TEN -- as joint tenants with right of survivorship
and not as tenants in common
OREGON CUSTODIANS use the following
CUST UL OREG 1\11N
as custodian for (name of minor)
OR UNIF TRANS MIN ACT
under the Oregon Uniform Transfer to Minors Act
Additional abbreviations may also be used though not in the list above.
Page 3 -Bond Form
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RESOLUTION NO. d..C03 -O~
A RESOLUTION OF CITY OF ASHLAND, JACKSON COUNTY,
OREGON, AUTHORIZING THE ISSUANCE OF WATER REVENUE
BONDS FOR A TOTAL NOT TO EXCEED $3,500,000, AND PROVIDING
FOR PUBLICATION OF NOTICE.
The City of Ashland resolves as follows:
Section 1. Findings
The Council finds as follows:
1.1 It is financially feasible and in the best interests of the City to authorize the issuance of
bonds under the Uniform Revenue Bond Act to finance improvements, property acquisition and
other public purposes related to the water system, including a transmission line, a distribution line,
fire flow distribution, a reservoir, and a water treatment plant, and to pay all cost incidental thereto
(the "Projects").
1.2 The City is authorized to issue revenue bonds for any public purpose under Oregon's
Unifonn Revenue Bond Act (ORS 288.805 to 288.945 or the "Act"). Revenue bonds issued under
the Act may be payable from all or any portion of the water system revenues of the City (the
"Revenues").
1.3 It is desirable to obtain $3,500,000 of bonding authority to finance the Projects.
1.4 The City will cause a plan to be prepared showing that the City's estimated Revenues
which are pledged to pay each series of bonds authorized by this resolution will be sufficient to
pay that series.
1.5 The City previously issued its Water Revenue Bonds, Series 1994 (the "1994 Bonds") that
bear interest at rates that are higher than current market rates, and the City may be able to reduce
debt service expense by refunding the 1994 Bonds. The City will establish the terms and
conditions assoeiated with those refunding bonds by subsequent resolution.
Section 2. Bonds Authorized
The City hereby authorizes the issuance of not more than Three Million Five Hundred Thousand
Dollars ($3,500,000) in aggregate principal amount of revenue bonds to finance the Projects and
pay related costs. The bonds shall be issued and sold in accordance with the Act, and shall be
payable solely from the Revenues which the City pledges to pay the bonds. Prior to selling the
bonds the City Council shall establish by resolution or delegate the authority to establish the terms
and conditions of the bonds pursuant to ORS 288.520.
Section 3. Professional Appointments
The City hereby appoints Preston, Gates and Ellis LLP as bond counsel and Western Financial
Group, LLC as financial advisor for the revenue bonds. Western Financial Group is authorized to
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submit an advance refunding plan to the Oregon State Treasury in preparation for issuing
refunding bonds to refund the 1994 Bonds.
Section 4. Notice; Procedure
4.] No bonds may be sold, and no purchase agreement for the bonds may be executed, until at
least sixty (60) days after publication of the Notice of Revenue Bond Authorization, which is
attached to this resolution as Exhibit "A" (the "Notice"). The Notice shall specify the last date on
which petitions may be submitted, and shall be published in at least one newspaper of general
circulation in the City in the same manner as are other public notices of the City.
4.2 Ifpetitions for an election, containing valid signatures of not less than five percent (5%) of
the City's electors, are received by the date indicated in the Notice: the question of issuing the
bonds shall be placed on the ballot at the next legally available election date; and, no bonds may
be sold under this ordinance until the question of issuing those bonds is approved by a majority of
the electors of the City who vote on that question.
Section 5. Bonds Payable Solely from Revenues
The bonds shall not be general obligations of the City, and neither the authorization nor issuance
of the bonds shall authorize the City to levy any additional taxes. The bonds shall be payable
solely from the portion of the Revenues which the City pledges to payment of the bonds pursuant
to ORS 288.825(1) and the resolution to be adopted by the City pursuant to Section 2 of this
reso Jution.
Section 6. Effective Date
This resolution takes effect upon signing by the Mayor.
This resolution was read by title only in accordance with Ashland Municipal Code
92.0;P;0 duly PASSED and ADOPTED this 18th day of February, 2003.
~ ~. City Recorder
, Barbara Christensen
SIGNED and APPROVED this 18th day of February, 2003.
a~~~M
. , ayor
Alan W. DeBoer
M!~
Paul Nolte
, City Attorney
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Exhibit A
Notice of Revenue Bond Authorization
NOTICE IS HEREBY GIVEN that the City Council of the City of Ashland,
Oregon (the "City"), adopted Resolution No. _ on February 18th, 2003, authorizing the
issuance of revenue bonds to finance improvements, property acquisition and other public
purposes related to the water system, including a transmission line, a supply line and a fire flow
distribution reservoir (the "Projects").
The City Council may establish by subsequent resolution all terms, conditions and
covenants regarding the bonds and the Project revenues pledged to the bonds which are
necessary or desirab Ie to sell the bonds.
The revenue bonds described in this notice will not be issued in an aggregate
principal amount of more than Three Million Five Hundred Thousand Dollars ($3,500,000). The
bonds shall be payable solely from the portion of the "revenues" (as defined in the Unifonn
Revenue Bond Act ORS 288.805 to 288.945, or the "Act") from the City's water system which
the City pledges to the payment of the bonds. The bonds shall not be general obligations of the
City, nor a charge upon its tax revenues, but will be payable solely from the revenues which the
City pledges to the payment of the bonds.
If written petitions requesting an election on the issuance of the bonds, signed by
not less than five percent (50/0) of the City's electors, are filed at the Office of the City Recorder
on or before ,2003 (the 61st day after the date of publication of the notice), the question
of issuing the bonds shall be placed on the ballot at the next legally available election date.
The Office of the City Recorder is located at 20 East Main, Ashland, Oregon
97520.
The resolution authorizing the bonds is available for inspection at the Office of
the City Recorder.
The bonds will be issued and sold under the Act; this Notice is published pursuant
to ORS 288.815(6).
By order of
THE CITY COUNCIL OF CITY OF ASHLAND,
Jackson County, Oregon
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Exhibit A to Resolution
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