2351ORDINANCE NO. 2351
AN ORDINANCE AUTHORIZING THE ISSUANCE OF A WATER SYSTEM REVENUE
BOND, SERIES 2018, OF THE CITY OF BLAIR, NEBRASKA, IN THE PRINCIPAL
AMOUNT OF NOT TO EXEED ONE MILLION FOUR HUNDRED THOUSAND DOLLARS
($1,400,000), IN THE FORM OF A PROMISSORY NOTE ISSUED TO EVIDENCE
INDEBTEDNESS TO THE NEBRASKA DEPARTMENT OF ENVIRONMENTAL QUALITY;
APPROVING THE FORM OF SAID BOND (ISSUED AS A SINGLE PROMISSORY NOTE)
AND RELATED LOAN AGREEMENT; PLEDGING AND HYPOTHECATING THE
REVENUES AND EARNINGS OF THE WATERWORKS PLANT AND WATER SYSTEM
OWNED OR TO BE OWNED BY THE CITY FOR THE PAYMENT OF SAID BOND;
PROVIDING FOR THE ISSUANCE AND SALE OF SAID BOND; AUTHORIZING THE
DELIVERY OF SAID BOND AND RELATED LOAN AGREEMENT TO THE NEBRASKA
DEPARTMENT OF ENVIRONMENTAL QUALITY; PROVIDING FOR THE COLLECTION,
SEGREGATION AND APPLICATION OF THE REVENUES OF SAID WATERWORKS
PLANT AND SYSTEM; DETERMINING THAT INTEREST ON SAID BOND SHALL NOT BE
EXCLUDABLE FROM GROSS INCOME FOR PURPOSES OF FEDERAL INCOME
TAXATION; PROVIDING FOR THE DISPOSITION OF THE PROCEEDS OF SAID BOND
AND ORDERING THE ORDINANCE PUBLISHED IN PAMPHLET FORM.
BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF BLAIR,
NEBRASKA, AS FOLLOWS:
Section 1. The Mayor and Council of the City of Blair, Nebraska (the "City") hereby find
and determine as follows:
(a) The City owns and operates a waterworks plant and system (which plant and
system, together with any additions, extensions and improvements thereto hereafter made are
hereinafter referred to as the "Water System") which represents a revenue-producing undertaking
of the City.
(b) the Nebraska Department of Environmental Quality ("NDEQ") has approved a
project of the City for its Water System consisting of the replacement of the South Pump Station,
which lacks capacity to meet the current user demand, and to replace approximately 3,000 feet of
water main along 16th Street, including all related work, land, testing, and engineering fees, and
such project has been designated as Project No. D311619 (the "Project") and has agreed to lend
from monies in NDEQ's Drinking Water Facilities Loan Fund or from other sources in the total
principal amount of not to exceed $1,400,000 (the "2018 NDEQ Loan") and in connection with
such loan has agreed to accept one or more bonds payable from the revenues of the Water System to
be evidenced by and in the form of a single promissory note (the "NDEQ Note" and also sometimes
referred to herein as the "Series 2018 Bond"), with such loan to be governed as to terns and
conditions by an agreement with NDEQ entitled "Loan Agreement (Governmental Borrower)
Between Nebraska Department of Environmental Quality and the City of Blair, Nebraska, NDEQ
Project No. D311619" (the "NDEQ Contract").
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(c) The City has issued and outstanding the following bonds which are a lien upon
and secured by a pledge of the revenue and earnings of the Water System (collectively, the
"Outstanding Bonds"):
i. Water System Revenue Bond, Series 2010, dated August 12, 2010, issued
pursuant to Ordinance No. 2187 of the City (the "2010 Ordinance"), in the
original drawable principal amount of $2,341,400 (the "2010 Bond"),
issued to evidence a loan from the Nebraska Department of Environmental
Quality ("NDEQ"), of which the remaining principal balance outstanding
is $2,551,099;
ii. Water System Revenue Bonds, Series 2010B, dated September 28, 2010,
issued pursuant to Ordinance No. 2191 of the City (the "2010BC
Ordinance"), in the original principal amount of $6,500,000 (the "2010B
Bonds"), of which the remaining principal balance outstanding is
$6,500,000;
iii. Water System Revenue Bonds, Series 2010C (Taxable Interest), dated
September 28, 2010, issued pursuant to the Series 2010BC Ordinance in
the original principal amount of $770,000 (the "2010C Bonds"), of which
the remaining principal balance outstanding is $390,000;
iv. Water System Revenue Bonds, Taxable Series 2012, dated June 5, 2012,
issued pursuant to Ordinance No. 2217 of the City (the "2012 Ordinance")
in the original principal amount of $9,480,000 (the "2012 Bonds"), of
which the remaining principal balance outstanding is $7,860,000; and
V. Water System Revenue Bonds, Series 2016, dated August 24, 2016, issued
pursuant to Ordinance No. 2305 of the City (the "2016 Ordinance") in the
original principal amount of $5,550,000 (the "2016 Bonds"), of which the
remaining principal balance outstanding is $5,195,000; and
vi. Water System Revenue Bonds, Series 2017, dated March 28, 2017, issued
pursuant to the 2016 Ordinance in the original principal amount of
$3,460,000 (the "2017 Bonds"), of which the remaining principal balance
outstanding is $3,460,000.
The 2010 Ordinance, the 2010 BC Ordinance, the 2012 Ordinance and the 2016 Ordinance are
referred to in this Ordinance collectively as the "Outstanding Parity Bond Ordinances".
(d) Under the terms of the Outstanding Parity Bond Ordinances the issuance of
"Additional Bonds" which are payable on a parity with the Outstanding Bonds and equally and
ratably secured therewith are permitted provided that either (i) the "Net Revenues" (as defined in
each of such ordinances and as defined in this Ordinance) have been at least equal to 1.30 times
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the "Average Annual Debt Service Requirements" (as defined in each of such ordinances and as
defined in this Ordinance) of the Outstanding Bonds and the Additional Bonds proposed to be
issued or (ii) the City shall have received a projection (the "Projection") made by a firm of
consulting engineers projecting that such "Net Revenues" in each of the three full fiscal years
after the issuance of such "Additional Bonds" will be at least equal to 1.35 time such "Average
Annual Debt Service Requirements" of the Outstanding Bonds and the proposed Additional
Bonds; and provided further that such Additional Bonds shall be issued pursuant to an ordinance
which shall provide for an increase in the monthly credits to Bond Payment Account sufficient to
pay, when due, the principal of and interest on the Outstanding Bonds and the proposed
Additional Bonds; with respect to such requirements the following determinations are hereby
made:
i. The "Net Revenues" of the Water System as defined in the Outstanding
Parity Bonds Ordinances for the fiscal year ended September 30, 2017 were
not less than $3,680,618.
ii. The "Average Annual Debt Service Requirements" of the Outstanding Bonds
and the proposed Series 2018 Bond (as defined below) are not more than
$1,422,972.
iii. Said "Net Revenues" exceed 1.30 times said "Average Annual Debt Service
Requirements" of the Outstanding Bonds and of the proposed Series 2018
Bond.
iv. This Ordinance provides for an increase in the monthly credits into the Bond
Payment Account in amounts sufficient to pay, when due, the principal of and
interest on the Outstanding Bonds and such proposed Series 2018 Bond.
V. All applicable conditions required the Outstanding Parity Bonds Ordinances
precedent to the issuance of the Series 2018 Bond as an "Additional Bond"
under the terms of said ordinances do exist and have happened.
(e) in connection with the NDEQ Loan, as evidenced by the Series 2018 Bond, it is
necessary and advisable for the City to approve the execution and delivery of the NDEQ Contract
and the NDEQ Note in substantially the forms attached hereto;
(f) all conditions, acts and things required by law to exist or to be done precedent to the
issuance of the Series 2018 Bond as an Additional Bond of equal lien and standing with the
Outstanding Bonds and as provided for in the Outstanding Parity Bond Ordinances do exist and
have been done or are required to exist or to have been done, upon the filing and furnishing of
the Projection, in regular and due form and time as required by law.
Section 2. In addition to the definitions provided in parentheses elsewhere in this
Ordinance, the following definitions of terms shall apply, unless the context shall clearly indicate
otherwise:
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"Additional Bonds" shall mean any and all bonds hereafter issued by the
City pursuant to the terms of this Ordinance which are equal in lien to the
Outstanding Bonds and the Series 2018 Bond, including any such bonds issued
pursuant to Section 6 and refunding bonds issued pursuant to Section 7, as and
when such bonds become equal in lien to the Outstanding Bonds and the Series
2018 Bond, according to their terms and the terms of said Sections 6 and 7.
"Average Annual Debt Service Requirements" shall mean that number
computed by adding all of the principal and interest due when computed to the
absolute maturity of the bonds for which such computation is required and
dividing by the number of years remaining that the longest bond of any issue for
which such computation is required has to run to maturity. In making such
computation, the principal of any bonds for which mandatory redemptions are
scheduled shall be treated as maturing in accordance with such schedule of
mandatory redemptions.
"Deposit Securities" shall mean direct obligations of or obligations the
principal of and interest on which are unconditionally guaranteed by the United
States of America.
"Net Revenues" shall mean the gross revenues derived by the City from
the ownership or operation of the Water System, including investment income,
but not including any income from sale or disposition of any property belonging
to or forming a part of the Water System, less the ordinary expenses to the City of
operating and maintaining the Water System payable from the Operation and
Maintenance Account described in Section 4 of this Ordinance. Operation and
maintenance expenses for purposes of determining "Net Revenues" shall not
include depreciation, amortization (of financing expenses) or interest on any
bonds or other indebtedness. Net Revenues for all purposes of this Ordinance
shall be shown by an audit for the fiscal year in question as conducted by
independent certified public accountants. For purposes of this ordinance, whether
or not in accordance with applicable accounting principles, there shall not be
included in revenues or expenses gain or loss from the early extinguishment of
indebtedness, investment income from any securities deposited in escrow for the
defeasance of any bonds relating to the Water System or unrealized gain or loss
on securities held by the City's Water System. In the event that the City proposes
to issue Additional Bonds and the audit report for the most recently completed
fiscal year is not yet available, "Net Revenues" may be shown as of the most
recent fiscal year for which the audit report is available as supplemented by such
unaudited financial information as the City shall have available, provided that (i)
the lower amount of "Net Revenues" (as between that shown by the available
audit report and that shown by the unaudited financial information certified by
the City) shall be utilized for purposes of showing compliance with the
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requirements for issuance of Additional Bonds and (ii) as of such time, the Series
2010B Bonds, the Series 2010C Bonds and the Series 2012 Bonds shall no longer
be outstanding.
Section 3. To provide for the payment of the costs of the Project, there shall be and there is
hereby ordered issued the Series 2018 Bond, in the form of and evidenced by a single promissory
note (sometimes referred to in this Ordinance, according to the context, as the "NDEQ Note" and
sometimes as the "Series 2018 Bond") in the principal amount of not to exceed One Million Four
Hundred Thousand Dollars ($1,400,000), with such NDEQ Note to be substantially in such form
and to have such payment terms as are set forth in Exhibit A to this Ordinance, which exhibit is by
such reference incorporated herein as if fully set forth. In connection with the issuance of the
NDEQ Note, the City shall also enter into the NDEQ Contract in substantially the form set forth in
Exhibit B to this Ordinance, which exhibit is by such reference incorporated herein as if fully set
forth. The terms and conditions of the NDEQ Note and the NDEQ Contract are hereby approved
and the Mayor and the City Clerk are hereby authorized to execute and deliver the NDEQ Note and
the NDEQ Contract for and on behalf of the City in substantially the form presented but with such
changes from the forms presented and attached hereto as such officers shall deem appropriate for
and on behalf of the City.
Section 4. The revenues and earnings of the Water System are hereby pledged and
hypothecated for the payment of the Series 2018 Bond, the Outstanding Bonds and any
Additional Bonds and interest on such Series 2018 Bond, the Outstanding Bonds and any such
Additional Bonds, and the City does hereby agree with the holders of said Series 2018 Bond, the
Outstanding Bonds and any Additional Bonds as follows:
(a) BLAIR WATER SYSTEM FUND —The entire gross revenues and
income derived from the operation of the Water System, including pledges and
appropriations from other sources, if any, shall be set aside as collected and
deposited in a separate fund designated as the "Blair Water System Fund." For
purposes of allocating the monies in the Blair Water System Fund, the City shall
maintain the following accounts: (1) Bond Payment Account; (2) Operation and
Maintenance Account; (3) Debt Service Reserve Account (with sub -accounts
therein); and (4) Retained Revenues Account.
(b) BOND PAYMENT ACCOUNT - Out of the Blair Water System
Fund there shall be credited monthly on or before the first day of each month to
the Bond Payment Account, commencing with the first day of the month
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following the month in which the Series 2018 Bond is issued (the "Initial
Deposit Date") to the Bond Payment Account, the following amounts:
(1) during the period from January 1, 2018, until and including
that June 30 or December 31 (as the case may be with respect to the
earliest occurring of such dates) which immediately follows the
"Initiation of Operation" (as defined in the NDEQ Contract; in this
Ordinance hereafter referred to as the "Initiation of Operation") of
the Project an amount such that if the same amount were credited on
the first day of each calendar month from such date of credit until the
next payment date upon which any amount falls due on the NDEQ
Note, whether for principal or interest, the amount accumulated by
such monthly credits would equal the amount falling due on such
payment date on the NDEQ Note, provided, however, that such
credits shall be required only as and to the extent that such payments
are not provided from other sources including amounts advanced by
NDEQ pursuant to the NDEQ Contract and the NDEQ Note;
(2) during the period from and including that January 1 or July 1
(as the case may be with respect to the earliest occurring of such
dates) which immediately follows the Initiation of Operation until the
NDEQ Note has been paid in full an amount equal to one-sixth of the
installment amount (principal and interest) due on the next
installment payment date for the NDEQ Note;
(3) During such periods and in such amounts, all such
payments as are as required under the terms of the Outstanding
Parity Bond Ordinances with respect to the principal and interest
on the Outstanding Bonds.
The City Treasurer is hereby authorized and directed, without further
authorization, to withdraw monies credited to the Bond Payment Account, or if
the monies in such Account are insufficient, then from the Debt Service Reserve
Account (as and to the extent that amounts are available in a sub -account therein
designated in the authorizing ordinance) and next from the Retained Revenues
Account, an amount sufficient to pay, when due, the principal of and interest on
the Series 2018 Bond, the Outstanding Bonds or any Additional Bonds and to
transfer the appropriate amounts due to the respective direct payees and the
respective paying agent (as the case may be) for each issue of the Series 2018
Bond, the Outstanding Parity Bonds and any issues of Additional Bonds on or
before each principal and interest payment date the respective paying agents or
direct payees (as may be applicable) for any issues of Additional Bonds, on or
before each principal and interest payment date. Upon the issuance of any
Additional Bonds pursuant to this Ordinance, appropriate additional credits to
the Bond Payment Account shall be provided for sufficient to pay principal and
interest on said Additional Bonds.
(c) OPERATION AND MAINTENANCE ACCOUNT - After any
credits required to be made by the foregoing subparagraph (b) have been made
in full, out of the Blair Water System Fund there shall be monthly credited into
the Operation and Maintenance Account such amounts as the City shall from
time to time determine to be necessary to pay the reasonable and necessary
expenses of operating and maintaining the Water System, and the City may
withdraw funds credited to the Operation and Maintenance Account as
necessary from time to time to pay such expenses. As an operational expense
the City shall pay any and all administrative fees required to be paid in
connection with the NDEQ Loan or due under the NDEQ Contract.
(d) DEBT SERVICE RESERVE ACCOUNT - Within the Debt
Service Reserve Account there shall be established separate sub -accounts for
each series of bonds payable on a parity with the Series 2018 Bond and the
Outstanding Bonds from the revenues of the Water System, as shall be deemed
appropriate by the Mayor and Council in connection with each such issue. In
view of the provisions of the NDEQ Contract, it is hereby determined that no
sub -account shall be established for the Series 2018 Bond. For the Series 2010B
Bonds, the Series 2010C Bonds, the Series 2012 Bonds, the Series 2016 Bonds
and the Series 2017 Bonds there have previously been established separate sub -
accounts in accordance with the terms of the Series 2010B/C Ordinance, the
Series 2012 Ordinance and the Series 2016 Ordinance into which there has been
deposited and shall be maintained amounts set under the terms of the Series
2010B/C Ordinance, the Series 2012 Ordinance and the Series 2016 Ordinance
which shall be maintained as the required balances, respectively, so long as any
of the Series 2010B Bonds, the Series 2010C Bonds, the Series 2012 Bonds, the
Series 2016 Bonds and the Series 2017 Bonds remain outstanding in accordance
with the terms of the Series 2010B/C Ordinance, the Series 2012 Ordinance and
the Series 2016 Ordinance. In issuing any series of Additional Bonds a separate
sub -account in the Debt Service Reserve Account shall be established for such
series of Additional Bonds under the terms of this Ordinance. The balance in
any such additional sub -account (which may be $0) may be funded from monies
on hand or from periodic deposits from revenues in the Blair Water System
Fund or from the proceeds of such Additional Bonds. Each sub -account in the
Debt Service Reserve Account shall be of equal standing with each other sub -
account in the Debt Service Reserve Account and available monies from the
Blair Water System Fund required to be credited to each such sub -account at
any time shall be allocated on a pro rata basis between sub -accounts then
requiring credits in accordance with the respective unpaid principal amounts
then outstanding for each such issue for which there is a sub -account requiring
credits. Each sub -account in the Debt Service Reserve Account shall constitute
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a separate fund held in trust by the City Treasurer for the separate benefit of the
issue of bonds for which it is established. Anything in this Subsection 4(d) to
the contrary notwithstanding, the amount required to be maintained in the Debt
Service Reserve Account or any sub -account therein shall not at any time
exceed the maximum amount permitted to be invested without yield restriction
under Section 148 of the Code or any successor provision or related statutory
limitation and applicable regulations of the United States Treasury Department.
(e) RETAINED REVENUES ACCOUNT Monies in the Blair Water
System Fund remaining after the credits required in the foregoing Subsections
(b), (c) and (d) shall be credited to the Retained Revenues Account. Monies in
the Retained Revenues Account may be used to make up any deficiencies in any
of the preceding Accounts, to retire any of the Series 2018 Bond, the
Outstanding Bonds or any Additional Bonds prior to their maturity, to pay
principal of and interest on any junior lien water system revenue bonds or notes
or to provide for any other lawful purpose of the City as directed by the Mayor
and City Council.
The provisions of this Section 4 shall require the City to maintain a set of books and records in
accordance with such accounting methods and procedures as are generally applicable to
municipal utility enterprises, which books and records shall show credits to and expenditures
from the several Accounts and sub -accounts required by this Section. Except as specified below
for the Debt Service Reserve Account, the City shall not be required to establish separate bank or
investment accounts for said Accounts. Monies credited to the Debt Service Reserve Account or
any sub -account therein shall, if maintained in a demand or time deposit account, be kept in a
separate account and not commingled with other City or Water System funds. If invested,
monies credited to the Debt Service Reserve Account or any sub -account therein may be
commingled with other City funds, including Water System funds, so long as the City maintains
books and records clearly identifying the specific investments, or portions thereof, which belong
to the Debt Service Reserve Account and specific sub -accounts therein. Monies in any of said
Accounts except the Debt Service Reserve Account may be invested in permissible investments
for a City of the class to which the City of Blair belongs as of the time of such investment.
Monies in the Debt Service Reserve Account or any sub -account therein may be invested in
Deposit Securities or in certificates of deposit, savings accounts or other interest bearing
accounts in banks which are members of the Federal Deposit Insurance Corporation, except that
whenever the amount so deposited exceeds the amount of the F.D.I.C. insurance available
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thereon, the excess shall be secured in the manner required by Section 16-715 R.R.S. Neb. 2012.
Investments made from or attributable, in whole or in part, to the Debt Service Reserve Account
shall mature or be redeemable at the option of the holder, without penalty, in not more than ten
years. Investments made from or attributable to the Bond Payment Account shall mature or be
redeemable at the option of the holder by no later than the time monies are required for payments
due from such account. Income from or profit realized from investment for any Account or sub -
account shall be credited to such Account or sub -account until such Account or sub -account
contains any amount then required to be therein, and thereafter such income or profit shall be
transferred to the Blair Water System Fund and treated as other revenues from the operation of
the Water System.
The pledge of the revenues and earnings of the Water System provided for in this
Ordinance for the Series 2018 Bond, the Outstanding Bonds and any Additional Bonds, subject
to the right of the City to issue Additional Bonds as provided in this Ordinance and the
Outstanding Parity Bond Ordinances, is intended as a first and prior pledge of, lien on and
security interest in such revenues and earnings for the payment of principal of and interest on the
Series 2018 Bond, the Outstanding Bonds and any Additional Bonds, superior to any pledge or
promise made with respect to any other indebtedness of the City as to its Water System, and is
intended to be a full exercise of the powers of the City provided for in Sections 18-1803 to 18-
1805, R.R.S. Neb. 2012, as amended, with respect to its Water System.
Section 5. So long as any of the Series 2018 Bond, the Outstanding Bonds and any
Additional Bonds issued pursuant to this Ordinance shall remain outstanding and unpaid, the
City covenants and agrees to establish, revise, from time to time as necessary, and collect such
rates and charges for the water and water service furnished from the Water System adequate to
produce revenues and earnings sufficient at all times:
(a) To provide funds to pay, when due, the principal of and interest on
the Series 2018 Bond, the Outstanding Bonds and any Additional Bonds issued
pursuant to this Ordinance.
(b) To pay all proper and necessary costs of operation and maintenance
of the Water System and to pay for the necessary and proper repairs,
replacements, enlargements, extensions and improvements to the Water System,
including payment as the same fall due of any administrative fees related to the
Series 2018 Bond as described in the NDEQ Contract.
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(c) To provide funds sufficient to make the credits into the Accounts
and at the times and in the amounts required by Section 4 of this Ordinance.
(d) To maintain Net Revenues in each fiscal year adopted by the City
for the Water System in an amount not less than 1.25 times the total amount of
principal paid or payable (exclusive of any principal redeemed prior to maturity
other than principal redeemed pursuant to a schedule of mandatory
redemptions) and interest falling due during such fiscal year on the Series 2018
Bond, the Outstanding Bonds and any Additional Bonds issued pursuant to this
Ordinance.
Section 6. To provide funds for any purpose related to the Water System, the City
may issue Additional Bonds (other than such Additional Bonds issued for refunding purposes as
may be governed by Section 7 of this Ordinance) payable from the revenues of the Water System
having equal priority and on a parity with the Series 2018 Bond, the Outstanding Bonds and any
Additional Bonds then outstanding, only upon compliance with the following conditions:
(a) Such Additional Bonds shall be issued only pursuant to an
ordinance which shall provide for an increase in the monthly credits into the
Bond Payment Account in amounts sufficient to pay, when due, the principal of
and interest on the Series 2018 Bond, the Outstanding Bonds and any
Additional Bonds then outstanding and the proposed Additional Bonds.
(b) The City shall have complied with one or the other of the two
following requirements:
1) The Net Revenues derived by the City from its Water
System for the fiscal year next preceding the issuance of the
Additional Bonds shall have been at least equal to 1.30 times
the Average Annual Debt Service Requirements of the
Series 2018 Bond, the Outstanding Bonds and any
Additional Bonds, all as then outstanding, and of the
proposed Additional Bonds; or
2) The City shall have received a projection made by a
consulting engineer or firm of consulting engineers, or by a
certified public accountant or film of certified public
accountants (either one of which shall be recognized as
having experience and expertise in municipal utility
systems) projecting that the Net Revenues of the Water
System in each of the three full fiscal years after the issuance
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of such Additional Bonds will be at least equal to 1.35 times
the Average Annual Debt Service Requirements of the
Series 2018 Bond, the Outstanding Bonds and any
Additional Bonds, all as then outstanding, and of the
proposed Additional Bonds. In making such projection, the
consulting engineer or accountant shall use as a basis the Net
Revenues of the Water System during the last fiscal year for
which an independent audit has been prepared and shall
adjust such Net Revenues as follows: (A) to reflect changes
in rates which have gone into effect since the beginning of
the fiscal year for which the audit was made, (B) to reflect
such engineer's or accountant's estimate of the net increase
over or net decrease under the Net Revenues of the Water
System for the fiscal year for which the audit was made by
reason of. (i) changes of amounts payable under existing
contracts for services; (ii) additional general income from
sales to customers under existing rate schedules for various
classes of customers or as such schedules may be revised
under a program of changes which has been adopted by the
Mayor and Council of the City; (iii) projected revisions in
costs for labor, wages, salaries, machinery, equipment,
supplies and other operational items; (iv) changes in the
amount of service to be supplied and any related
administrative or other costs associated with such changes
due to increased supply from the acquisition of any new
facility; (v) anticipated receipts from service to any
additional customer or customers for the Water System; and
(vi) such other factors affecting the projections of revenues
and expenses as the consulting engineer or accountant deems
reasonable and proper. Annual debt service on any proposed
Additional Bonds to be issued may be estimated by the
consulting engineer or certified public accountant in
projecting Average Annual Debt Service Requirements, but
no Additional Bonds shall be issued requiring any annual
debt service payment in excess of the amount so estimated
by the consulting engineer or certified public accountant in
any final projections furnished to the City.
If the City shall find it desirable it shall also have the right when issuing Additional Bonds to
combine with its Water System any other utilities of the City authorized to be combined under
Sections 19-1305 through 19-1308 or 18-1803 through 18-1805 R.R.S. Neb. 2012, and to cause
all of the revenues of such combined utilities systems to be paid into the Blair Water System
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Fund, which fund may be appropriately redesignated, and to provide that all of the Series 2018
Bond, the Outstanding Bonds and any Additional Bonds previously issued, all as then
outstanding, and the proposed issue of Additional Bonds shall be payable from the revenues of
such combined utilities and shall stand on a parity and in equality as to security and payment,
provided, however, no utility shall be combined with the Water System as contemplated in this
paragraph unless the conditions of subsection 6(a) shall have been satisfied and the Net
Revenues of the combined utilities systems shall satisfy one or the other of the requirements for
Additional Bonds provided in subsection 6(b) above. For purposes of meeting such requirements,
the definition of Net Revenues shall be altered to include the gross revenues of the additional
utility or utilities and to take into consideration ordinary expenses of operating and maintaining
the additional utility or utilities. In making any projections, the consulting engineer or certified
public accountant shall take into consideration the factors described in 6(b)(2) above with respect
to such additional utility or utilities. Net Revenues of the additional utility or utilities shall be
based upon the report or reports of independent certified public accountants in the same manner
as is required under subsection 6(b) above.
Section 7. The City may issue refunding bonds, which shall qualify as Additional
Bonds under this Section 7, to refund any of the Series 2018 Bond, the Outstanding Bonds or
Additional Bonds without compliance with the provisions of subsection 6(b) above, provided
that, if any such Series 2018 Bond, Outstanding Bonds or Additional Bonds are to remain
outstanding after the issuance of such refunding bonds, the principal payments due in any
calendar year in which those bonds which are to remain outstanding mature, or in any calendar
year prior thereto, shall not be increased over the amount of such principal payments due in such
calendar years immediately prior to such refunding.
The City may also issue refunding bonds which shall qualify as Additional Bonds of
equal lien to refund any of the Series 2018 Bond, the Outstanding Bonds or Additional Bonds
then outstanding, provided, that if any such Series 2018 Bond, Outstanding Bonds or Additional
Bonds then outstanding are to remain outstanding after the application of the proceeds of the
refunding bonds to the payment of the bonds which are to be refunded, such issuance must
comply with the Net Revenues test set forth in Subsection 6(b)(1) of this ordinance and, if the
proceeds of such refunding bonds are not to be applied immediately to the satisfaction of the
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bonds which are to be refunded, then such refunding bonds must provide by their terms that they
shall be junior in lien to all of the Series 2018 Bond, Outstanding Bonds and any Additional
Bonds outstanding at the time of issuance of such refunding bonds until the time of application
of their proceeds to the satisfaction of the bonds which are to be refunded. In computing
Average Annual Debt Service Requirements to show compliance with said Net Revenues test for
such refunding bonds, all payments of principal and interest due on such refunding bonds from
the time of their issuance to the time of application of the proceeds of such refunding bonds to
the satisfaction of the bonds which are to be refunded shall be excluded from such computation
to the extent that such principal and interest are payable from sources other than the revenues of
the Water System, such as bond proceeds or investment earnings on bond proceeds, or from
monies in the Retained Revenues Account, and all payments of principal and interest due on the
bonds which are to be refunded from and after the time of such application shall also be
excluded. For purposes of this paragraph of this Section 7, the time of application of the
proceeds of the refunding bonds to the satisfaction of the bonds which are to be refunded shall be
the time of deposit with the paying agent for such bonds which are to be refunded pursuant to
Section 10-126 R.R.S. Neb. 2012 (or any successor statutory provision thereto) or the time when
such bonds which are to be refunded under the terms of their authorizing ordinance or ordinances
are no longer deemed to be outstanding, whichever occurs sooner.
Section 8. The City hereby covenants and agrees that so long as any of the Series
2018 Bond, the Outstanding Bonds and any Additional Bonds are outstanding, it will not issue
any bonds or notes payable from the revenues of the Water System except in accordance with the
provisions of this Ordinance, provided, however, the City reserves the right to issue bonds or
notes which are junior in lien to the Series 2018 Bond, the Outstanding Bonds and any such
Additional Bonds with the principal and interest of such bonds or notes to be payable from
monies credited to the Retained Revenues Account as provided in Subsection 4(e). The term
"Additional Bonds" as used in this ordinance refers only to such bonds as are payable from the
revenues of the Water System on a parity with the Series 2018 Bond and the Outstanding Bonds,
all as outstanding from time to time, and are issued in accordance with the terms of said Sections
6 and 7.
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Section 9. So long as any of the Series 2018 Bond, the Outstanding Bonds or any
Additional Bonds are outstanding, the City hereby covenants and agrees as follows:
(a) The City will maintain the Water System in good condition and
will continuously operate the same in a reasonable and efficient manner, and the
City will punctually perform all the duties with reference to said system
required by the Constitution and statutes of the State of Nebraska, but this
covenant shall not prevent the City from discontinuing the use and operation of
all or any portion of the Water System so long as the revenues derived from the
City's ownership of the properties constituting the Water System shall be
sufficient to fulfill this City's obligations under Section 5 of this Ordinance.
(b) The City will not grant any franchise or right to any person, firm or
corporation to own or operate a water system in competition with that owned by
the City.
(c) The City will maintain insurance on the property constituting the
Water System (other than such portions of the system as are not normally
insured against loss by casualty) in the amounts and against the risks
customarily carried by similar utilities, but including fire and extended coverage
insurance in an amount which would enable the City to repair, restore or replace
the property damaged to the extent necessary to make the Water System
operable in an efficient and proper manner to carry out the City's obligations
under this Ordinance. The Mayor and Council shall annually, within one month
after the end of each fiscal year adopted by the City for the Water System
examine the amount of insurance carried with respect to the Water System and
shall evidence approval of such insurance by resolution. The proceeds of any
such insurance received by the City shall be used to repair, replace or restore the
property damaged or destroyed to the extent necessary to make the Water
System operable in an efficient and proper manner, and any amount of
insurance proceeds not so used shall be credited to the Retained Revenues
Account. In the event of any such insured casualty loss, the City may advance
funds to make temporary repairs or provide for an advance on costs of the
permanent repair, restoration or replacement from the Operation and
Maintenance Account and any such advances shall be repaid from insurance
proceeds received.
(d) The City will keep proper books, records and accounts separate
from all other records and accounts in which complete and correct entries will
be made of all transactions relating to the Water System. The City will have its
operating and financial statements relating to the Water System audited
annually by a certified public accountant or firm of certified public accountants.
The City will furnish to the original purchaser of the Series 2018 Bond and the
original purchasers of the Outstanding Bonds and to the original purchaser or
16
purchasers of each series of Additional Bonds issued hereunder, within six
months after the end of each fiscal year of the Water System, a copy of the
financial statements of the Water System and the report thereon of the certified
public accountants.
(e) The City shall cause each person handling any of the monies in the
Blair Water System Fund to be bonded by an insurance company licensed to do
business in Nebraska in an amount or amounts deemed sufficient to cover at all
times the maximum amount of money belonging to the Water System in the
possession or control of any such person. The amount of such bond or bonds
shall be fixed by the Mayor and Council and the costs thereof shall be paid as an
operating and maintenance expense from the Operation and Maintenance
Account.
(f) So long as the City is current with all payments or credits required
to be made under Section 4 hereof and is also in compliance with the covenants
of Section 5 hereof, the City may pay for water service used by it at such rate or
rates as shall be determined by the Mayor and Council. In the event that the City
is not in compliance with the provisions of said Sections 4 and 5 hereof, the
City shall be required to pay for water service used by it at the rate or rates
applicable to such usage as fixed by the City's water rate ordinances then in
effect.
(g) The City agrees that so long as the Series 2018 Bond and/or the
Outstanding Bonds are outstanding and unpaid it will keep in force and effect
the Cargill Contract, during the stated term thereof, and will not amend the
provisions thereof in any manner which reduces amounts payable thereunder to
any level which would cause the City to be in violation of the provisions of
Section 5 of this Ordinance.
Section 9. The City's obligations under this Ordinance and the liens, pledges, covenants
and agreements of the City herein made or provided for, shall be fully discharged and satisfied as
to the Series 2018 Bond or any Additional Bonds issued pursuant to this ordinance and any such
bonds shall no longer be deemed outstanding hereunder if such bonds shall be been purchased
and canceled by the City, or when payment of the principal of and interest thereon to the
respective date of maturity or redemption (a) shall have been made or caused to be made in
accordance with the terms thereof, or (b) shall have been provided for by depositing with a
national or state bank having trust powers or trust company, in trust solely for such payment (1)
sufficient money to make such payment and/or (2) Deposit Securities in such amount and
bearing interest at such rates and payable at such time or times and maturing or redeemable at
17
stated fixed prices at the option of the holder as to principal at such time or times as will ensure
the availability of sufficient money to make such payment; provided, however, that with respect
to any bond to be paid prior to maturity, the City shall have duly given notice of redemption of
such bond as required by this Ordinance or given irrevocable instructions for the giving of such
notice. Any such money so deposited with such Paying Agent and Registrar or bank or trust
company in excess of the amount required to pay principal of and interest on the bonds for which
such monies were deposited, shall be paid over to the City as and when collected. For purposes
of this Section 9, any Deposit Securities shall be non -callable or callable only at the option of the
holder. With respect to any deposit made for purposes of satisfying the Series 2018 Bond under
this Section 9, there shall be furnished to NDEQ and the Nebraska Investment Finance Authority
("NIFA") an opinion of nationally recognized bond counsel that such deposit for payment of the
Series 2018 Bond will not adversely affect the exclusion for interest from gross income for federal
tax purposes on any bonds issued by NIFA to provide funds for deposit into the Nebraska Drinking
Water Facilities Loan Fund and the furnishing of such opinion shall be a condition required to be
satisfied prior to the making of any such deposit in trust for payment and satisfaction with respect to
the Series 2018 Bond unless the Series 2018 Bond is to be prepaid and redeemed within 60 days
from the time of such deposit.
Section 10. The terms and provisions of this Ordinance do and shall constitute a
contract between the City of Blair and the holder of the Series 2018 Bond and no changes,
variations or alterations of any kind, except for changes necessary to cure any ambiguity, formal
defect or omission, shall be made to this Ordinance without the written consent of the holder of
the Series 2018 Bond. The holder of the Series 2018 Bond may, either in law or in equity, by
suit, action, mandamus or other proceeding, enforce or compel performance of any and all of the
acts and duties required by this Ordinance, and any court of competent jurisdiction may, after
default in payment of principal or interest or performance of any other obligations under this
Ordinance, on application of any such holder, appoint a receiver to take charge of the Water
System and operate the same and apply the earnings thereof to the payment of the principal of
and interest on bonds issued pursuant to this Ordinance in accordance with the provisions hereof,
the provisions of the Outstanding Parity Bond Ordinances and any ordinance authorizing
Additional Bonds.
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Section I L The Mayor and City Clerk of the City are hereby authorized to do all
things and execute all such documents as may by them be deemed necessary and proper to
complete the issuance and sale of the Series 2018 Bond as contemplated by this Ordinance.
Section 12. If any section, paragraph, clause or provision of this Ordinance shall be held
invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the
other provisions of this Ordinance.
Section 13. The Mayor and Council hereby expressly declare the intent and understanding
that interest on the Series 2018 Bond shall not be excludable from gross income under the terms of
Section 103 of the Internal Revenue Code of 1986, as amended, and the City as issuer shall not file
any information report with respect to the issuance of the Series 2018 Bond pursuant to Section
149(e) of said Code.
Section 14. All ordinances, resolutions or orders or parts thereof in conflict with the
provisions of this Ordinance are to the extent of such conflict hereby repealed.
Section 15. This Ordinance shall be published in pamphlet form and take effect as
provided by law.
PASSED AND APPROVED this 27th day of March, 2018.
ATTEST:
Brenda Wheeler, City Clerk
(SEAL)
19
J Realph, Mayor
Exhibit "A"
NDEQ Note
Exhibit "B"
NDEQ Contract
LOAN AGREEMENT
(Governmental Borrower)
Between the
NEBRASKA DEPARTMENT OF ENVIRONMENTAL QUALITY
And
CITY OF BLAIR, NEBRASKA
NDEQ PROJECT NO: D311619
DATED AS OF May 10, 2018
NEBRASKA DRINKING WATER FACILITIES LOAN FUND
LOAN AGREEMENT
THIS LOAN AGREEMENT No. D311619 (the "Loan Agreement"), is entered into by and between the
STATE OF NEBRASKA, acting by and through the Nebraska Department of Environmental Quality ("NDEQ")
and the CITY OF BLAIR, NEBRASKA (the "Borrower").
WITNESSETH:
WHEREAS, the federal Safe Drinking Water Act, including the Safe Drinking Water Amendments
Act of 1996, as amended (the "Federal Act") established a state revolving fund program and, to fund the
state revolving fund program, the United States Environmental Protection Agency ("EPA") will make annual
capitalization grants to the states under CFDA #66.468, (Safe Drinking Water State Revolving Fund), on the
condition that each state provide an appropriate match for such state's revolving fund; and
WHEREAS, Neb. Rev. Stat. §71-5318 empowers the Director of NDEQ to loan available funds in the
Loan Fund (as defined herein) to borrowers pursuant to the Drinking Water State Revolving Fund Act, Neb.
Rev. Stat. §71-5314 to 71-5327, as amended (the "Act"), and rules and regulations adopted under such Act;
and
WHEREAS, under the Act, the Director of NDEQ is given the responsibility for administration and
management of the Loan Fund; and
WHEREAS, the Nebraska Investment Finance Authority ("NIFA") is authorized under Neb. Rev. Stat.
§ 58-201 et seq. and the Act to issue revenue bonds for the purpose of providing funds for NDEQ to loan to
Borrowers within the State of Nebraska for the acquisition, construction, improvement, repair, rehabilitation or
extension of safe drinking water projects (as defined in the Act), in order to provide the state match
requirements of the Federal Act; and
WHEREAS, pursuant to such authorization, NIFA proposes to issue from time to time its Drinking
Water State Revolving Loan Fund revenue bonds for the purpose of providing funds to NDEQ to loan to
persons owning or operating Public Water Systems in Nebraska to pay those eligible portions of the costs of
acquiring, constructing, improving, repairing, rehabilitating or extending safe drinking water projects (as
defined in the Act), in order to provide the state match requirements of the Federal Act; and
WHEREAS, NDEQ may from time to time enter into a pledge agreement with NIFA (the "Pledge
Agreement"), pursuant to which NDEQ will pledge the interest portion of Loan Repayments (as defined
herein) and certain other revenues to NIFA for the payment of the principal of, redemption premium, if any,
and interest on Drinking Water State Revolving Fund Revenue Bonds which may be issued by NIFA from
time to time; and
WHEREAS, the Borrower is an "owner" as defined in Neb. Rev. Stat. § 71-5316(7); and
WHEREAS, the project to be financed under this Loan Agreement and described in Exhibit 1 (the
"Project") is a safe drinking water project as defined in Neb. Rev. Stat. § 71-5316(9); and
WHEREAS, the project costs (as hereinafter defined) are based upon estimates of the Borrower and
at times during or at completion of construction the loan amount may be adjusted by NDEQ pursuant to
Section 2.01 of this Loan Agreement; and
WHEREAS, the project is included in the most recent Drinking Water State Revolving Fund Intended
Use Plan developed by NDEQ and approved by the Nebraska Environmental Quality Council and EPA; and
WHEREAS, NDEQ has approved the Borrower's application for a loan from federal funds and state
match funds if and when received by and made available to NDEQ pursuant to the Federal Act and the Act to
finance Project Costs;
2
NOW, THEREFORE, for and in consideration of the award of this Loan Agreement by NDEQ, the
Borrower agrees to complete its Project and to perform under this Loan Agreement in accordance with the
conditions, covenants and procedures set forth below:
Article I
DEFINITIONS
The following terms as used in this Loan Agreement shall, unless the context clearly requires otherwise,
have the following meanings:
"Act' means the Drinking Water State Revolving Fund Act, Neb. Rev. Stat. §71-5314 to 71-5327, as
amended.
"Additional Revenue Obligations" means any obligation for the payment of money undertaken by the
Borrower which is payable from or secured by a pledge of, or lien upon, the System Revenues incurred after
the date of execution and delivery of this Loan Agreement, and all Existing Revenue Obligations.
"Authorized Representative" means the person or persons authorized pursuant to a resolution or
ordinance of the governing body of the Borrower to perform any act or execute any document relating to this
Loan Agreement.
"Borrower" means City of Blair, Nebraska that is a party to and is described in the first paragraph of
this Loan Agreement, and its successors and assignees.
"Cut-off Date" means the date established by NDEQ at the Project's final inspection prior to which
the Borrower will make the final disbursement request for eligible Project Costs.
"Due Date" means the dates specified for payment of principal and interest on the Loan as specified
in Section 2.04.
"Event of Default' means any occurrence of the following events:
(a) Failure by the Borrower to pay, or cause to be paid, any Loan Repayment required to
be paid hereunder when due.
(b) Failure by the Borrower to observe and perform any duty, covenant, obligation or
agreement on its part to be observed or performed under this Loan Agreement, other than as referred to in
paragraph (a) of this definition, which failure shall continue for a period of 30 days after written notice,
specifying such failure and requesting that it be remedied, is given to the Borrower by NDEQ, unless NDEQ
shall agree in writing to an extension of such time prior to its expiration. If the failure stated in such notice is
correctable but cannot be corrected within the applicable period, NDEQ may not unreasonably withhold its
consent to an extension of such time up to 90 days from the delivery of the written notice referred to above, if
corrective action is instituted by the Borrower within the applicable period and diligently pursued until the
Event of Default is corrected.
(c) Failure by NDEQ to observe and perform any duty, covenant, obligation or agreement
on its part to be observed or performed under this Loan Agreement which shall continue for a period of
30 days after written notice, specifying such failure and requesting that it be remedied, is given to NDEQ by
the Borrower, unless the Borrower shall agree in writing to an extension of such time prior to its expiration. If
the failure stated in such notice is correctable but cannot be corrected within the applicable period, the
Borrower may not unreasonably withhold its consent to an extension of such time up to 90 days from the
delivery of the written notice referred to above if corrective action is instituted by NDEQ within the applicable
period and diligently pursued until the Event of Default is corrected.
(d) The discovery that any representation made by or on behalf of the Borrower in this
Loan Agreement, or in any instrument furnished in compliance with or with reference to this Loan Agreement
or the Loan, is false or misleading in any material respect.
(e) The discovery that any representation made by or on behalf of NDEQ in this Loan
Agreement, or in any instrument furnished in compliance with or with reference to this Loan Agreement, is
false or misleading in any material respect.
(f) The filing of a petition by or against the Borrower under any federal or state bankruptcy
or insolvency law or other similar law in effect on the date of this Loan Agreement or thereafter enacted,
unless, in the case of any such petition filed against the Borrower, such petition is dismissed within 30 days
after such filing and such dismissal shall be final and not subject to appeal.
(g) Failure of the Borrower generally to pay its debts as such debts become due.
(h) Any event of default under any Existing Revenue Obligation or Additional Revenue
Obligation of the Borrower.
"Existing Revenue Obligation" means any obligation for a payment of money undertaken by the
Borrower which is payable from or secured by a pledge of, or lien upon, the System Revenues existing or
outstanding at the time of execution and delivery of this Loan Agreement by the Borrower. For purposes of
this Loan Agreement, Existing Revenue Obligation(s) shall include: the Borrower's SRF Loan 2010, Dated
June 15, 2010, issued pursuant to Ordinance No. 2186, in the original drawable principal amount of
$2,341,200, owing to NDEQ; the Borrower's 2010B Revenue Bonds, Dated September 28, 2010, issued
pursuant to Ordinance No. 2191, in the original principal amount of $6,500,000, of which the principal amount
of $6,500,000 remains outstanding and unpaid; the Borrower's 2010C Revenue Bonds (Taxable Interest),
Dated September 28, 2010, issued pursuant to Ordinance No. 2191, in the original principal amount of
$770,000, of which the principal amount of $390,000 remains outstanding and unpaid; the Borrower's Water
System Revenue Bond, Series 2012, issued pursuant to Ordinance No. 2217, Dated June, 5, 2012, in the
original principal amount of $9,480,000, of which the principal amount of $7,860,000 remains outstanding
and unpaid; the Borrower's Water System Revenue Bond, Series 2016, issued pursuant to Ordinance No.
2305, Dated August 24, 2016, in the original principal amount of $5,550,000, of which the principal amount of
$5,550,000 remains outstanding and unpaid; the Borrower's Water System Revenue Bond, Series 2017,
issued pursuant to Ordinance No. 2305, Dated March 28, 2017, in the original principal amount of
$3,460,000, of which the principal amount of $3,460,000 remains outstanding and unpaid, all as of the date
of this Loan Agreement.
"GAAP" means generally accepted accounting principles as applicable to the Public Water System.
"Indebtedness" means any financial obligation of the Borrower evidenced by an instrument executed
by the Borrower, including this Loan, Existing Revenue Obligations, Additional Revenue Obligations, general
obligation bonds or notes, leases or lease -purchase agreements or similar financial transactions.
"Initiation of Operation" means the date on which the Borrower places the Project in operation or the
Project is capable of being placed in operation for the purposes for which it was planned, designed and built.
"Late Payment" means any payment that is not received within 15 days of the due date.
"Loan" means the loan made by NDEQ to the Borrower to finance or refinance all or a portion of the
Project Costs pursuant to this Loan Agreement.
"Loan Agreement" means this Loan Agreement, including the Attachments hereto, as it may be
properly supplemented, modified or amended.
4
"Loan Amount" means the actual principal amount (not to exceed the amount specified in
Section 2.01 hereof) of the Loan which NDEQ disburses to the Borrower pursuant to this Loan Agreement.
"Loan Fund" means the Drinking Water Facilities Loan Fund created pursuant to Neb. Rev. Stat.
§ 71-5318(1).
"Loan Repayments" means the payments of the Loan required to be made by the Borrower pursuant
to Section 2.05 of this Loan Agreement.
"Loan Terms" means the terms of this Loan Agreement provided in Article II of this Loan Agreement.
"NDEQ" means the Nebraska Department of Environmental Quality established pursuant to Neb.
Rev. Stat. § 81-1501 et seq., as amended.
"NIFA" means the Nebraska Investment Finance Authority, a public body politic and corporate and
an instrumentality of the State, and its successors and assigns established pursuant to Neb. Rev. Stat. §
58-201 et seq., as amended.
"Note" means a promissory note of the Borrower with respect to the Loan in the form of Attachment
F to this Loan Agreement.
"Ordinance" means Ordinance No. 2351 passed and approved by the governing body of the Borrower
on March 27, 2018, as the same may be amended from time to time.
"Project" means the acquisition, construction, improvement, repair, rehabilitation or extension of the
Public Water System, including land, owned or operated by the Borrower and described in Exhibit 1 to this
Loan Agreement, which constitutes a safe drinking water project for which NDEQ is making a Loan to the
Borrower pursuant to this Loan Agreement.
"Project Costs" means costs or expenses necessary or incident to the Project which are directly
attributable thereto and which in the determination of NDEQ are eligible under the Act and the Federal Act.
Project Costs are described in Attachment B.
"Public Water System" means a Public Water System, as defined in Neb. Rev. Stat. § 71-5301(10a).
"Regulations" means Title 131, Nebraska Department of Environmental Quality, and any
amendments thereto promulgated by NDEQ pursuant to the Act.
"Retainage" means construction costs held back by the Borrower from the payments due to the
contractor to assure satisfactory completion of the construction contract.
"Revenue Obligation(s)" means (a) the Loan; (b) any revenue bonds of the Borrower outstanding
from time to time and payable from, or secured by a pledge of or lien upon, System Revenues; and (c) any
capital leases entered into by the Borrower the rentals of which are payable from, or secured by a pledge of
or lien upon, System Revenues.
"SEC Rule" means Rule 15c2-12 adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as such rule may be amended from time to time or such other similar rule
regarding disclosure of information in securities transactions.
"State" means the State of Nebraska acting, unless otherwise specifically indicated, by and through
NDEQ and its successors and assigns.
"System Revenues" means the revenues derived by the Borrower from the fees and charges for the
use and services furnished by or through the Borrower's Public Water System.
"Trustee" means the trustee under any trust indenture with respect to the revenue bonds the
proceeds of which are deposited in the Loan Fund.
"User Charge System" means the methodology used to assess user charge fee(s) for the users of
the Public Water System owned or operated by the Borrower.
Article 11
LOAN CONDITIONS AND TERMS
Section 2.01. Amount of the Loan. Subject to all of the terms, provisions and conditions of this
Loan Agreement, and subject to the availability of State and federal funds, NDEQ will loan an amount not to
exceed one million four hundred thousand dollars ($1,400,000) to the Borrower to pay a portion of the Project
Costs. This Loan also includes DWSRF Loan Forgiveness of up to two hundred ten thousand dollars
($210,000). The forgiveness of a portion of the principal of the Loan, if any, shall be effective only upon the
completion of the Project in accordance with this Loan Agreement, including compliance with the
requirements of DWSRF, as determined by NDEQ, and Initiation of Operation. The amount of such Loan
Forgiveness shall be stated on the final Attachment A repayment schedule prepared by NDEQ following
disbursement of the full Loan Amount and Initiation of Operation. The actual amount of the Loan (and any
Loan Forgiveness) may be reduced without revision of any other terms, provisions or conditions of this Loan
Agreement, other than adjustment by NDEQ to the Loan Repayment Schedule set forth in Attachment A
hereto, to reflect the Loan Amount (and any amount of Loan Forgiveness), based upon reductions in the
actual total Project Costs as determined following the completion of construction of the Project. The
Borrower must make provision for the payment of all costs exceeding the Loan Amount, provided that the
Borrower may request that NDEQ provide supplemental loan funds through a separate loan agreement, the
approval of which shall be dependent on availability of unobligated funds in the Loan Fund and NDEQ's
subsequent written approval of such request in its sole discretion upon such additional terms, conditions and
covenants as NDEQ may then require.
Section 2.02. Term of the Loan. The Borrower agrees to begin repayment of principal and interest
on the Loan Amount within one year from the date of Initiation of Operation, but no later than three years
from the date of the Loan, whichever occurs first, and to repay such Loan in full no later than 30 years from
Initiation of Operation and to pay all principal, interest, administrative fees and penalty fees when due.
Section 2.03. Interest Rate. The interest rate on the Loan Amount is determined by NDEQ
pursuant to Regulations and the Intended Use Plan. The interest rate on this loan amount disbursed to the
Borrower pursuant to this Loan Agreement during the period of construction shall be 2.0% and after the date
of Initiation of Operation shall be 2.0% per annum (calculated on the basis of a year equaling 360 days made
up of 12 months of 30 days each). For the purposes of this paragraph "construction" shall mean the period
between the date of this Loan Agreement and the date of Initiation of Operation.
Section 2.04. Disbursement of Loan. Upon receipt of a disbursement request for work completed
accompanied by any certification from the Borrower required by NDEQ, NDEQ shall make progress
disbursements that correspond to such request of the Loan Amount to be used by the Borrower for Project
Costs. The Borrower may obtain a copy of the disbursement record upon request to NDEQ. Each
disbursement shall be upon warrant by the State and shall be equal to that portion of the unobligated
principal of the Loan Amount incurred for Project Costs to the date of the request for disbursement from the
Borrower. Submitted requests for disbursement must be supported by proper invoices for Project Costs, a
certificate of the Authorized Representative to the effect that all representations made in this Loan
Agreement remain true as of the date of the request and that no adverse developments affecting the
financial condition of the Borrower or its ability to complete the Project or to repay the Loan have occurred
since the date of this Loan Agreement, and other documentation acceptable to and approved by NDEQ.
Disbursement requests should be submitted before the first or the fifteenth of each month to facilitate timely
processing. All disbursement requests must be made prior to the Cut-off Date established by NDEQ.
Al
The Borrower may request disbursement of the Loan Amount for eligible Project Costs, when such
Project Costs have been incurred and are due and payable to project contractors. However, actual payment
of such Project Costs by the Borrower is not required as a condition of a payment request. Disbursement
requests will be processed on or about the fifth and twentieth day of each month. Any Retainage withheld by
the Borrower corresponding to the progress payment made to any contractor will be withheld by NDEQ until
such Retainage is either reduced or released to the contractor by the Borrower.
The Borrower shall submit a draft of the operation and maintenance manual for the Project to
Nebraska Department of Health and Human Service, Division of Public Health (NDHHS-DPH) before
disbursements exceed 75% of the Project Costs. The Borrower shall submit a final operation and
maintenance manual to NDHHS-DPH and receive approval before disbursements exceed 95% of the Project
Costs or final disbursement, whichever comes first.
Section 2.05. Loan Payments.
(a) Principal and Interest Payments. The Borrower shall pay to the NDEQ, or at the
direction of the NDEQ, to NIFA or the Trustee on or before the due dates specified below, but only from the
sources specified in Section 3.02 hereof, appropriate installments of principal and interest until all principal
and interest due on the Loan to the NDEQ has been paid in full. For administrative fee payments see
Section 2.06. Installments of principal and interest shall be paid semiannually on December 15 and June 15
of each year in accordance with the Loan Repayment Schedule in Attachment A; provided that, following the
receipt of the Initiation of Operation date and the final disbursement of Loan proceeds to the Borrower, a
revised final Attachment A shall be prepared by NDEQ to establish the final debt service schedule based
upon the parameters described in the projected Attachment A. Such revised final Attachment A thereafter
shall be deemed to be incorporated herein by reference and made a part hereof and shall supersede and
replace the projected Attachment A.
NDEQ will send the Borrower an invoice for each required payment at least 30 days prior to the due
date. When a Loan disbursement occurs after invoices are mailed, NDEQ will include adjustments for
interest and fee charges on the next semiannual invoice.
(b) Optional Prepayment of the Loan. The Borrower may not prepay the Loan, together
with any accrued interest in whole or in part within 5 years of the Loan Date if the Borrower has received
Loan Forgiveness as part of this Loan Agreement. After 5 years, the Borrower may make a partial
prepayment of the Loan Amount only if the prepayment amount is greater than the lesser of 10% of the
outstanding Loan Amount or $50,000. NDEQ shall prepare a new Loan Repayment Schedule to revise
Attachment A following receipt of any partial prepayment of the Loan, and such revised Attachment A
thereafter shall be deemed to be incorporated herein by reference and made a part hereof and shall
supersede and replace Attachment A.
(c) Mandatory Prepayment of Loan. If the Borrower receives a grant from any source for
any portion of the Project Costs for which a portion of the Loan Amount has been disbursed and is
outstanding under this Loan Agreement, such portion of the Loan Amount shall become immediately due and
payable.
(d) Delinquent Payment Penalty and Penalty Interest. Payments shall be considered
delinquent if not received within 15 days of the due date and for any such delinquent payment, the Borrower
agrees to pay a 5% administrative penalty of said delinquent payment. In addition, the Borrower agrees to
pay penalty interest on any such delinquent payment at the rate of 1 % per month of the amount of such
delinquent payment from and after the due date until it is paid.
Section 2.06. Administrative Fee. The Borrower shall pay to the NDEQ, or at the direction of
NDEQ, to NIFA or the Trustee, an administrative fee of 0.5% per annum to be paid in installments on June
15 and December 15. The Administrative fee is waived for the first year after the date the loan agreement
was signed. After the first year, the loan amount outstanding accumulated during the first year, begins to
accrue. Any disbursements after the first year, begins to accrue the administrative fee from the date of the
disbursement. After receipt of Initiation of Operation date and the final disbursement, a revised final
Attachment A shall be prepared to establish the debt service schedule pursuant to Section 2.05. Such
revised final Attachment A thereafter shall be deemed to be incorporated herein by reference and made a
part hereof and shall supersede and replace the projected Attachment A.
Section 2.07. Project Schedule. The Borrower agrees to perform steps of the Project in
accordance with the following schedule of milestone dates:
(a) April, 2018, Loan date
(b) June, 2018, Construction start
(c) November, 2019, Initiation of Operation
(d) March, 2020, Substantial completion of construction
Section 2.08. Disadvantaged Business Enterprises. The Borrower agrees that 10% of the Loan
Amount shall be the objective for proposed Disadvantaged Business Enterprises (Small Business
Enterprise/Minority Business Enterprise/Women's Business Enterprise/Small Business Rural Area), including
Historically Black Colleges and Universities ("DBE/HBCU") subagreement work under this Loan Agreement.
The Borrower shall take affirmative steps to assure that small, minority and women's businesses pursuant to
40 C.F.R. 31.36(e) and small businesses in rural areas pursuant to 13 C.F.R. 121.2 are used when possible
as sources of supplies, construction and services. Affirmative steps shall include the following:
(a) Placing disadvantaged business enterprises, including minority, women's, small
businesses and small businesses in a rural area and historically black colleges and universities on
solicitation lists;
(b) Assuring that disadvantaged business enterprises and historically black colleges and
universities are solicited whenever they are potential sources;
(c) Dividing total requirements, when economically feasible, into smaller tasks or quantities
to permit maximum participation by disadvantaged business enterprises;
(d) Establishing delivery schedules, where the requirement permits, which encourage
participation by disadvantaged business enterprises;
(e) Using the services and assistance of the Small Business Administration and Minority
Business Development Agency of the United States Department of Commerce; and
(f) Requiring the prime contractor to take the affirmative steps listed above.
In addition, the Borrower agrees to submit to NDEQ a completed EPA form 5700-52A within 15 days
after the end of each federal fiscal quarter during which the Borrower or its contractors award any
subagreements to a disadvantaged business enterprise for building and building -related services and
supplies.
Section 2.09. Public Water System Ordinances/User Charge Systems The Borrower agrees to
adopt and implement such changes to its Public Water System Ordinance/User Charge System as
determined by NDEQ from time to time to be necessary to comply with the Regulations. The Borrower
agrees that it shall not modify or amend or make additions to or deletions from its Public Water System
Ordinance/User Charge System without the consent of NDEQ during the term of this Loan Agreement,
provided, however, that any increase in rates and charges necessary or deemed necessary by the governing
body of the Borrower in order to comply with the provisions of any ordinance or any other agreement relating
to any Existing Revenue Obligations for which the System Revenues have been pledged or any increase
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deemed necessary by the governing body of the Borrower in order to permit the issuance of or provide for
the payment of Additional Revenue Obligations may be made without the consent of NDEQ.
Section 2.10. Other Conditions and Terms.
(a) Engineering Services. The Borrower shall provide and maintain competent and
adequate engineering supervision and resident inspection during construction.
(b) Construction Contract Award. The Borrower shall obtain NDEQ concurrence and
authorization prior to award of the construction contract.
(c) Initiation of Operation. The Borrower shall provide written notification to NDEQ of the
date of Initiation of Operation of the Project. On failure of the Borrower to set an acceptable Initiation of
Operation date NDEQ will look at the construction record or placement into service date and set the Initiation
of Operation date.
(d) Construction Completion. The Borrower shall provide written notification to NDEQ of
the construction completion date of the Project.
(e) Capacity Development. The Borrower agrees to maintain a system of records for
annual review and reporting of technical, managerial, and financial capacity of the Public Water System to
demonstrate continued compliance with the requirements of the Nebraska Safe Drinking Water Act as
provided under Title 179 NAC2 and the requirements of an operating permit, as issued by the Nebraska
Department of Health and Human Services Regulation and Licensure effective October 1, 1999 for new
community water supply systems, and October 1, 2000 for existing community water supply systems.
(f) Contractor's Security. The Borrower agrees to require any contractor of the Project to
post separate performance and payment bonds or other security approved by NDEQ in the amount of the
bid.
(g) Certified Operator. The Borrower agrees to provide a certified operator pursuant to
Title 179 NAC2 Regulations Governing Public Water Systems.
(h) Site Title and Easements. The Borrower must certify that site title, including all
easements and rights-of-way necessary to allow construction of the Project, has been obtained prior to
award of the construction contract (i.e., all real property has been acquired, bona fide options have been
taken or formal condemnation proceedings have been initiated for necessary real property).
(i) Contractor's Payments. The Borrower agrees to make prompt payment to its
contractor(s) of sums due for construction and to retain only such amounts as may be justified by specific
circumstances and provisions of the construction contract.
(j) Bid Solicitation. The Borrower agrees that all bid solicitations will include the following
statement:
The prospective participants must certify by submittal of EPA Form 5700-49 "Certification
Regarding Debarment, Suspension and Other Responsibility Matters" that, to the best of its knowledge and
belief, it and its principals are not presently debarred, suspended, proposed for debarment, declared
ineligible or voluntarily excluded from covered transactions by any federal department or agency. Recipients
may access suspension and debarment information at the System for Award Management (SAM). This
system allows recipients to perform searches determining whether an entity or individual is excluded from
receiving Federal assistance.
(k) Debarment or Suspension. The Borrower acknowledges that doing business with
any party appearing in the "List of Parties Excluded from Federal Procurement or Non Procurement
Programs may result in disallowance of federal funds under this Loan Agreement and may also result in
suspension or debarment under 40 C.F.R. Part 32.
(1) Other Federal Requirements. The Borrower agrees to comply with other applicable
Federal Requirements in Attachment D hereto.
(m) Project Sign. The Borrower agrees to display the project sign if provided by NDEQ.
The sign will remain the property of NDEQ and will be retrieved soon after project completion. The Borrower
will remove the sign for NDEQ when requested.
(n) Employment under Public Contracts, LB 403. The Borrower agrees to comply with
the provisions of LB403, approved by the Governor April 8, 2009. The following language is required and will
be included in all contracts made with contractors and is a pass through requirement for his or her
subcontractors.
"The Contractor is required and hereby agrees to use a federal immigration verification system to
determine the work eligibility status of new employees physically performing services within the State
of Nebraska. A federal immigration verification system means the electronic verification of the work
authorization program authorized by the Illegal Immigration Reform and Immigrant Responsibility Act
of 1996, 8 U.S.C. 1324a, known as the E -Verify Program, or an equivalent federal program
designated by the United States Department of Homeland Security or other federal agency
authorized to verify the work eligibility status of a newly hired employee. If the Contractor is an
individual or sole proprietorship, the following applies: 1. The Contractor must complete the United
States Citizenship Attestation Form, available on the Department of Administrative Services website
at www.das.state.ne.us; 2. If the Contractor indicates on such attestation form that he or she is a
qualified alien, the Contractor agrees to provide the US Citizenship and Immigration Services
documentation required to verify the Contractor's lawful presence in the United States using the
Systematic Alien Verification for Entitlements (SAVE) Program; and, 3. The Contractor understands
and agrees that lawful presence in the United States is required and the Contractor may be
disqualified or the contract terminated if such lawful presence cannot be verified as required by Neb.
Rev. Stat. §4-108."
(o) Prevailing Wage. All laborers and mechanics employed by contractors and sub
contractors on projects funded directly by or assisted in whole or in part by and through the Federal
Government pursuant to the Public Law 111-88 shall be paid wages at rates not less than those prevailing on
projects of a character similar in the locality as determined by the Secretary of Labor in accordance with
subchapter IV of chapter 31 of title 40, United States Code. With respect to the labor standards specified in
this section, the Secretary of Labor shall have the authority and functions set forth in Reorganization Plan
Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C.App.) and section 3145 of title 40, United States Code.
The Borrower is responsible to insure compliance with the prevailing wage requirements and will
include the following information in the contract documents:
Contractors and subcontractors on USEPA federally assisted construction projects are required to
pay their laborers and mechanics not less than those established by the U.S. Department of Labor. A
current wage decision containing the appropriate building and/or heavy type rates shall be included in the
specifications. In addition, labor standard provisions, Davis Bacon and Related Acts, for federally assisted
contracts shall be placed in the federal assurances of project specifications.
If an areawide decision or classification does not exist for the type of work to be performed, building
or heavy, a decision or request for authorization of additional classification and rate must be requested from
the Labor Department using the Standard Form 1444, Request for Authorization of Additional Classification
and Rate available on the web at: www..qsa.,qov/portal/forms/download/l 15906. These types of decisions or
classifications are project specific, i.e. they are applicable only to the project for which they are requested
and may not be used on any other project. Project decisions generally have an expiration date of 180 days
after the date of issuance. Modifications or reissued decisions are applicable to a project if received by
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NDEQ not less than 10 days prior to bid opening. Modifications to classification and wage rates after bid
opening shall be paid to all workers performing work in the new or modified classification from the first day on
which work is performed in the additional classification as approved by the Administrator of the Wage and
Hour Division, Employment Standards Administration, US Department of Labor.
Weekly Payrolls shall be submitted by the contractor to the Borrower or the Borrower's
representative utilizing the Department of Labor Form WH -347. A webform which can be completed on-line
is found at www dol -gov/whd/forms/wh347.pdf. Instructions are also found on-line. The Borrower may also
be required to submit copies of the Weekly Payrolls to NDEQ. As to each payroll copy received, the
Borrower shall provide written confirmation on a form supplied by NDEQ indicating whether or not the project
is in compliance with the requirements of 29 CFR 5.5(a)(1) based on the most recent payroll copies for the
specified week. The Borrower or Borrower's representative shall periodically interview a sufficient number of
the contractor's or subcontractor's employees entitled to Davis Bacon prevailing wages to verify that
contractors or subcontractors are paying the appropriate wage rates. As provided in 29 CFR 5.6(a)(6), all
interviews must be conducted in confidence. The Borrower must use Standard Form 1445 or equivalent
documentation to memorialize the interviews. Copies of the SF 1445 form are available at
http://www.gsa.gov. At a minimum, the Borrower or the Borrower's representative should conduct interviews
with a representative group of covered employees within two weeks of each contractor or subcontractor's
submission of its initial weekly payroll data and two weeks prior to the estimated completion date for the
contract or subcontract. EPA has issued a waiver from the two week interview interval requirements by a
November 16, 2012, EPA Memorandum, Class Deviation — Prevailing Wage Interview Interval Requirement
in Clean Water and Drinking Water State Revolving Funds (CWSRF and DWSRF) Capitalization Grants.
The provision for two week interview intervals is not a regulatory or statutory requirement and has been
superseded by the class deviation. The Borrower or Borrower's representative should conduct such
interviews if and when the Borrower or Borrower's representative finds it necessary to ensure that contractors
are complying with the prevailing wage requirements.
(p) Human Trafficking. Under the requirements of Section 106 of the Trafficking Victims
Protection Act of 2000, as amended, the following provisions apply to this award:
"The Municipality, its employees, sub -recipients under this award, and sub -recipients' employees
may not engage in severe forms of trafficking in persons during the period of time that the award is in
effect; procure a commercial sex act during the period of time that the award is in effect; or use
forced labor in the performance of the award or sub -awards under the award."
(q) American Iron and Steel Products. Public Law 113-235, Consolidated and Further
Continuing Appropriations Act 2015 requires that none of the appropriated funds for the DWSRF may be
used for the construction, alteration, maintenance, or repair of a public water system unless all of the iron
and steel products used in the project are produced in the United States. DWSRF American Iron and Steel
(AIS) requirements are waived if a project has approved plans and specifications from the Nebraska
Department of Health and Human Services prior to December 16, 2014, the enactment date of Public Law
113-235, Consolidated and Further Continuing Appropriations Act 2015. These American Iron and Steel
requirements apply for the entirety of the construction activities financed by the Loan Agreement unless (a) a
waiver is provided to the Assistance Recipient by EPA or (b) compliance would be inconsistent with United
States obligations under international agreements. In order to receive a waiver, the Assistance Recipient
must send a written request to the EPA Administrator. A decision will be made based on the following
criteria:
(1) The requirement is inconsistent with the public interest for purposes of the project for which a waiver
has been requested,
(2) Iron and steel products are not produced in the United States in sufficient and reasonably available
quantities and of a satisfactory quality, or
(3) Inclusion of iron and steel products produced in the United States will increase the overall cost of the
project by more than 25 percent.
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If the Administrator receives a request for a waiver, the Administrator shall make available to the
public on an informal basis a copy of the request and information available to the Administrator concerning
the request and shall allow for informal public input on the request for at least 15 days prior to making a
finding based on the request. The Administrator shall make the request and accompanying information
available by electronic means, including on the official public Internet Web site of the Environmental
Protection Agency. EPA will provide additional guidance on this provision as it becomes available.
The term "iron and steel products" means the following products made primarily of iron or steel: lined
or unlined pipes and fittings, manhole covers and other municipal castings, hydrants, tanks, flanges, pipe
clamps and restraints, valves, structural steel, reinforced precast concrete, and construction materials.
Iron and steel products that are not 100% compliant with the above requirements should be identified
early in the planning and design process and the appropriate justification prepared and waiver process
followed to meet the requirement before the project goes to construction.
American Iron and Steel (AIS) requirements are waived if a project has submitted plans and
specifications for approval to a State agency, prior to enactment of the Appropriations Act or January 17,
2014 in accordance with the EPA nationwide plans and specifications waiver signed April 15, 2014.
In addition, EPA has granted a nationwide waiver for de minimis incidental components for eligible
CWSRF or DWSRF projects, signed April 15, 2014. This action permits the use of products when they occur
in de minimis incidental components for such projects funded by the Act that may otherwise be prohibited
under section 436(a). Example of incidental components could include small washers, screws, fasteners,
(i.e., nuts and bolts), miscellaneous wire, corner bead, ancillary tube, etc. Examples of items that are clearly
not incidental include significant process fittings (i.e., tees, elbows, flanges, and brackets), distribution
system fittings and valves, force main valves, pipes for sewer collection and/or water distribution, treatment
and storage tanks, large structural support structures, etc. Funds used for such de minimis incidental non -
AIS compliant components cumulatively may comprise no more than a total of 5 percent of the total cost of
the materials used in and incorporated into a project. The cost of an individual non -AIS compliant item may
not exceed 1 percent of the total cost of the materials used in and incorporated into a project.
EPA has provided additional guidance on these AIS provisions which can be found on EPA's website
at http://water.epa.gov/qrants funding/aisrequirement.cfm.
Article III
REPRESENTATIONS AND COVENANTS OF BORROWER
Section 3.01. Representations of the Borrower. The Borrower represents as follows:
(a) Organization and Authority.
(i) The Borrower is a city, town, village, district, association or other public body
created by or pursuant to the constitution and statutes of the State of Nebraska.
(ii) The Borrower has full legal right and authority and has all necessary licenses
and permits required as of the date hereof (or is in the process of obtaining all necessary licenses and
permits that will be required, but are not required to be in place as of the date hereof) to own, operate and
maintain its Public Water System, to carry on its activities relating thereto, to execute and deliver this Loan
Agreement, to undertake and complete the Project, and to carry out and consummate all transactions
contemplated by the Loan.
(iii) The proceedings of the Borrower's governing body conducted to approve this
Loan Agreement and approve its execution, issuance and delivery on behalf of the Borrower, and authorizing
the Borrower to undertake and complete the Project, have been duly and lawfully convened and conducted
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and the ordinance of the Borrower's governing body approving such matters has been duly and lawfully
adopted.
(iv) This Loan Agreement has been duly authorized, executed and delivered on
behalf of the Borrower and constitutes the legal, valid and binding obligation of the Borrower enforceable in
accordance with its terms, except to the extent that enforceability may be limited by laws related to
bankruptcy, insolvency or other similar laws affecting creditors' rights generally and general principles of
equity.
(b) Full Disclosure. To the best knowledge of the Borrower, there is no fact that the
Borrower has not disclosed to NDEQ in writing on the Borrower's application for the Loan or otherwise
anything that materially adversely affects or that will materially adversely affect the properties, activities of its
Public Water System, or the ability of the Borrower to make all Loan Repayments and otherwise observe and
perform its duties, covenants, obligations and agreement under this Loan Agreement.
(c) Non -Litigation. There is no controversy, suit or other proceeding of any kind pending
or to the best knowledge of the Borrower threatened questioning, disputing or affecting in any way (i) the
legal organization of the Borrower or its boundaries, (ii) the right or title of any of its officers to their respective
offices, (iii) the legality of any official act taken in connection with obtaining the Loan, (iv) the constitutionality
or validity of the indebtedness represented by this Loan Agreement, (v) any of the proceedings had in relation
to the authorization or execution or the pledging of the revenues of the Borrower's Public Water System
under this Loan Agreement, or (vi) the ability of the Borrower to make all Loan Repayments or otherwise
observe and perform its duties, covenants, obligations and agreements under this Loan Agreement.
(d) Compliance With Existing Laws and Agreements. The authorization, execution and
delivery of this Loan Agreement by the Borrower, and the performance by the Borrower of its duties,
covenants, obligations and agreements thereunder, will not violate any law to which the Borrower is subject
or breach any agreement to which the Borrower is a party.
(e) No Defaults. No event has occurred and no condition exists that would constitute an
Event of Default. The Borrower is not in violation of any agreement which would materially adversely affect
the ability of the Borrower to make all Loan Repayments or otherwise observe and perform its duties,
covenants, obligations and agreements under this Loan Agreement.
(f) Governmental Consent. The Borrower has obtained all permits and approvals
required to date under this Loan Agreement (or is in the process of obtaining all permits and approvals that
will be required, but are not required to be in place as of the date hereof) for the undertaking or completion of
the Project and the financing or refinancing thereof. The Borrower has complied with or expects to comply
with, all applicable provisions of law requiring any notification, with any governmental body or officer in
connection with this Loan Agreement or with the undertaking or completion of the Project and the financing
or refinancing thereof.
(g) Compliance With Law. The Borrower:
(i) is in compliance with all laws, ordinances, governmental rules and regulations
to which it is subject, including, without limitation, any public hearing or public notice requirements or
environmental review requirements contained in the Regulations, with which the failure to comply would
materially adversely affect the ability of the Borrower to conduct its activities, enter into this Loan Agreement
or undertake or complete the Project; and
(ii) has obtained, or expects to obtain, all licenses, permits, franchises or other
governmental authorizations presently necessary for the ownership of its property which, if not obtained,
would materially adversely affect the ability of the Borrower to complete the Project.
(h) Use of Loan Proceeds. The Borrower will apply the proceeds of the Loan as
described in Article II:
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(i) to finance or refinance a portion of the Project Costs and
(ii) where applicable, to reimburse the Borrower for a portion of the Project Costs,
which portion was paid or incurred in anticipation of reimbursement by NDEQ and is eligible for such
reimbursement pursuant to the Regulations. All of such costs constitute Project Costs for which NDEQ is
authorized to make Loans to the Borrower pursuant to the Act and the Regulations.
(i) Project Costs. The Borrower certifies that the Project Costs, as listed in Attachment B,
are reasonable and accurate estimations and, upon direction of NDEQ, will supply the same with a certificate
from its engineer stating that such costs are reasonable and accurate estimations, taking into account
investment income, if any, to be realized during the course of construction of the Project and other money
that would, absent the Loan, have been used to pay the Project Costs.
Section 3.02. Particular Covenants of the Borrower.
(a) Dedicated Source of Revenue for Repayment of the Loan. The Borrower hereby
pledges the System Revenues as the dedicated source of revenue for the repayment of the Loan. The
pledge herein provided for is made in accordance with and under the terms of Ordinance No. 2351 and is
secured on a parity with the pledge made under the ordinances described below in this Subsection 3.02(a).
The Borrower shall fix, establish, maintain and collect such rates, fees and charges for the use and services
furnished by or through the Borrower's Public Water System, including all improvements and additions
hereafter constructed or acquired by the Borrower, as will provide revenues sufficient to (i) pay the cost of the
operation and maintenance, and replacement of the Borrower's Public Water System, (ii) pay at least 110%
of the principal of and interest on the Loan as and when the same become due, and (iii) pay all other
amounts due at any time under this Loan Agreement, provided, however, the lien of NDEQ on the revenues
of the Borrower's Public Water System shall be on a parity with the lien on such revenues of the Borrower's
Existing Revenue Obligations and any Additional Revenue Obligations hereafter issued on parity with such
Existing Revenue Obligations. These revenues shall be collected and maintained in separate accounts or
ledgers for the operation and maintenance costs and for principal and interest payments on the Loan and
any other Revenue Obligations of equal lien. The Borrower shall deposit monthly, in the Loan payment
account, an amount equal to at least one-sixth of the anticipated amount due on the next Loan payment
date. The funds in such accounts or ledgers shall be restricted for their intended use, and the loan obligation
reported on financial statements. The Borrower agrees to develop the Public Water Supply User Charge
System based on actual or estimated use of Borrower's Public Water System. Furthermore, each user and
or user class pays proportionate to their use within the Borrower's service area. The Borrower agrees to
review the adequacy of the Public Water Supply User Charge System biennially. NDEQ acknowledges and
agrees that the Borrower has entered into a Water Service Agreement with Cargill, Inc., dated June 27, 2000
(as supplemented by the First Addendum to Water Service Agreement dated as of February 27, 2001 and as
amended by the First Amendment to Water Service Agreement dated March 9, 2007, the Second
Amendment to Water Service Agreement dated September 1, 2012, a Third Amendment to Water Service
Agreement dated February 26, 2013 and a Fourth Amendment to Water Service Agreement dated
November 16, 2016), providing for certain specific rates and charges to be paid by Cargill, Inc., and that the
terms of such contract shall limit the charges to be imposed upon such customer during the term of such
Water Service Agreement. The Borrower agrees the initial financial analysis performed by NDEQ in
Attachment C is a reasonable estimate of the Project Costs, of the financial situation of the Borrower in
relation to this Project, and of the user charges necessary at the time of initiation of operation of the Project.
The NDEQ may review this information annually to insure the Borrower's compliance with the Loan
conditions and update Attachment C changes.
(b) Performance Under Loan Agreement. The Borrower covenants and agrees:
(i) to comply with all applicable State and federal laws, rules and regulations in the
performance of this Loan Agreement (including, but not limited to the federal crosscutting issues listed in
Appendix A of the EPA's final Drinking Water State Revolving Fund Program Guidelines and set forth on
Attachment D hereto and NDEQ Regulations); and
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(ii) to cooperate with NDEQ in the observance and performance of the respective
duties, covenants, obligations and agreements of the Borrower and NDEQ under this Loan Agreement.
(c) Completion of Project and Provision of Moneys Therefor. The Borrower covenants
and agrees:
(i) to exercise its best efforts in accordance with prudent public water supply utility
practice to complete the Project and to so accomplish such completion on or before the estimated Project
completion date set forth in Article II hereto; and
(ii) to provide from its own financial resources all moneys, in excess of the total
amount of proceeds it receives pursuant to this Loan Agreement, required to complete the Project.
(d) Delivery of Documents. Concurrently with the delivery of this Loan Agreement (as
previously authorized and executed) at the loan closing, the Borrower will cause to be delivered to NDEQ
each of the following items:
(i) counterparts of this Loan Agreement (as previously executed by parties hereto);
(ii) copies of the ordinances and/or resolutions of the governing body of the
Borrower authorizing the execution and delivery of this Loan Agreement certified by an Authorized
Representative;
(iii) an Opinion of Borrower's Counsel substantially in the form of Attachment E
hereto;
(iv) an executed Note (or other evidence of indebtedness) evidencing the
Borrower's obligations under this Loan Agreement in the form of Attachment F;
(v) an executed certificate of the Borrower in the form of Attachment G hereto; and
(vi) such other certificates, documents, opinions and information as NDEQ may
require.
(e) Operation and Maintenance of Public Water System. The Borrower covenants and
agrees that it shall, in accordance with Section 8 of Title 179 NAC 22—Operation and Maintenance of
Community and Non -Transient Non -Community Public Water Systems:
(i) at all times operate the properties of its Public Water System in an efficient
manner; and
(ii) maintain its Public Water System, making all necessary and proper repairs,
renewals, replacements, additions, betterments and improvements necessary to maintain its system in good
repair, working order and operating condition.
(f) Disposition of Public Water System. The Borrower covenants that it intends to own
and operate the Project at all times during the term of the Loan. The Borrower does not know of any reason
why the Project will not be so used in the absence of:
Loan;
(i) supervening circumstances not anticipated by the Borrower at the time of the
(ii) adverse circumstances beyond the control of the Borrower or;
15
(iii) obsolescence of such insubstantial parts or portions of the Project as may
occur as a result of normal use thereof.
The Borrower shall not sell, lease, abandon or otherwise dispose of all or substantially all of
its Public Water System except on 90 days' prior written notice to NDEQ and, in any event, shall not sell,
lease, abandon or otherwise dispose of the same unless the Borrower shall in accordance with Section 4.02
hereof assign this Loan Agreement and its rights and interests hereunder to the purchaser or lessee of the
Public Water System and such purchaser or lessee shall assume all duties, covenants, obligations and
agreements of the Borrower under this Loan Agreement. In no event shall the Borrower sell, lease,
abandon, or otherwise dispose of the Public Water System to any person or entity other than a municipal
corporation or other political subdivision of the State of Nebraska, or any combination thereof, that has legal
authority to own or operate the Public Water System.
Before any proposed disposition of the Public Water System can be made, the Borrower
shall provide NDEQ, and NIFA if NIFA is an assignee of the Note, with an opinion of a nationally recognized
bond counsel that such proposed disposition is permitted by the provisions of this subparagraph, and,
further, that such disposition shall not endanger the exclusion from gross income for federal income tax
purposes of the interest on any bonds issued to fund deposits into the Loan Fund, nor shall it relieve the
Borrower of its duties, covenants, obligations and agreements under this Loan Agreement.
(g) Records and Accounts. The Borrower shall maintain accurate records and accounts
in accordance with generally accepted accounting principles, including principles relating to the reporting of
infrastructure assets for its Public Water Supply System (the "System Records"), which shall be separate and
distinct from its other records and accounts (the "General Account"). The System Records and General
Accounts shall be made available for inspection upon request by the NDEQ at any reasonable time. The
Borrower shall, upon written request by the NDEQ during the term of the Loan, engage an independent
auditor to conduct an audit of the project's financial records in accordance with generally accepted
government auditing standards. The Borrower shall provide the NDEQ a copy of the audit report, provided
such audit shall not be due to the NDEQ sooner than 210 days following the close of the fiscal year, or years,
identified in the request for audit. In the event that during the period in which the Project financed by this
Loan Agreement is under construction, and the Borrower expends, for any purpose, total federal funds in
excess of seven hundred and fifty thousand dollars ($750,000) during the Borrower's fiscal year, then the
Borrower shall, irrespective of any request from the NDEQ, provide the NDEQ a copy of the Single Audit
made on the Borrower's General Accounts performed by an independent auditor required in such cases by 2
CFR Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards. In the sole discretion of the NDEQ, any requirement herein to perform and/or provide an audit at the
request of the NDEQ may be waived by the NDEQ on the basis of the Borrower's receipt of an audit waiver
received from some other government agency and accurately acknowledging the Borrower's obligation to the
NDEQ under this Loan or for any other reason acceptable to the NDEQ.
(h) Inspections; Information. The Borrower shall permit the EPA, NDEQ, and any party
designated by NDEQ to examine, visit, and inspect, at any and all reasonable times, the property, if any,
constituting the Project, and to inspect and make copies of any accounts, books, and records, including
(without limitation) its records regarding receipts, disbursements, contracts, investments, and any other
matters relating thereto and to its financial standing, and shall supply such reports and information as the
EPA and NDEQ may reasonably require in connection therewith.
(i) Financial Information. The Borrower specifically agrees to provide to NDEQ a
reasonable number of copies of such financial information and operating data of the Borrower and the Public
Water System and the prompt notification of the occurrence of certain material events, to the extent
necessary for NDEQ to comply with its continuing disclosure obligations set forth in the SEC Rule. Such
financial information shall be audited in accordance with the provisions of subsection (g)(ii) hereof. Such
financial information shall be prepared in accordance with GAAP. Such financial information and operating
data, if requested, shall be supplied within 210 days after the end of its fiscal year. If audited financial
information will be prepared, but is not available within 210 days of the end of the appropriate Borrower's
fiscal year, unaudited financial information shall be provided to NDEQ pending receipt of audited financial
16
information. For purposes of this paragraph, "material event" shall mean (a) principal and interest payment
delinquencies on any Indebtedness, (b) non -payment -related defaults in agreements authorizing any
Indebtedness, (c) rating changes on any Indebtedness, (d) adverse tax opinions or events affecting the
tax-exempt status of any Indebtedness, or (e) unscheduled draws on debt service reserves or credit
enhancements on any Indebtedness reflecting financial difficulties.
(j) Insurance. The Borrower will carry and maintain such reasonable amount of all risk
insurance on all properties and all operations of the Public Water System as would be carried by similar
sized municipal operators of Public Water System, insofar as the properties are of an insurable nature. The
Borrower also will carry general liability insurance in amounts not less than the maximum liability of a
governmental entity for claims arising out of a single occurrence, as provided by the Nebraska Political
Subdivisions Tort Claims Act, Neb.Rev.Stat. §§13-901 to 13-926, or other similar future law.
(k) Continuing Representations. The representations of the Borrower contained herein
shall be true at the time of the execution of this Loan Agreement and at all times during the term of this Loan
Agreement.
(1) Notice of Material Adverse Change. The Borrower shall promptly notify NDEQ of any
material adverse change in the activities, prospects or condition (financial or otherwise) of the Borrower's
Public Water System, in accordance with the provisions of subsection 3.02(g) and (1) hereof, or in the ability
of the Borrower to make all Loan Repayments and otherwise observe and perform its duties, covenants,
obligations and agreements under this Loan Agreement.
(m) Additional Covenants and Requirements. If necessary in connection with the
making of the Loan, additional covenants and requirements are listed on Attachment H hereto. The
Borrower agrees to observe and comply with each such additional covenant and requirement, if any.
Article IV
ASSIGNMENT
Section 4.01. Assignment and Transfer by NDEQ. The Borrower hereby approves and consents
to any assignment or transfer of this Loan Agreement that NDEQ deems necessary in connection with the
operation and administration of the Loan Fund. The Borrower hereby specifically approves the assignment
and pledging of the interest portion of the Loan Repayments to NIFA.
Section 4.02. Assignment by the Borrower. This Loan Agreement may not be assigned by the
Borrower for any reason, unless the following conditions shall be satisfied:
(a) NDEQ shall have approved said assignment in writing;
(b) the assignee is a village, town, city, district, association, county or other public body
created by or pursuant to State law of the State of Nebraska or any combination thereof, that has legal
authority to own or operate the Public Water System;
(c) the assignee shall have expressly assumed in writing the full and faithful observance
and performance of the Borrower's duties, covenants, and obligations under this Loan Agreement; provided,
however, such assignment shall not relieve the Borrower of its duties, covenants, and obligations under this
Loan Agreement;
(d) the assignment will not adversely impact NDEQ's ability to meet its duties, covenants
and obligations under the Pledge Agreement as determined in writing by NDEQ;
(e) the assignment will not adversely affect the exclusion from gross income for federal tax
purposes of the interest on any bonds issued by NIFA to fund deposits into the Loan Fund; and
17
(f) the Borrower shall provide NDEQ, and NIFA if NIFA is an assignee of the Note, with;
(i) an opinion of a qualified attorney that each of the conditions set forth in
subparagraphs Section 4.02(b) and (c) above has been met, and;
(ii) an opinion of nationally recognized bond counsel that the condition set forth in
subparagraph Section 4.02(e) above has been met.
Article V
EVENTS OF DEFAULT AND REMEDIES
Section 5.01. Notice of Default. If an Event of Default shall occur, the nondefaulting party shall
give the party in default and NIFA prompt telephonic notice of the occurrence of such Event of Default,
provided the nondefaulting party has knowledge of such Event of Default. Such telephonic notice shall be
immediately followed by written notice of such Event of Default given in the manner set forth in Section 6.03
hereof.
Section 5.02. Remedies on Default.
(a) Whenever an Event of Default shall have occurred and be continuing, NDEQ or the
Borrower shall have the right to take whatever action at law or in equity may appear necessary or desirable to
collect the amounts then due and to become due or to enforce the performance and observance of any
obligation or agreement of NDEQ or the Borrower (including, without limitation, withholding remaining Loan
disbursements, cancellation of this Loan Agreement and acceleration of the remaining scheduled principal
payments set forth on Attachment A, or such other remedies provided to NDEQ in the Act and the
Regulations).
(b) If the Borrower fails to make any payment of principal and interest, late fee, and penalty
interest imposed pursuant to this Loan within 60 days of the due dates specified in Section 2.05, the payment
shall be deducted from the amount of aid to municipalities to which the Borrower is entitled under Neb. Rev.
Stat. §72-1503. Such amount shall be paid directly to the Loan Fund.
Section 5.03. Expenses.
(a) Upon the occurrence of an Event of Default on the part of the Borrower, and to the
extent permitted by law, the Borrower shall, on demand, pay to NDEQ the reasonable fees and expenses
incurred by NDEQ in the collection of Loan Repayments or any other sum due hereunder or in the
enforcement of performance or observation of any other duties, covenants, obligations or agreements of the
Borrower contained herein. Prior to incurring any such expenses, NDEQ shall provide written notice to the
Borrower that it intends to incur such expenses; provided, however, a failure by NDEQ to give such notice
shall not affect NDEQ's right to receive payment for such expenses. Upon request by the Borrower, NDEQ
shall provide copies of statements evidencing the fees and expenses for which NDEQ is requesting payment.
(b) Upon the occurrence of an Event of Default on the part of NDEQ, and to the extent
permitted by law and availability of appropriated funds by the Nebraska Legislature, NDEQ shall, on demand,
pay to the Borrower the reasonable fees and expenses incurred by the Borrower in the enforcement of
performance or observation of any other duties, covenants, obligations or agreements of NDEQ contained
herein. Prior to incurring any such expenses, the Borrower shall provide written notice to NDEQ that it
intends to incur such expenses; provided, however, a failure by the Borrower to give such notice shall not
affect the Borrower's right to receive payment for such expenses. Upon request by NDEQ, the Borrower
shall provide copies of statements evidencing the fees and expenses for which the Borrower is requesting
payment.
Section 5.04. Application of Moneys. Any moneys collected by NDEQ pursuant to Section 5.02 or
5.03 hereof shall be applied;
18
(a) first, to pay interest on the Loan as the same becomes due and payable;
(b) second, to pay principal due and payable on the Loan;
(c) third, to pay expenses owed by the Borrower pursuant to Section 5.03 hereof; and
(d) fourth, to pay any other amounts due and payable hereunder as such amounts become
due and payable. To the extent that NDEQ's right to receive Loan Repayments is on a parity of lien basis
with the lien of Existing Revenue Obligations or Additional Revenue Obligations on the Borrower's System
Revenues, such moneys shall be applied pro rata to all such obligations.
Section 5.05. No Remedy Exclusive; Waiver; Notice. No remedy herein conferred upon or
reserved to the parties hereto is intended to be exclusive and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Loan Agreement or now or hereafter existing at
law or in equity. The parties hereto, in good faith, shall exercise such remedies with due diligence in a timely
manner, however, no delay or omission to exercise any right, remedy or power accruing upon any Event of
Default shall impair any such right, remedy or power or shall be construed to be a waiver thereof, but any
such right, remedy or power may be exercised from time to time and as often as may be deemed expedient.
In order to entitle the parties hereto to exercise any remedy reserved to them in this Article, it shall not be
necessary to give any notice, other than such notice as may be required in this Article V.
Section 5.06. Retention of Rights. Notwithstanding any assignment or transfer of this Loan
Agreement pursuant to the provisions hereof, or anything else to the contrary contained herein, the parties
hereto shall have the right upon the occurrence of an Event of Default to take any action, including (without
limitation) bringing an action against the defaulting party at law or in equity, as such party may, in its
discretion, deem necessary to enforce the obligations of the defaulting party pursuant to this Loan
Agreement.
Article VI
MISCELLANEOUS
Section 6.01. Hold Harmless Agreement. The State of Nebraska and NDEQ, and the officers,
agents, and employees of each, shall have no responsibility or liability for the construction, operation and
maintenance of the Project. The Borrower shall be responsible for such construction, operation and
maintenance of the Project and shall assume responsibility for all Project Costs and any claims, demands,
damages, losses, costs, expenses, or liability accruing or resulting to any and all contractors, subcontractors,
employees, and any other person, firm, or corporation furnishing or supplying services, materials, or supplies
in connection with construction of the Project, and for any and all claims, demands, damages, losses, costs,
expenses, or liability occurring or resulting to any person, firm, or corporation, as a result of or incident to,
either in whole or in part, whether directly or indirectly, the construction of the Project.
Section 6.02. Waivers. Any waiver at any time of rights or duties under this Loan Agreement shall
not be deemed to be a waiver of any subsequent right or duty under this Loan Agreement.
Section 6.03. Notices. All notices, certificates or other communications hereunder shall be
sufficiently given and shall be deemed given when hand delivered or mailed by registered or certified mail,
postage prepaid, to the Borrower and NDEQ at the following addresses:
If to Borrower: City of Blair If to NDEQ: Department of Environmental Quality
218 South 16th Street 1200 N Street, The Atrium, Suite 400
Blair, Nebraska 68008 Post Office Box 98922
Attention: City Administrator Lincoln, NE 68509-8922
19
All notices given by registered or certified mail as aforesaid shall be deemed duly given as of the
date they are so mailed. Any of the foregoing parties may designate any further or different addresses to
which subsequent notices, certificates or other communications shall be sent, by notice in writing given to the
others.
Section 6.04. Amendments, Supplements and Modifications. This Loan Agreement may not be
amended, supplemented, or modified except in writing signed by NDEQ and the Borrower.
Section 6.05. Severability. In the event any provision of this Loan Agreement shall be held illegal,
invalid, or unenforceable by any court of competent jurisdiction, such holding shall not invalidate, render
unenforceable or otherwise affect any other provision hereof.
Section 6.06. Binding Effect. This Loan Agreement shall inure to the benefit of and shall be
binding upon NDEQ and the Borrower and their respective successors and assigns.
Section 6.07. Execution in Counterparts. This Loan Agreement may be executed in several
counterparts, each of which shall be deemed to be an original and all of which shall constitute but one and
the same instrument.
Section 6.08. Governing Law and Regulations. This Loan Agreement shall be governed by and
construed in accordance with the laws of the State of Nebraska, including the Act and the Regulations, which
Regulations are, by this reference thereto, incorporated herein as a part of this Loan Agreement.
Section 6.09. Consents and Approvals. Whenever the written consent or approval of the State
shall be required under the provisions of this Loan Agreement, such consent or approval may only be given
by NDEQ.
Section 6.10. Further Assurances. The Borrower shall, at the request of NDEQ, authorize,
execute, acknowledge and deliver such further resolutions, conveyances, transfers, assurances, financing
statements, and other instruments as may be necessary or desirable for better assuring, conveying, granting,
assigning and confirming the rights, security interests and agreements granted or intended to be granted by
this Loan Agreement.
Section 6.11. Notice to Trustee. Upon assignment of the Note to NIFA which may occur from time
to time and thereafter, NDEQ shall deliver a notice of this Loan in the form prescribed by NIFA, and other
pertinent information relating thereto, to the Trustee for any bonds of NIFA issued to fund deposits into the
Loan Fund.
IN WITNESS THEREOF, the parties hereto have caused this Loan Agreement to be executed and delivered
as of the date set forth below.
CITY OF BLAIR, NEBRASKA
By
TitleMavor
Date 1 ('
20
NEBRAS �'DEPARMNT OF
ENVIRON E �TAL U LITY
a
Title k-/ Director
4
Date 5 p'( o
INDEX OF ATTACHMENTS
Exhibit 1 - Project Description
Attachment A - Loan Repayment Schedule
Attachment B - Project Costs and Projected Outlay Schedule
Attachment C - Financial Capability
Attachment D - List of Federal Laws and Authorities
Attachment E - Borrower's Counsel's Opinion
Attachment F - Promissory Note
Attachment G - Certificate
Attachment H — Additional Covenants and Requirements
21
EXHIBIT 1
PROJECT DESCRIPTION
The project to be funded by this DWSRF financing is the replacement of the South Pump Station,
which lacks capacity to meet the current user demand, and to replace approximately 3,000 feet of water
main along 16th Street, which is nearly 90 years old and has had multiple leaks in recent years. The project
includes all related work, land, testing, and engineering fees.
22
ATTACHMENT A
LOAN REPAYMENT SCHEDULE
Interest and Administrative fee accruing before June 15, 2020, which is not reflected on the following
amortization schedule, shall be billed and paid in accordance with the NDEQ's procedures. Interest and the
Administrative fee shall accrue at the applicable rate (set forth in Section 2.03 and 2.06 of the Loan
Agreement) as to the amount drawn from the date of each disbursement. Payments are due on June 15 and
December 15 of each year, with an estimated commencement of June 15, 2018. Amounts due will be
invoiced on or about May 15 and November 15 of each year for each six-month payment period ending on
the set interest payment date. Interest and Administrative fee accruing on principal amounts drawn after the
invoicing date are to be included with the next invoice. Following the receipt of Initiation of Operation date
and the final disbursement of Loan proceeds to the Borrower, a revised final Attachment A shall be prepared
by NDEQ to establish the final debt service schedule based upon the following parameters set forth below.
Such revised final Attachment A thereafter shall be deemed to be incorporated herein by reference and
made a part hereof and shall supersede and replace the projected Attachment A.
The final Loan Repayment Schedule shall be calculated by NDEQ based on the following
parameters:
(1) Final principal amount of Loan;
(2) Amount of Loan Forgiveness, if any;
(3) Interest rate as set forth in Section 2.03;
(4) Administrative fee rate as set forth in Section 2.06;
(5) Installments of principal and interest on each June 15 and December 15 payment date, (a)
beginning on the latest such payment date that is within one year after the Initiation of Operation date but no
later than three years after the date of the Loan Agreement, whichever occurs first and (b) ending on the
latest such payment date that is less than 30 years after the Initiation of Operation date; and
(6) Amortization of principal to achieve level payments of principal and interest (not taking into
account the administrative fee payment pursuant to Section 2.06).
23
ATTACHMENT B
PROJECT COSTS
Administrative and legal fees
$10,000
Land and right-of-way
5,000
A/E Fees
40,000
Inspection Fees
45,000
Construction and Equipment
1,150,000
Miscellaneous
100,000
Contingencies
50,000
TOTAL
$1,400,000
PROJECT FUNDING SOURCES
DWSRF Loan Amount $1,190,000
DWSRF 15% Loan Forgiveness Amount 210,000
Total DWSRF Funding $1,400,000
PROJECTED OUTLAY SCHEDULE
May 2018
$50,000
July 2018
200,000
August 2018
200,000
September 2018
200,000
November 2018
100,000
July 2019
100,000
August 2019
200,000
September 2019
200,000
November 2019
100,000
March 2020
50,000
TOTAL
$1,400,000
24
ATTACHMENT C
FINANCIAL CAPABILITY
BLAIR, NEBRASKA
DWSRF Project No. D311619
Blair has requested DWSRF funding assistance of $1,400,000 to finance a replacement booster
station, and to replace approximately 3,000 feet of water main in their distribution system. The project will
include engineering and inspection fees.
An abbreviated financial analysis is presented. The documents reviewed and used to complete this
analysis are:
Audited Financial -Statements Excerpts of the City of Blair, for the years 2014 through 2016,
2. Water/Wastewater Preapplication for Federal/State Assistance,
3. Water Facilities Master Plan prepared by HDR, Inc. plus miscellaneous correspondence from
the City of Blair in project file.
Table 1
Blair Water Fund Summary
Year Revenue
(includes
interest income
Expenses
(excludes
depreciation)
Revenue Minus
Expenses
2014 $7,820,662
$3,473,258
$4,347,404
2015 $7,561,579
$3,410,298
$4,151,281
2016 $7,556,827
$3,671,480
$3,885,347
Blair as reported on the State of Nebraska's Public Auditor's website for year 2016-2017 has
$35,679,973 outstanding principal debt, $8,110,962 outstanding interest debt for a total outstanding debt of
$43,790,935. Long -Term Liabilities for Governmental and Business Activities are listed below taken from
Blair's Audited Financial Statements ending September 30, 2017.
Governmental activities long-term debt:
1. Tax Increment Financing Bond issued by the City in December, 2007 (interest of 4.48%) has a
remaining balance of $530,000 as of September 30, 2017.
2. Public Safety Bonds issued by the City in February, 2018 (interest varies from 3.30% to 4.25%)
has a remaining balance of $330,000 as of September 30, 2017
3. General Obligation Refunding Bonds issued by the City in November, 2011 (interest varies from
0.75% to 3.60%), has a balance of $1,705,000 as of September 30, 2017.
4. General Obligation bond dated July, 2015 interest varies from 0.25% to 2.35% (interest varies
from 0.50% to 2.65%), has a balance of $940,000 as of September 30, 2017.
5. Public Safety Tax Anticipation Bonds dated December, 2015 (interest varies from 0.65% to
2.60°/x), has a balance of $110,000 as of September 30, 2017.
Business activities long-term debt —Water:
1. SRF Loan 2010 issued by the City in July, 2010 (interest of 2.30%) has a remaining balance of
$2,551,099 as of September 30, 2017.
25
2. Water Revenue Bonds, Series 2010B, issued by the City in September, 2010 (interest varies from
2.75% to 4.35%) has a remaining balance of $6,500,000 as of September 30, 2017.
3. Water Revenue Bonds, Series 2010C, issued by the City in September, 2010 (interest varies from
3.25% to 3.50%) has a remaining balance of $390,000 as of September 30, 2017.
4, Water Revenue Bonds, Series 2012A, issued by the City in June, 2012 (interest varies from
2.20% to 2.50%) has a remaining balance of $7,860,000 as of September 30, 2017.
5. Bond Anticipation Notes dated May, 2013 (interest of 2.25%), has a balance of $3,200,000 as of
September 30, 2017.
6. Water Revenue Bonds, Series 2016, issued by the City in August, 2016 (interest varies from
1.50% to 4.00%) has a remaining balance of $5,550,000 as of September 30, 2017.
7. Water Revenue Bonds, Series 2017, issued by the City in March, 2017 (interest varies from
2.00% to 4.75%) has a remaining balance of $3,460,000 as of September 30, 2017.
Business activities long-term debt — Sewer:
1. Sewer Revenue Bonds, Series 2004, issued by the City in December, 2004 (interest varies from
3.80% to 4.25%) has a remaining balance of $145,000 as of September 30, 2017.
2, Sewer Revenue Bonds, Series 2012, issued by the City in March, 2013 (interest of 2.10%) has a
remaining balance of $723,874 as of September 30, 2017.
3. Sewer Revenue Bonds, Series 2015, issued by the City in September, 2015 (interest varies from
0.95% to 3.40%) has a remaining balance of $1,645,000 as of September 30, 2017.
The maturities of the governmental long-term debt are as follows in Table 2:
Table 2
Annual Debt Service Requirements to amortize all governmental and business type long-term
Debt outstanding as of September 30, 2018, are as follows:
Year Ended Sept 30
Principal
Interest
Total
2018
$9,083,095
$1,043,436
$10,126,531
2019
2,050,594
890,625
2,941,219
2020
2,428,148
837,637__3,265,785_
2021
2,040,757
765,761
2,806,518
2022-2026
9,790,003
2,798,917
12,588,920
2027-2031
7,104,477
1,398,925
8,503,402
2032-2036
2,154,388
299,396
2,453,784
2037-2041
775,378
69,105
844,483
2042-2043
253.133
7.160
260.293
Total
$35,679,973
$8,110,962
$43,790,935
Analysis of the Water Utility:
The City of Blair manages their water utility. The water utility ran operating surpluses for the years
2014 through 2016. The number of users is estimated at 3,582 residential and commercial connections. A
metered rate structure has been established by the City Council consisting of $8.40 meter charge (5/8") plus
$1.00 for each 748 gallons monthly water quantity used. The current rate structure translates to $19.40 per
month for a typical household water use of 8,220 gallon per month. The estimated residential water rate
W
increase to fund this project with 10% coverage on DWSRF debt service would equal $1.51 per month debt
service per user. These estimates would make for a projected monthly water rate of $20.91 for a typical
household water use of 8,220 gallons per month. A final assessment of revenues and costs will be analyzed
to determine the actual user charge adjustment as necessary. Monthly water bills would vary accordingly for
actual monthly water use for each service connection. The City is eligible for a 30 -year DWSRF loan at a per
annum interest rate of 2.0 percent plus an annual 0.5 percent administrative fee on the outstanding principal
amount. The DWSRF loan funding assistance of $1,400,000 minus $210,000 loan forgiveness for a
principal amount of $1,190,000 would have an annual debt service of $58,856 plus the DWSRF contract
required 10% coverage or $5,885 for delinquency or loss of users as shown in Table 4 totals $64,741 for the
first year debt service including coverage.
Table 4
Proposed DWSRF Loan #D311619 of $1,400,000 less $210,000 or $1,190,000 Principal
DWSRF Base
Interest Rate
First Year Payment
First Year Payment +
Program Loan Term
10% Coverage
ears
30
2.0% + 0.5% admin
$58,856
$64,741
fee on outstanding
principal balance
The proposed 30 year DWSRF loan of $1,190,000 annual principal and interest would be $58,856.
Principal and Interest repayments of SRF loans are protected by intercept statute Neb. Rev. Stat. §75-
1503, which allow the Department to recover delinquent loan payments by intercepting state funds that are
paid to the City of Blair.
The projected monthly water rate utilizing the estimated household water use of 8,220 gallons equals
$20.91 or $250.92 annually. This projected household water rate total is 0.49% of Blair's 2014 median
household income of $51,098 and is below EPA's 2.5% upper level of water rate affordability.
27
ATTACHMENT D
LIST OF FEDERAL LAWS AND AUTHORITIES
ENVIRONMENTAL:
- Archeological and Historical Preservation Act of 1974, PL 93-291, 16 U.S.C. §469a-1
- Clean Air Act, PL 95-95, as amended, 42 U.S.C. 7506(c)
- Coastal Barrier Resources Act, PL 97-348, 96 Stat. 1653, 16 U.S.C. 3501 et seq.
- Coastal Zone Management Act of 1972, PL 92-583, as amended, 16 U.S.C. §1451 et seq.
- Endangered Species Act, PL 93-205, as amended, 16 U.S.C. 1531, et seq.
- Essential Fish Habitat Consultation Process Under the Magnuson -Stevens Fishery Conservation and Management
Act, PL 94-265, as amended, 16 U.S.C. §1801 et seq.
- Executive Order 11988, Floodplain Management, as amended; Executive Order No. 12148, as amended
- Executive Order 11990, Protection of Wetlands, as amended; Executive Order No. 12608, as amended
- Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low -Income
Populations, as amended
- Farmland Protection Policy Act, PL 97-98, 7 U.S.C. §4201 et seq.
- National Environmental Policy Act, PL 91-190, 42 U.S.C. §4321 et seq.
- National Historic Preservation Act of 1966, PL 89-665, as amended, 16 U.S.C. §740 et seq.
- Safe Drinking Water Act, as amended, PL 93-523, as amended, 42 U.S.C. 300f et seq.
- U.S. Fish & Wildlife Service National Wetlands Inventory
- Wild and Scenic Rivers Act, PL 90-542, as amended, 82 Stat. 913, 16 U.S.C. §1271 et seq.
ECONOMIC:
- Demonstration Cities and Metropolitan Development Act of 1966, PL 89-754, as amended, 42 U.S.C. §3331 et seq.
- Executive Order 12549, Debarment and Suspension, as amended
- Executive Order 13202, as amended; Executive Order 13208, as amended
- Section 306 of the Clean Air Act and Section 508 of the Clean Water Act, including Executive Order 11738,
Administration of the Clean Air Act and the Federal Water Pollution Control Act, with Respect to Federal Contracts,
Grants, or Loans, as amended
- Uniform Relocation and Real Property Acquisition Policies Act of 1970, PL 91-646, as amended, 42 U.S.C. §§4601-
4655
SOCIAL LEGISLATION:
- Age Discrimination Act, PL 94-135, 42 U.S.C. §6102
- Department of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations
Act, PL 102-389
- Executive Order 11246, Equal Employment Opportunity, as amended
- Executive Orders 11625, 12138, and 12432 Women's and Minority Business Enterprise, as amended
- Section 129 of the Small Business Administration Reauthorization and Amendment Act of 1988, PL 100-590
- Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. §794
- Section 13 of the Federal Water Pollution Control Act Amendments of 1972, 33 U.S.C. §1251
- Title VI of the Civil Rights Act of 1964, PL 88-352, 42 U.S.C. §200d
MISCELLANEOUS AUTHORITY:
- Nebraska Drinking Water State Revolving Loan Fund #FS - 997805
*The list of Federal Laws and Authorities is based upon the EPA's listing of "Additional information on Cross -Cutting
Federal Authorities" (http://water.epa.gov/grants_ funding/dwsrf/xcuts.cfm) and the EPA's "Cross -Cutting Federal
Authorities: A Handbook on Their Application in the Clean Water and Drinking Water State Revolving Fund Programs"
(October 2013; http://www2.epa.gov/sites/production/files/2015-08/documents/crosseutterhandbook.pdD as of October
12, 2015. This list is subject to change based upon the federal authorities of the EPA.
28
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$ L g1 A LLP
ATTORNEYS AT LAW
May 7, 2018
Nebraska Department of Environmental Quality
Suite 400
1200 N Street, The Atrium
Post Office Box 98922
Lincoln, Nebraska 68509-8922
Attention: Wastewater Facilities Section
Water Quality Division
Ladies and Gentlemen:
1700 Farnam Street
Suite 1500
Omaha, NE 68102-2068
Tel: 402.344.0500
Fax: 402.344.0588
www.bairdholm.com
We have acted as Bond Counsel in connection with the execution and delivery by the City of Blair,
Nebraska, a city of the first class of the State of Nebraska (the "Municipality") of a Loan Agreement (Governmental
Borrower), NDEQ Project No. D311619 (the "Loan Agreement") between the Municipality and the Nebraska
Department of Environmental Quality ("NDEQ") and the issuance of a promissory note pursuant thereto (the
"Note") by the Municipality to NDEQ. All terms used in this opinion letter and not defined shall have the meanings
given to them in the Loan Agreement.
In this connection, we have examined the following:
(a) certified copies of the proceedings of the Mayor and Council of the Municipality
showing the passage and approval of Ordinance No. 2351 on March 27, 2018, authorizing the
Note and the Loan Agreement (the "Ordinance"), as certified by the City Clerk of the
Municipality;
(b) an executed counterpart of the Loan Agreement;
(c) the executed Note; and
(d) such other documents as we deemed relevant and necessary in rendering this
opinion.
As to questions of fact material to our opinion, we have relied upon the covenants and representations set
forth in the Loan Agreement, the certified proceedings and other certifications of public officials furnished to us
without undertaking to verify the same by independent investigation.
Based upon the foregoing, we are of the opinion as of the date hereof and under existing law that:
1. The Municipality is a city of the first class duly organized and validly existing under the laws of
the State of Nebraska.
Providing Exceptional Legal Service Since 1873
Nebraska Department of Environmental Quality
May 7, 2018
Page 2
2. The Municipality is a governmental unit, as such term is used in Section 141(b)(6) of the Internal
Revenue Code of 1986, as amended.
3. The Municipality has the power and authority to enter into the Loan Agreement, to issue the Note,
to borrow the entire principal amount provided for in Section 2.01 of the Loan Agreement (the "Loan Amount") and
to perform its obligations under the Loan Agreement and the Note.
4. The Loan Agreement and the Note have been duly authorized, executed and delivered by the
Municipality and are, and would be if the entire Loan Amount were advanced to the Municipality pursuant to the
Loan Agreement on the date of this opinion, valid and legally binding special obligations of the Municipality,
payable solely from the sources provided therefor in the Loan Agreement, enforceable in accordance with their
respective terms, except to the extent that the enforceability thereof may be limited by laws relating to bankruptcy,
insolvency or other similar laws affecting creditors' rights generally and general principles of equity.
5. Pursuant to Neb. Rev. Stat. §18-1803 through 18-1805, Neb. Rev. Stat. §10-1101 et seq., the
Ordinance and the Loan Agreement create a valid lien on the funds pledged by the Municipality pursuant to
Section 3.02 of the Loan Agreement for the security of the Loan Agreement and the Note and no other debt of the
Municipality is secured by a superior lien on such funds.
6. The Municipality has obtained or made all approvals, authorizations, consents or other actions of,
and filings, registrations or qualifications with, the Municipality or any other government authority which are legally
required to allow the Municipality to enter into and perform its obligations under the Loan Agreement and the Note
and borrow the full Loan Amount pursuant to the Loan Agreement and the Note.
It is to be understood that the rights of the holder of the Note and the Loan Agreement and the priorities and
enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium, extension, compromise
and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent applicable and that their
priorities and enforcement may also be subject to the exercise of judicial discretion in appropriate cases.
This opinion letter, and the opinions expressed in it, are intended only for the benefit of the addressees
identified on the first page hereof. No other person may rely on any opinion expressed without our prior written
authorization.
Very truly yours,
BAIRD HOLM LLP /f
By: �'" 1 i t,
TJM/jrr
DOCS/2070639.1
ATTACHMENT F
PROMISSORY NOTE OF BLAIR, NEBRASKA
FOR VALUE RECEIVED, the undersigned (the "Borrower") promises to pay, but solely from the
sources described herein, to the order of the Nebraska Department of Environmental Quality ("NDEQ"), or its
successors and assigns, the principal sum of not to exceed $1,400,000 (less $210,000 for loan forgiveness)
to the extent disbursed pursuant to Section 2.01 and Section 2.04 of the Loan Agreement No. D311619 ("the
--Loan Agreement'); with interestoneach such amount until paid, as provided in Section 2.03 of the Loan
Agreement between NDEQ and the Borrower. In addition, the Borrower shall pay an Administrative Fee on
the outstanding principal amount of this Note at the rate of 0.5% per annum as provided in the Loan
Agreement. The said principal and interest and Administrative Fee shall be payable in semiannual
installments each payable on December 15 and June 15 of each year in accordance with Section 2.05 of the
Loan Agreement. Each installment shall be in the amount set forth opposite its due date in Attachment A to
the Loan Agreement. The Borrower shall pay any penalty or additional interest due pursuant to Section
2.05(d) of the Loan Agreement.
All payments under this Note shall be payable at the offices of NDEQ in Lincoln, Nebraska, and upon
the assignment of this Note to NIFA, at the principal corporate trust office of a Trustee designated by NIFA,
or such other place as NDEQ may designate in writing.
This Note is issued pursuant to and is secured by the Loan Agreement and Ordinance No. 2351 of
the City of Blair, Nebraska (the Ordinance), the terms and provisions of which are incorporated herein by
reference.
All payments of principal of and interest on this Note and other payment obligations of the Borrower
hereunder shall be limited obligations of the Borrower payable solely out of the System Revenues (as defined
in the Loan Agreement) on a parity with revenue bonds issued pursuant to Ordinance No. 2351 and other
revenue bonds now or thereafter outstanding as permitted under the terms of said Ordinance, shall not be
payable out of any other revenues of the Borrower. The obligations of the Borrower under this Note shall
never constitute or give rise to a.charge against its general credit or taxing power.
If default be made in the payment of any installment due under this Note or by the occurrence of any
one or more of the Events of Default specified in Article V of the Loan Agreement and if such Event of
Default is not remedied as therein provided, or failure to comply with any provision of Ordinance No. 2351,
NDEQ then, or at any time thereafter, may give notice to the Borrower that all unpaid amounts of this Note
then outstanding, together with all other unpaid amounts outstanding under the Loan Agreement, are due
and payable immediately, and thereupon, without further notice or demand, all such amounts shall become
and be immediately due and payable. Failure to exercise this option shall not constitute a waiver of the right
to exercise the same at any time in the event of any continuing or subsequent default.
The Borrower hereby waives presentment for payment, demand, protest, notice of protest and notice
of dishonor.
31
m
This Note and all instruments securing the same are to be construed accordiev-46 the laws of the
State of Nebraska. Signed and sealed this! th day of r , 1 12018.
[SEAL]
BLAIR, NEBRASKA
I.-
Attest t to L Title N -j Mayor
Clerk
NEBRASKA DEPA TCIENT OF
ENVIRONMENTAL Q' ALITY
By
Title Director
Date 5-�o-1%
Pursuant to the Pledge Agreement dated as of as amended (the "Pledge
Agreement"), by and between NDEQ and the Nebraska Investment Finance Authority ("NIFA"), and the
dated as of as supplemented and amended, by and between
NIFA as trustee, NDEQ hereby assigns, grants and conveys any and all of
NDEQ's rights, title and interest in this Note to NIFA, except as provided in the Pledge Agreement, and NIFA
hereby assigns such rights, title and interest to the Trustee and any successor Trustee.
NEBRASKA INVESTMENT FINANCE AUTHORITY
By—
Title
Attest Date
32
ATTACHMENT G
CERTIFICATE OF BLAIR, NEBRASKA
The following certifications are made in connection with the Loan Agreement No. D311619, (the
"Loan Agreement") between the Nebraska Department of Environmental Quality ("NDEQ") and Blair,
Nebraska (the Borrower) for the purpose of establishing compliance by the Borrower with requirements for
the maintenance of the tax exemption of interest on any bonds (the "Bonds") which may be from time to time
issued by the Nebraska Investment Finance Authority ("NIFA") to provide funds for deposit in the Loan Fund
(as defined in the Loan Contract).
WHEREFORE, the undersigned hereby certifies on behalf of the Borrower to NDEQ, and any trustee
for the Bonds, as follows:
The undersigned is authorized to make the following certifications on behalf of the Borrower.
2. The Borrower represents that it reasonably expects that the design and construction of the
Project, as defined in the Loan Agreement, will commence within six months from the execution of the Loan
Agreement and that the design and construction of the Project will proceed with due diligence thereafter to
completion.
3. The proceeds of the loan pursuant to the Loan Agreement will be used to construct a facility
that will be owned and operated by the Borrower. There will be no contracts for the use of the facility other
than contracts on a rate scale basis. Specifically, the Borrower represents that there will be no contracts for
use of the Project that will require a non-governmental unit to make payments to the Borrower without regard
to actual use of the Project.
Dated this? day of t 2018.
BLAIR, NEBRASKA
By
Title Mayor
33
ATTACHMENT H
ADDITIONAL COVENANTS AND REQUIREMENTS
34
LOAN FORGIVENESS AWARD AND CONDITIONS
FROM THE NEBRASKA DEPARTMENT OF ENVIRONMENTAL QUALITY
TO THE BLAIR, NEBRASKA
NDEQ PROJECT NUMBER D311619
THIS AGREEMENT is entered into by and between the Nebraska Department of Environmental Quality
(NDEQ) and the City of Blair, Nebraska (hereinafter "Recipient").
This Loan Forgiveness is provided from grant funds awarded to the State of Nebraska by the Environmental
Protection Agency for purposes of achieving compliance with provisions of the Federal Safe Drinking Water
Act and furthering the activities of the Drinking Water State Revolving Loan Fund (DWSRF) Program. It is
part of the financing package offered by NDEQ and is provided in conjunction with the Loan Agreement,
DWSRF Project No. D311619, (hereinafter "Loan Agreement").
PART I: LOAN FORGIVENESS AWARD
The State of Nebraska, Department of Environmental Quality, hereby awards Loan Forgiveness in an
amount not to exceed two hundred ten thousand dollars ($210,000.00) to the Recipient, available
subsequent to receipt of loan funds provided under the Loan Agreement for the construction of the eligible
Public Water System (PWSS) project described therein. The Loan Forgiveness consists of federal funds
provided in accordance with the Drinking Water State Revolving Fund Program Guidelines, Rules and
Regulations for the Wastewater Treatment Facilities and Drinking Water Construction Assistance Programs
(Title 131, NDEQ), and the procedures developed in the SRF SFY 2018 Intended Use Plan (IUP) to
determine the appropriate percentage for Loan Forgiveness based on the Recipient's ability to pay. The
Loan Forgiveness amount may be changed by the Nebraska Department of Environmental Quality if the
eligible project amount is changed due to the actual construction bid price, construction change orders, or
other circumstances which would affect the project costs or eligibility.
PART II: LOAN FORGIVENESS CONDITIONS
1. COSTS COVERED BY LOAN FORGIVENESS
Loan Forgiveness will constitute up to 15.00% of eligible costs incurred for planning, designing, and
constructing the project described in the Loan Agreement, up to a ceiling of $210,000.00 of the eligible
DWSRF project loan amount of $1,400,000.00. The percentage is set in accordance with Appendix F of the
SRF SFY 2018 IUP, DWSRF Loan Forgiveness Allocation Determination Procedures.
2. COSTS NOT COVERED BY LOAN FORGIVENESS
Loan Forgiveness will not fund costs for any ineligible municipal improvements.
3. ADMINISTERED AS DWSRF LOAN PROJECT
This project will be administered by NDEQ as a DWSRF loan project. The Recipient will comply with all
terms and conditions found in the Loan Agreement.
4. DISBURSEMENT
Disbursements identified for Loan Forgiveness will be for the costs described in Paragraph 1 above and
made concurrently with disbursements under the Loan Agreement. Disbursement requests maybe
submitted as provided in the Loan Agreement for eligible costs incurred for the project. Requests must be
made on the forms provided and must be accompanied by the contractor's pay estimate and other applicable
invoices. Total funds disbursed on this project will not exceed the amount of funds provided by the Loan
Agreement until the NDEQ approved user charge system/water rate ordinance has been enacted and
implemented by the Recipient.
35
5. FORFEITURE AND REPAYMENT OF FUNDS
Violation of any of the provisions of this agreement or failure of the Recipient to complete and adequately
maintain the project may result in the forfeiture of any funds not disbursed and recovery of any or all funds
disbursed. Cancellation of the Loan Agreement, pursuant to Article V, Section 5.02(a) of the Loan
Agreement, shall result in annulment of this Loan Forgiveness agreement and a demand that any disbursed
funds be returned to the State of Nebraska immediately.
6. PREPAYMENT OF THE LOAN PROHIBITION
The borrower is prohibited from prepayment of the loan, together with accrued interest in whole or in part
within 5 years of the loan date. Prepayment within 5 years shall result in annulment of this Loan Forgiveness
Agreement and a demand that any disbursed funds be returned to the State of Nebraska immediately.
7. AMENDMENT
Changes to this agreement shall be by written amendment signed by both parties.
8. EFFECTIVE DATE
This agreement takes effect when all documents that are part of the financing package described in this
agreement are signed by both parties.
9. GOVERNING LAW
This agreement shall be governed and construed in accordance with the laws of the State of Nebraska.
PART III: CERTIFICATION AND ACCEPTANCE
1. ELIGIBILITY FOR LOAN FORGIVENESS
Loan Forgiveness eligibility, as defined in Appendix F of the SRF SFY 2018 IUP, is dependent on the City's
Median Household Income. The Recipient will be required to submit and receive approval from NDEQ of its
user charge system/water rate ordinance and enact such approved ordinance by the date of Initiation of
Operation of the project.
2. OVERPAYMENT
Acceptance of any payments constitutes an agreement by the Recipient that the amounts, if any, found by
the state to be overpaid, shall be immediately refunded or credited in full to the State of Nebraska.
IN WITNESS THEREOF, the parties hereto have caused this Loan Forgiveness agreement to be executed
and delivered as of the date set forth below.
BLAI R,
NEBRASKA
By
Title
Mayor
Date
t4l 7, P
36
NEBRASKA UEPAWNffiNT OF
QI
Title I, / Director
j
Date
CLOSING CERTIFICATE
The undersigned hereby certify that they are the Mayor, City Cleric and City Treasurer,
respectively, of the City of Blair, in the State of Nebraska (the "City"), and hereby further certify as
follows:
1. Transcript of Proceedings. Annexed to this certificate is a true and correct transcript
of the proceedings of the Mayor and Council of the City relating to Ordinance No. 2351 (the
"Ordinance") authorizing the issuance of the City's Water System Revenue Bond, Series 2018, in
form of and evidenced by the City's Promissory Note, dated April 26, 2018, in the principal amount
of $1,400,000 (the "Note"), payable to the Nebraska Department of Environmental Quality
("NDEQ") and the related Loan Agreement (Goverrunental Borrower) between NDEQ and the City
(NDEQ Project No. D311619), dated as of April 26, 2018 (the "Loan Agreement"). All of the
proceedings of the City and of the Mayor and Council thereof which are set out in the annexed and
foregoing transcript have been fully recorded in the journal of proceedings of the City and Mayor
and Council thereof. The undersigned City Clerk has carefully compared the arinexed and
foregoing transcript with said journal and with the records and files of the City which are in her
official custody and said transcript is a full, true and complete copy of said journal, records and files
which are set out therein. The undersigned City Clerk has made a diligent search and examination
of said journal, records and files which are in her official custody and finds and certifies that the
same contain no proceedings of the City or of the Mayor and Council thereof had precedent to or
referring to the issuance of the Note or the authorization, execution and delivery of the Loan
Agreement other than the proceedings set out in said transcript. Said transcript contains all of the
proceedings had or done by the City and the Mayor and Council thereof previous to the
authorization, execution and delivery of the Note and Loan Agreement, relative thereto.
2. Notices; Public Meeting. Advance notice for each of the meetings shown in said
transcript was given by publication as set forth in the foregoing transcript. All of the subjects
included in said transcript were contained in the agenda for the meetings shown, which agenda were
kept continually current and readily available for public inspection at the City Clerk's office for each
of the respective meetings; such subjects were contained in said agenda for at least 24 hours prior to
each respective meeting; a current copy of the Nebraska Open Meetings Act was available and
accessible to members of the public, posted during the meeting or meetings reflected in the
foregoing transcript in the room in which such meeting or meetings were held and all in
attendance at such meeting or meetings were informed that such copy of the Nebraska Open
Meetings Act was available for review and were informed at the beginning of the meeting of the
location of such copy in the room in which such meeting was being held; at least one copy of all
ordinances, resolutions and other reproducible written materials, for which actions are shown in said
proceedings, was made available for examination and copying by members of the public at the
meeting in which such actions were taken; the minutes of the Mayor and Council from which the
foregoing proceedings have been extracted were, for each meeting shown, in written form and
available for public inspection within 10 working days and prior to the next convened meeting of
said body; all news media requesting notification of meetings of said body were provided with
advance notice of the times and places of such meetings and the subjects to be discussed. Advance
notice for each meeting shown in said transcript, including notice of agenda subjects, was given to
all members of the Mayor and Council, as and to the extent required by law. All actions taken by the
Mayor and Council referred to in said transcript were taken at a public meeting while open to the
attendance of the public.
3 Signatures. The undersigned Mayor and City Cleric did officially sign the Note and
the undersigned Mayor did officially sign the Loan Agreement, by our manual signatures on behalf
of the City, being on the date of such signatures and on the date of the actual delivery of the Note
and the Loan Agreement, the duly chosen, qualified and acting officers indicated therein and
authorized to execute the same. The Note has been further executed by having affixed thereto the
seal of the City.
4. Absence of Litigation, Etc. No litigation is now pending or threatened to restrain or
enjoin the execution, issuance and delivery of the Note or the Loan Agreement nor in any manner
questioning the proceedings or authority under which the Note are issued or under which the Loan
Agreement is entered into or affecting the validity of the Note or the Loan Agreement thereunder;
no litigation is now pending or threatened in any way questioning the City's authority to establish
and collect rates and charges for the services provided by its waterworks plant and system,
including all additions and improvements thereto hereafter made or acquired by the City
(collectively, the "Water Systern ") nor is there pending or threatened any litigation against the City
relating to Water System or any part thereof which materially affects any of said Water System or
the properties, financial condition or revenues thereof; neither the corporate existence or boundaries
of the City nor the title of its present officers to their respective offices is being contested; no
authority or proceedings for the issuance of the Note or relating to the Loan Agreement have been
repealed, revoked or rescinded as of the date hereof and no petition for referendum has been filed
with the City Clerk relating to the Ordinance or any measure included in said proceedings or to any
measure related to the Note or the Loan Agreement.
5. Requisite Approvals, Etc. The City has obtained or made all approvals,
authorizations, consents or other actions of, and filings, registrations or qualifications with the
City or any other government authority which are required to allow the City to enter into and
perform its obligations under the Loan Agreement and the Note and borrow the full principal
amount pursuant to the Loan Agreement and the Note.
6. Affirmation of Findings and Representations. The undersigned hereby affirtn the
findings and representations of the City set out in the Ordinance and in the Loan Agreement
(including all attachments thereto pertaining to the City and its Water System), with the
understanding that the same (as well as the matters set out in this certificate) will be relied upon by
counsel in its delivery of the approving opinion required by NDEQ.
[NO FURTHER TEXT ON THIS PAGE]
IN WITNESS WHEREOF, we have hereunto affixed our official signatures as of May ,
2018.
(SEAL)
May
At'4
City Clerk
City Treasurer
[SIGNATURE PAGE TO CLOSING CERTIFICATE]
DOCS/2065446.1
EXTRACT FROM MINUTES
A regular meeting of the Mayor and City Council of the City of Blair, Nebraska, was held at
City Council Chambers, City Hall, 218 South 16th Street, Blair, Nebraska in said City on the 27th
day of March, 2018, at 7:00 o'clock p.m. Present were: Mayor: Realph; Council Members:
Shepard, Stewart, Hansen, Willis, Andersen, Hall and Jensen. Absent: Wolff.
Notice of the meeting was given in advance thereof by publication, the designated method
for giving notice, as shown by the Affidavit of Publication attached to these minutes. Notice of this
meeting was given to the Mayor and all members of the Council and a copy of their
acknowledgment of receipt of notice and the agenda is attached to the minutes. Availability of the
agenda was communicated in the advance notice and in the notice to the Mayor and Council of this
meeting. All proceedings hereafter shown were taken while the convened meeting was open to the
attendance of the public.
At the beginning of the meeting, the Mayor publicly stated to all in attendance that a current
copy of the Nebraska Open Meetings Act was available for review and indicated the location of
such copy posted in the room where the meeting was being held.
A discussion was held concerning the proposed additional financing to be provided for the
City by the Nebraska Department of Environmental Quality for the City's water system.
Councilmember Stewart then introduced Ordinance No. 2351 entitled:
AN ORDINANCE AUTHORIZING THE ISSUANCE OF A WATER SYSTEM REVENUE
BOND, SERIES 2018, OF THE CITY OF BLAIR, NEBRASKA, IN THE PRINCIPAL
AMOUNT OF NOT TO EXEED ONE MILLION FOUR HUNDRED THOUSAND DOLLARS
($1,400,000), IN THE FORM OF A PROMISSORY NOTE ISSUED TO EVIDENCE
INDEBTEDNESS TO THE NEBRASKA DEPARTMENT OF ENVIRONMENTAL QUALITY;
APPROVING THE FORM OF SAID BOND (ISSUED AS A SINGLE PROMISSORY NOTE)
AND RELATED LOAN AGREEMENT; PLEDGING AND HYPOTHECATING THE
REVENUES AND EARNINGS OF THE WATERWORKS PLANT AND WATER SYSTEM
OWNED OR TO BE OWNED BY THE CITY FOR THE PAYMENT OF SAID BOND;
PROVIDING FOR THE ISSUANCE AND SALE OF SAID BOND; AUTHORIZING THE
DELIVERY OF SAID BOND AND RELATED LOAN AGREEMENT TO THE NEBRASKA
DEPARTMENT OF ENVIRONMENTAL QUALITY; PROVIDING FOR THE COLLECTION,
SEGREGATION AND APPLICATION OF THE REVENUES OF SAID WATERWORKS
PLANT AND SYSTEM; DETERMINING THAT INTEREST ON SAID BOND SHALL NOT BE
EXCLUDABLE FROM GROSS INCOME FOR PURPOSES OF FEDERAL INCOME
TAXATION; PROVIDING FOR THE DISPOSITION OF THE PROCEEDS OF SAID BOND
AND ORDERING THE ORDINANCE PUBLISHED IN PAMPHLET FORM.
and Council Member Stewart moved that the statutory rule requiring reading on three different days
be suspended. Council Member Hall seconded the motion to suspend the rules and upon roll call
vote on the motion the following Council Members voted YEA: Stewart, Shepard, Hansen, Willis,
Andersen, Hall and Jensen. The following voted NAY: None. The motion to suspend the rules was
adopted by three-fourths of the Council and the statutory rule was declared suspended for
consideration of said ordinance.
Said ordinance was then read by title and thereafter Council Member Stewart moved for
final passage of the ordinance, which motion was seconded by Council Member Willis. The Mayor
then stated the question was "Shall Ordinance No. 2351 be passed and adopted?" Upon roll call
vote, the following Council Members voted YEA: Stewart, Shepard, Hansen, Willis, Andersen, Hall
and Jensen. The following voted NAY: None. The passage and adoption of said ordinance having
been concurred in by a majority of all members of the Council, the Mayor declared the ordinance
adopted and the Mayor in the presence of the Council signed and approved the ordinance and the
Clerk attested the passage and approval of the same and affixed her signature thereto and ordered
the ordinance to be published as provided therein. A true, correct and complete copy of said
ordinance is as follows:
2
ORDINANCE NO. 2351
AN ORDINANCE AUTHORIZING THE ISSUANCE OF A WATER SYSTEM REVENUE
BOND, SERIES 2018, OF THE CITY OF BLAIR, NEBRASKA, IN THE PRINCIPAL
AMOUNT OF NOT TO EXEED ONE MILLION FOUR HUNDRED THOUSAND DOLLARS
($1,400,000), IN THE FORM OF A PROMISSORY NOTE ISSUED TO EVIDENCE
- INDEBTEDNESS TO THE NEBRASKA. DEPARTMENT OF ENVIRONMENTAL QUALITY;
APPROVING THE FORM OF SAID BOND (ISSUED AS A SINGLE PROMISSORY NOTE)
AND RELATED LOAN AGREEMENT; PLEDGING AND HYPOTHECATING THE
REVENUES AND EARNINGS OF THE WATERWORKS PLANT AND WATER SYSTEM
OWNED OR TO BE OWNED BY THE CITY FOR THE PAYMENT OF SAID BOND;
PROVIDING FOR THE ISSUANCE AND SALE OF SAID BOND; AUTHORIZING THE
DELIVERY OF SAID BOND AND RELATED LOAN AGREEMENT TO THE NEBRASKA
DEPARTMENT OF ENVIRONMENTAL QUALITY; PROVIDING FOR THE COLLECTION,
SEGREGATION AND APPLICATION OF THE REVENUES OF SAID WATERWORKS
PLANT AND SYSTEM; DETERMINING THAT INTEREST ON SAID BOND SHALL NOT BE
EXCLUDABLE FROM GROSS INCOME FOR PURPOSES OF FEDERAL INCOME
TAXATION; PROVIDING FOR THE DISPOSITION OF THE PROCEEDS OF SAID BOND
AND ORDERING THE ORDINANCE PUBLISHED IN PAMPHLET FORM.
BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF BLAIR,
NEBRASKA, AS FOLLOWS:
Section 1. The Mayor and Council of the City of Blair, Nebraska (the "City") hereby find
and determine as follows:
(a) The City owns and operates a waterworks plant and system (which plant and
system, together with any additions, extensions and improvements thereto hereafter made are
hereinafter referred to as the "Water System") which represents a revenue-producing undertaking
of the City.
(b) the Nebraska Department of Environmental Quality ("NDEQ") has approved a
project of the City for its Water System consisting of the replacement of the South Pump Station,
which lacks capacity to meet the current user demand, and to replace approximately 3,000 feet of
water main along 16' Street, including all related work, land, testing, and engineering fees, and
such project has been designated as Project No. D311619 (the "Project") and has agreed to lend
from monies in NDEQ's Drinking Water Facilities Loan Fund or from other sources in the total
principal amount of not to exceed $1,400,000 (the "2018 NDEQ Loan") and in connection with
such loan has agreed to accept one or more bonds payable from the revenues of the Water System to
be evidenced by and in the form of a single promissory note (the "NDEQ Note" and also sometimes
referred to herein as the "Series 2018 Bond"), with such loan to be governed as to terms and
conditions by an agreement with NDEQ entitled "Loan Agreement (Governmental Borrower)
Between Nebraska Department of Environmental Quality and the City of Blair, Nebraska, NDEQ
Project No. D311619" (the "NDEQ Contract").
3
(c) The City has issued and outstanding the following bonds which are a lien upon
and secured by a pledge of the revenue and earnings of the Water System (collectively, the
"Outstanding Bonds"):
i. Water System Revenue Bond, Series 2010, dated August 12, 2010, issued
pursuant to Ordinance No. 2187 of the City (the "2010 Ordinance"), in the
original drawable principal amount of $2,341,400 (the "2010 Bond"),
issued to evidence a loan from the Nebraska Department of Environmental
Quality ("NDEQ"), of which the remaining principal balance outstanding
is $2,551,099;
ii. Water System Revenue Bonds, Series 2010B, dated September 28, 2010,
issued pursuant to Ordinance No. 2191 of the City (the "2010BC
Ordinance"), in the original principal amount of $6,500,000 (the "2010B
Bonds"), of which the remaining principal balance outstanding is
$6,500,000;
iii. Water System Revenue Bonds, Series 2010C (Taxable Interest), dated
September 28, 2010, issued pursuant to the Series 201OBC Ordinance in
the original principal amount of $770,000 (the "2010C Bonds"), of which
the remaining principal balance outstanding is $390,000;
iv. Water System Revenue Bonds, Taxable Series 2012, dated June 5, 2012,
issued pursuant to Ordinance No. 2217 of the City (the "2012 Ordinance")
in the original principal amount of $9,480,000 (the "2012 Bonds"), of
which the remaining principal balance outstanding is $7,860,000; and
V. Water System Revenue Bonds, Series 2016, dated August 24, 2016, issued
pursuant to Ordinance No. 2305 of the City (the "2016 Ordinance") in the
original principal amount of $5,550,000 (the "2016 Bonds"), of which the
remaining principal balance outstanding is $5,195,000; and
vi. Water System Revenue Bonds, Series 2017, dated March 28, 2017, issued
pursuant to the 2016 Ordinance in the original principal amount of
$3,460,000 (the "2017 Bonds"), of which the remaining principal balance
outstanding is $3,460,000.
The 2010 Ordinance, the 2010 BC Ordinance, the 2012 Ordinance and the 2016 Ordinance are
referred to in this Ordinance collectively as the "Outstanding Parity Bond Ordinances".
(d) Under the terms of the Outstanding Parity Bond Ordinances the issuance of
"Additional Bonds" which are payable on a parity with the Outstanding Bonds and equally and
ratably secured therewith are permitted provided that either (i) the "Net Revenues" (as defined in
each of such ordinances and as defined in this Ordinance) have been at least equal to 1.30 times
Ll
the "Average Annual Debt Service Requirements" (as defined in each of such ordinances and as
defined in this Ordinance) of the Outstanding Bonds and the Additional Bonds proposed to be
issued or (ii) the City shall have received a projection (the "Projection") made by a firm of
consulting engineers projecting that such "Net Revenues" in each of the three full fiscal years
after the issuance of such "Additional Bonds" will be at least equal to 1.35 time such "Average
Annual Debt Service Requirements" of the Outstanding Bonds and the proposed Additional
Bonds; and provided further that such Additional Bonds shall be issued pursuant to an ordinance
which shall provide for an increase in the monthly credits to Bond Payment Account sufficient to
pay, when due, the principal of and interest on the Outstanding Bonds and the proposed
Additional Bonds; with respect to such requirements the following determinations are hereby
made:
i. The "Net Revenues" of the Water System as defined in the Outstanding
Parity Bonds Ordinances for the fiscal year ended September 30, 2017 were
not less than $3,680,618.
ii. The "Average Annual Debt Service Requirements" of the Outstanding Bonds
and the proposed Series 2018 Bond (as defined below) are not more than
$1,422,972.
Said "Net Revenues" exceed 1.30 times said "Average Annual Debt Service
Requirements" of the Outstanding Bonds and of the proposed Series 2018
Bond.
iv. This Ordinance provides for an increase in the monthly credits into the Bond
Payment Account in amounts sufficient to pay, when due, the principal of and
interest on the Outstanding Bonds and such proposed Series 2018 Bond.
V. All applicable conditions required the Outstanding Parity Bonds Ordinances
precedent to the issuance of the Series 2018 Bond as an "Additional Bond"
under the terms of said ordinances do exist and have happened.
(e) in connection with the NDEQ Loan, as evidenced by the Series 2018 Bond, it is
necessary and advisable for the City to approve the execution and delivery of the NDEQ Contract
and the NDEQ Note in substantially the forms attached hereto;
(f) all conditions, acts and things required by law to exist or to be done precedent to the
issuance of the Series 2018 Bond as an Additional Bond of equal lien and standing with the
Outstanding Bonds and as provided for in the Outstanding Parity Bond Ordinances do exist and
have been done or are required to exist or to have been done, upon the fling and furnishing of
the Projection, in regular and due form and time as required by law.
Section 2. In addition to the definitions provided in parentheses elsewhere in this
Ordinance, the following definitions of terms shall apply, unless the context shall clearly indicate
otherwise:
5
"Additional Bonds" shall mean any and all bonds hereafter issued by the
City pursuant to the terms of this Ordinance which are equal in lien to the
Outstanding Bonds and the Series 2018 Bond, including any such bonds issued
pursuant to Section 6 and refunding bonds issued pursuant to Section 7, as and
when such bonds become equal in lien to the Outstanding Bonds and the Series
2018 Bond, according to their terms and the terms of said Sections 6 and 7.
"Average Annual Debt Service Requirements" shall mean that number
computed by adding all of the principal and interest due when computed to the
absolute maturity of the bonds for which such computation is required and
dividing by the number of years remaining that the longest bond of any issue for
which such computation is required has to run to maturity. In malting such
computation, the principal of any bonds for which mandatory redemptions are
scheduled shall be treated as maturing in accordance with such schedule of
mandatory redemptions.
"Deposit Securities" shall mean direct obligations of or obligations the
principal of and interest on which are unconditionally guaranteed by the United
States of America.
"Net Revenues" shall mean the gross revenues derived by the City from
the ownership or operation of the Water System, including investment income,
but not including any income from sale or disposition of any property belonging
to or forming a part of the Water System, less the ordinary expenses to the City of
operating and maintaining the Water System payable from the Operation and
Maintenance Account described in Section 4 of this Ordinance. Operation and
maintenance expenses for purposes of determining "Net Revenues" shall not
include depreciation, amortization (of financing expenses) or interest on any
bonds or other indebtedness. Net Revenues for all purposes of this Ordinance
shall be shown by an audit for the fiscal year in question as conducted by
independent certified public accountants. For purposes of this ordinance, whether
or not in accordance with applicable accounting principles, there shall not be
included in revenues or expenses gain or loss from the early extinguishment of
indebtedness, investment income from any securities deposited in escrow for the
defeasance of any bonds relating to the Water System or unrealized gain or loss
on securities held by the City's Water System. In the event that the City proposes
to issue Additional Bonds and the audit report for the most recently completed
fiscal year is not yet available, "Net Revenues" may be shown as of the most
recent fiscal year for which the audit report is available as supplemented by such
unaudited financial information as the City shall have available, provided that (i)
the lower amount of "Net Revenues" (as between that shown by the available
audit report and that shown by the unaudited financial information certified by
the City) shall be utilized for purposes of showing compliance with the
on
requirements for issuance of Additional Bonds and (ii) as of such time, the Series
2010B Bonds, the Series 2010C Bonds and the Series 2012 Bonds shall no longer
be outstanding.
Section 3. To provide for the payment of the costs of the Project, there shall be and there is
hereby ordered issued the Series 2018 Bond, in the forin of and evidenced by a single promissory
note (sometimes referred to in this Ordinance, according to the context, as the "NDEQ Note" and
sometimes as the "Series 2018 Bond") in the principal amount of not to exceed One Million Four
Hundred Thousand Dollars ($1,400,000), with such NDEQ Note to be substantially in such form
and to have such payment terms as are set forth in Exhibit A to this Ordinance, which exhibit is by
such reference incorporated herein as if fully set forth. In connection with the issuance of the
NDEQ Note, the City shall also enter into the NDEQ Contract in substantially the form set forth in
Exhibit B to this Ordinance, which exhibit is by such reference incorporated herein as if fully set
forth. The terms and conditions of the NDEQ Note and the NDEQ Contract are hereby approved
and the Mayor and the City Clerk are hereby authorized to execute and deliver the NDEQ Note and
the NDEQ Contract for and on behalf of the City in substantially the form presented but with such
changes from the forms presented and attached hereto as such officers shall deem appropriate for
and on behalf of the City.
Section 4. The revenues and earnings of the Water System are hereby pledged and
hypothecated for the payment of the Series 2018 Bond, the Outstanding Bonds and any
Additional Bonds and interest on such Series 2018 Bond, the Outstanding Bonds and any such
Additional Bonds, and the City does hereby agree with the holders of said Series 2018 Bond, the
Outstanding Bonds and any Additional Bonds as follows:
(a) BLAIR WATER SYSTEM FUND —The entire gross revenues and
income derived from the operation of the Water System, including pledges and
appropriations from other sources, if any, shall be set aside as collected and
deposited in a separate fund designated as the "Blair Water System Fund." For
purposes of allocating the monies in the Blair Water System Fund, the City shall
maintain the following accounts: (1) Bond Payment Account; (2) Operation and
Maintenance Account; (3) Debt Service Reserve Account (with sub -accounts
therein); and (4) Retained Revenues Account.
(b) BOND PAYMENT ACCOUNT - Out of the Blair Water System
Fund there shall be credited monthly on or before the first day of each month to
the Bond Payment Account, commencing with the first day of the month
VA
following the month in which the Series 2018 Bond is issued (the "Initial
Deposit Date") to the Bond Payment Account, the following amounts:
(1) during the period from January 1, 2018, until and including
that June 30 or December 31 (as the case may be with respect to the
earliest occurring of such dates) which immediately follows the
"Initiation of Operation" (as defined in the NDEQ Contract; in this
Ordinance hereafter referred to as the "Initiation of Operation") of
the Project an amount such that if the same amount were credited on
the first day of each calendar month from such date of credit until the
next payment date upon which any amount falls due on the NDEQ
Note, whether for principal or interest, the amount accumulated by
such monthly credits would equal the amount falling due on such
payment date on the NDEQ Note, provided, however, that such
credits shall be required only as and to the extent that such payments
are not provided from other sources including amounts advanced by
NDEQ pursuant to the NDEQ Contract and the NDEQ Note;
(2) during the period from and including that January I or July 1
(as the case may be with respect to the earliest occurring of such
dates) which immediately follows the Initiation of Operation until the
NDEQ Note has been paid in full an amount equal to one-sixth of the
installment amount (principal and interest) due on the next
installment payment date for the NDEQ Note;
(3) During such periods and in such amounts, all such
payments as are as required under the terms of the Outstanding
Parity Bond Ordinances with respect to the principal and interest
on the Outstanding Bonds.
The City Treasurer is hereby authorized and directed, without further
authorization, to withdraw monies credited to the Bond Payment Account, or if
the monies in such Account are insufficient, then from the Debt Service Reserve
Account (as and to the extent that amounts are available in a sub -account therein
designated in the authorizing ordinance) and next from the Retained Revenues
Account, an amount sufficient to pay, when due, the principal of and interest on
the Series 2018 Bond, the Outstanding Bonds or any Additional Bonds and to
transfer the appropriate amounts due to the respective direct payees and the
respective paying agent (as the case may be) for each issue of the Series 2018
Bond, the Outstanding Parity Bonds and any issues of Additional Bonds on or
before each principal and interest payment date the respective paying agents or
direct payees (as may be applicable) for any issues of Additional Bonds, on or
before each principal and interest payment date. Upon the issuance of any
Additional Bonds pursuant to this Ordinance, appropriate additional credits to
the Bond Payment Account shall be provided for sufficient to pay principal and
interest on said Additional Bonds.
(c) OPERATION AND MAINTENANCE ACCOUNT - After any
credits required to be made by the foregoing subparagraph (b) have been made
in full, out of the Blair Water System Fund there shall be monthly credited into
the Operation and Maintenance Account such amounts as the City shall from
time to time determine to be necessary to pay the reasonable and necessary
expenses of operating and maintaining the Water System, and the City may
withdraw funds credited to the Operation and Maintenance Account as
necessary from time to time to pay such expenses. As an operational expense
the City shall pay any and all administrative fees required to be paid in
connection with the NDEQ Loan or due under the NDEQ Contract.
(d) DEBT SERVICE RESERVE ACCOUNT - Within the Debt
Service Reserve Account there shall be established separate sub -accounts for
each series of bonds payable on a parity with the Series 2018 Bond and the
Outstanding Bonds from the revenues of the Water System, as shall be deemed
appropriate by the Mayor and Council in connection with each such issue. In
view of the provisions of the NDEQ Contract, it is hereby determined that no
sub -account shall be established for the Series 2018 Bond. For the Series 2010B
Bonds, the Series 2010C Bonds, the Series 2012 Bonds, the Series 2016 Bonds
and the Series 2017 Bonds there have previously been established separate sub -
accounts in accordance with the terms of the Series 201OB/C Ordinance, the
Series 2012 Ordinance and the Series 2016 Ordinance into which there has been
deposited and shall be maintained amounts set under the terms of the Series
201OB/C Ordinance, the Series 2012 Ordinance and the Series 2016 Ordinance
which shall be maintained as the required balances, respectively, so long as any
of the Series 2010B Bonds, the Series 2010C Bonds, the Series 2012 Bonds, the
Series 2016 Bonds and the Series 2017 Bonds remain outstanding in accordance
with the terms of the Series 201 OB/C Ordinance, the Series 2012 Ordinance and
the Series 2016 Ordinance. In issuing any series of Additional Bonds a separate
sub -account in the Debt Service Reserve Account shall be established for such
series of Additional Bonds under the terms of this Ordinance. The balance in
any such additional sub -account (which may be $0) may be funded from monies
on hand or from periodic deposits from revenues in the Blair Water System
Fund or from the proceeds of such Additional Bonds. Each sub -account in the
Debt Service Reserve Account shall be of equal standing with each other sub -
account in the ,Debt Service Reserve Account and available monies from the
Blair Water System Fund required to be credited to each such sub -account at
any time shall be allocated on a pro rata basis between sub -accounts then
requiring credits in accordance with the respective unpaid principal amounts
then outstanding for each such issue for which there is a sub -account requiring
credits. Each sub -account in the Debt Service Reserve Account shall constitute
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a separate fund held in trust by the City Treasurer for the separate benefit of the
issue of bonds for which it is established. Anything in this Subsection 4(d) to
the contrary notwithstanding, the amount required to be maintained in the Debt
Service Reserve Account or any sub -account therein shall not at any time
exceed the maximum amount permitted to be invested without yield restriction
under Section 148 of the Code or any successor provision or related statutory
limitation and applicable regulations of the United States Treasury Department.
(e) RETAINED REVENUES ACCOUNT Monies in the Blair Water
System Fund remaining after the credits required in the foregoing Subsections
(b), (c) and (d) shall be credited to the Retained Revenues Account. Monies in
the Retained Revenues Account may be used to make up any deficiencies in any
of the preceding Accounts, to retire any of the Series 2018 Bond, the
Outstanding Bonds or any Additional Bonds prior to their maturity, to pay
principal of and interest on any junior lien water system revenue bonds or notes
or to provide for any other lawfiil purpose of the City as directed by the Mayor
and City Council.
The provisions of this Section 4 shall require the City to maintain a set of books and records in
accordance with such accounting methods and procedures as are generally applicable to
municipal utility enterprises, which books and records shall show credits to and expenditures
from the several Accounts and sub -accounts required by this Section. Except as specified below
for the Debt Service Reserve Account, the City shall not be required to establish separate bank or
investment accounts for said Accounts. Monies credited to the Debt Service Reserve Account or
any sub -account therein shall, if maintained in a demand or time deposit account, be kept in a
separate account and not commingled with other City or Water System funds. If invested,
monies credited to the Debt Service Reserve Account or any sub -account therein may be
commingled with other City funds, including Water System funds, so long as the City maintains
books and records clearly identifying the specific investments, or portions thereof, which belong
to the Debt Service Reserve Account and specific sub -accounts therein. Monies in any of said
Accounts except the Debt Service Reserve Account may be invested in permissible investments
for a City of the class to which the City of Blair belongs as of the time of such investment.
Monies in the Debt Service Reserve Account or any sub -account therein may be invested in
Deposit Securities or in certificates of deposit, savings accounts or other interest bearing
accounts in banks which are members of the Federal Deposit Insurance Corporation, except that
whenever the amount so deposited exceeds the amount of the F.D.I.C. insurance available
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thereon, the excess shall be secured in the manner required by Section 16-715 R.R.S. Neb. 2012.
Investments made from or attributable, in whole or in part, to the Debt Service Reserve Account
shall mature or be redeemable at the option of the holder, without penalty, in not more than ten
years. Investments made from or attributable to the Bond Payment Account shall mature or be
- redeemable at the option of the holder by no later than the time monies are required for payments
due from such account. Income from or profit realized from investment for any Account or sub -
account shall be credited to such Account or sub -account until such Account or sub -account
contains any amount then required to be therein, and thereafter such income or profit shall be
transferred to the Blair Water System Fund and treated as other revenues from the operation of
the Water System.
The pledge of the revenues and earnings of the Water System provided for in this
Ordinance for the Series 2018 Bond, the Outstanding Bonds and any Additional Bonds, subject
to the right of the City to issue Additional Bonds as provided in this Ordinance and the
Outstanding Parity Bond Ordinances, is intended as a first and prior pledge of, lien on and
security interest in such revenues and earnings for the payment of principal of and interest on the
Series 2018 Bond, the Outstanding Bonds and any Additional Bonds, superior to any pledge or
promise made with respect to any other indebtedness of the City as to its Water System, and is
intended to be a full exercise of the powers of the City provided for in Sections 18-1803 to 18-
1805, R.R.S. Neb. 2012, as amended, with respect to its Water System.
Section 5. So long as any of the Series 2018 Bond, the Outstanding Bonds and any
Additional Bonds issued pursuant to this Ordinance shall remain outstanding and unpaid, the
City covenants and agrees to establish, revise, from time to time as necessary, and collect such
rates and charges for the water and water service furnished from the Water System adequate to
produce revenues and earnings sufficient at all times:
(a) To provide funds to pay, when due, the principal of and interest on
the Series 2018 Bond, the Outstanding Bonds and any Additional Bonds issued
pursuant to this Ordinance.
(b) To pay all proper and necessary costs of operation and maintenance
of the Water System and to pay for the necessary and proper repairs,
replacements, enlargements, extensions and improvements to the Water System,
including payment as the same fall due of any administrative fees related to the
Series 2018 Bond as described in the NDEQ Contract.
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(c) To provide fiends sufficient to make the credits into the Accounts
and at the times and in the amounts required by Section 4 of this Ordinance.
(d) To maintain Net Revenues in each fiscal year adopted by the City
for the Water System in an amount not less than 1.25 times the total amount of
principal paid or payable (exclusive of any principal redeemed prior to maturity
other than principal redeemed pursuant to a schedule of mandatory
redemptions) and interest falling due during such fiscal year on the Series 2018
Bond, the Outstanding Bonds and any Additional Bonds issued pursuant to this
Ordinance.
Section 6. To provide fiends for any purpose related to the Water System, the City
may issue Additional Bonds (other than such Additional Bonds issued for refunding purposes as
may be governed by Section 7 of this Ordinance) payable from the revenues of the Water System
having equal priority and on a parity with the Series 2018 Bond, the Outstanding Bonds and any
Additional Bonds then outstanding, only upon compliance with the following conditions:
(a) Such Additional Bonds shall be issued only pursuant to an
ordinance which shall provide for an increase in the monthly credits into the
Bond Payment Account in amounts sufficient to pay, when due, the principal of
and interest on the Series 2018 Bond, the Outstanding Bonds and any
Additional Bonds then outstanding and the proposed Additional Bonds.
(b) The City shall have complied with one or the other of the two
following requirements:
1) The Net Revenues derived by the City from its Water
System for the fiscal year next preceding the issuance of the
Additional Bonds shall have been at least equal to 1.30 times
the Average Annual Debt Service Requirements of the
Series 2018 Bond, the Outstanding Bonds and any
Additional Bonds, all as then outstanding, and of the
proposed Additional Bonds; or
2) The City shall have received a projection made by a
consulting engineer or firm of consulting engineers, or by a
certified public accountant or firm of certified public
accountants (either one of which shall be recognized as
having experience and expertise in municipal utility
systems) projecting that the Net Revenues of the Water
System in each of the three full fiscal years after the issuance
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of such Additional Bonds will be at least equal to 1.35 times
the Average Annual Debt Service Requirements of the
Series 2018 Bond, the Outstanding Bonds and any
Additional Bonds, all as then outstanding, and of the
proposed Additional Bonds. In making such projection, the
consulting engineer or accountant shall use as a basis the Net
Revenues of the Water System during the last fiscal year for
which an independent audit has been prepared and shall
adjust such Net Revenues as follows: (A) to reflect changes
in rates which have gone into effect since the beginning of
the fiscal year for which the audit was made, (B) to reflect
such engineer's or accountant's estimate of the net increase
over or net decrease under the Net Revenues of the Water
System for the fiscal year for which the audit was made by
reason of: (i) changes of amounts payable under existing
contracts for services; (ii) additional general income from
sales to customers under existing rate schedules for various
classes of customers or as such schedules may be revised
under a program of changes which has been adopted by the
Mayor and Council of the City; (iii) projected revisions in
costs for labor, wages, salaries, machinery, equipment,
supplies and other operational items; (iv) changes in the
amount of service to be supplied and any related
administrative or other costs associated with such changes
due to increased supply from the acquisition of any new
facility; (v) anticipated receipts from service to any
additional customer or customers for the Water System; and
(vi) such other factors affecting the projections of revenues
and expenses as the consulting engineer or accountant deems
reasonable and proper. Annual debt service on any proposed
Additional Bonds to be issued may be estimated by the
consulting engineer or certified public accountant in
projecting Average Annual Debt Service Requirements, but
no Additional Bonds shall be issued requiring any annual
debt service payment in excess of the amount so estimated
by the consulting engineer or certified public accountant in
any final projections furnished to the City.
If the City shall find it desirable it shall also have the right when issuing Additional Bonds to
combine with its Water System any other utilities of the City authorized to be combined under
Sections 19-1305 through 19-1308 or 18-1803 through 18-1805 R.R.S. Neb. 2012, and to cause
all of the revenues of such combined utilities systems to be paid into the Blair Water System
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Fund, which fund may be appropriately redesignated, and to provide that all of the Series 2018
Bond, the Outstanding Bonds and any Additional Bonds previously issued, all as then
outstanding, and the proposed issue of Additional Bonds shall be payable from the revenues of
such combined utilities and shall stand on a parity and in equality as to security and payment,
provided, however, no utility shall be combined with the Water System as contemplated in this
paragraph unless the conditions of subsection 6(a) shall have been satisfied and the Net
Revenues of the combined utilities systems shall satisfy one or the other of the requirements for
Additional Bonds provided in subsection 6(b) above. For purposes of meeting such requirements,
the definition of Net Revenues shall be altered to include the gross revenues of the additional
utility or utilities and to take into consideration ordinary expenses of operating and maintaining
the additional utility or utilities. In making any projections, the consulting engineer or certified
public accountant shall take into consideration the factors described in 6(b)(2) above with respect
to such additional utility or utilities. Net Revenues of the additional utility or utilities shall be
based upon the report or reports of independent certified public accountants in the same manner
as is required under subsection 6(b) above.
Section 7. The City may issue refunding bonds, which shall qualify as Additional
Bonds under this Section 7, to refund any of the Series 2018 Bond, the Outstanding Bonds or
Additional Bonds without compliance with the provisions of subsection 6(b) above, provided
that, if any such Series 2018 Bond, Outstanding Bonds or Additional Bonds are to remain
outstanding after the issuance of such refunding bonds, the principal payments due in any
calendar year in which those bonds which are to remain outstanding mature, or in any calendar
year prior thereto, shall not be increased over the amount of such principal payments due in such
calendar years immediately prior to such refunding.
The City may also issue refunding bonds which shall qualify as Additional Bonds of
equal lien to refund any of the Series 2018 Bond, the Outstanding Bonds or Additional Bonds
then outstanding, provided, that if any such Series 2018 Bond, Outstanding Bonds or Additional
Bonds then outstanding are to remain outstanding after the application of the proceeds of the
refunding bonds to the payment of the bonds which are to be refunded, such issuance must
comply with the Net Revenues test set forth in Subsection 6(b)(1) of this ordinance and, if the
proceeds of such refunding bonds are not to be applied immediately to the satisfaction of the
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bonds which are to be refunded, then such refunding bonds must provide by their terms that they
shall be junior in lien to all of the Series 2018 Bond, Outstanding Bonds and any Additional
Bonds outstanding at the time of issuance of such refunding bonds until the time of application
of their proceeds to the satisfaction of the bonds which are to be refunded. In computing
-- - Average Annual Debt Service Requirements to show compliance with said Net Revenues test for
such refunding bonds, all payments of principal and interest due on such refunding bonds from
the time of their issuance to the time of application of the proceeds of such refunding bonds to
the satisfaction of the bonds which are to be refunded shall be excluded from such computation
to the extent that such principal and interest are payable from sources other than the revenues of
the Water System, such as bond proceeds or investment earnings on bond proceeds, or from
monies in the Retained Revenues Account, and all payments of principal and interest due on the
bonds which are to be refunded from and after the time of such application shall also be
excluded. For purposes of this paragraph of this Section 7, the time of application of the
proceeds of the refunding bonds to the satisfaction of the bonds which are to be refunded shall be
the time of deposit with the paying agent for such bonds which are to be refunded pursuant to
Section 10-126 R.R.S. Neb. 2012 (or any successor statutory provision thereto) or the time when
such bonds which are to be refunded under the terms of their authorizing ordinance or ordinances
are no longer deemed to be outstanding, whichever occurs sooner.
Section 8. The City hereby covenants and agrees that so long as any of the Series
2018 Bond, the Outstanding Bonds and any Additional Bonds are outstanding, it will not issue
any bonds or notes payable from the revenues of the Water System except in accordance with the
provisions of this Ordinance, provided, however, the City reserves the right to issue bonds or
notes which are junior in lien to the Series 2018 Bond, the Outstanding Bonds and any such
Additional Bonds with the principal and interest of such bonds or notes to be payable from
monies credited to the Retained Revenues Account as provided in Subsection 4(e). The term
"Additional Bonds" as used in this ordinance refers only to such bonds as are payable from the
revenues of the Water System on a parity with the Series 2018 Bond and the Outstanding Bonds,
all as outstanding from time to time, and are issued in accordance with the terms of said Sections
6 and 7.
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Section 9. So long as any of the Series 2018 Bond, the Outstanding Bonds or any
Additional Bonds are outstanding, the City hereby covenants and agrees as follows:
(a) The City will maintain the Water System in good condition and
will continuously operate the same in a reasonable and efficient manner, and the
City will punctually perform all the duties with reference to said system
required by the Constitution and statutes of the State of Nebraska, but this
covenant shall not prevent the City from discontinuing the use and operation of
all or any portion of the Water System so long as the revenues derived from the
City's ownership of the properties constituting the Water System shall be
sufficient to fulfill this City's obligations under Section 5 of this Ordinance.
(b) The City will not grant any franchise or right to any person, firm or
corporation to own or operate a water system in competition with that owned by
the City.
(c) The City will maintain insurance on the property constituting the
Water System (other than such portions of the system as are not normally
insured against loss by casualty) in the amounts and against the risks
customarily carried by similar utilities, but including fire and extended coverage
insurance in an amount which would enable the City to repair, restore or replace
the property damaged to the extent necessary to make the Water System
operable in an efficient and proper manner to carry out the City's obligations
under this Ordinance. The Mayor and Council shall annually, within one month
after the end of each fiscal year adopted by the City for the Water System
examine the amount of insurance carried with respect to the Water System and
shall evidence approval of such insurance by resolution. The proceeds of any
such insurance received by the City shall be used to repair, replace or restore the
property damaged or destroyed to the extent necessary to make the Water
System operable in an efficient and proper manner, and any amount of
insurance proceeds not so used shall be credited to the Retained Revenues
Account. In the event of any such insured casualty loss, the City may advance
funds to make temporary repairs or provide for an advance on costs of the
permanent repair, restoration or replacement from the Operation and
Maintenance Account and any such advances shall be repaid from insurance
proceeds received.
(d) The City will keep proper books, records and accounts separate
from all other records and accounts in which complete and correct entries will
be made of all transactions relating to the Water System. The City will have its
operating and financial statements relating to the Water System audited
annually by a certified public accountant or firm of certified public accountants.
The City will furnish to the original purchaser of the Series 2018 Bond and the
original purchasers of the Outstanding Bonds and to the original purchaser or
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purchasers of each series of Additional Bonds issued hereunder, within six
months after the end of each fiscal year of the Water System, a copy of the
financial statements of the Water System and the report thereon of the certified
public accountants.
(e) The City shall cause each person handling any of the monies in the
Blair Water System Fund to be bonded by an insurance company licensed to do
business in Nebraska in an amount or amounts deemed sufficient to cover at all
times the maximum amount of money belonging to the Water System in the
possession or control of any such person. The amount of such bond or bonds
shall be fixed by the Mayor and Council and the costs thereof shall be paid as an
operating and maintenance expense from the Operation and Maintenance
Account.
(f) So long as the City is current with all payments or credits required
to be made under Section 4 hereof and is also in compliance with the covenants
of Section 5 hereof, the City may pay for water service used by it at such rate or
rates as shall be determined by the Mayor and Council. In the event that the City
is not in compliance with the provisions of said Sections 4 and 5 hereof, the
City shall be required to pay for water service used by it at the rate or rates
applicable to such usage as fixed by the City's water rate ordinances then in
effect.
(g) The City agrees that so long as the Series 2018 Bond and/or the
Outstanding Bonds are outstanding and unpaid it will keep in force and effect
the Cargill Contract, during the stated term thereof, and will not amend the
provisions thereof in any manner which reduces amounts payable thereunder to
any level which would cause the City to be in violation of the provisions of
Section 5 of this Ordinance.
Section 9. The City's obligations under this Ordinance and the liens, pledges, covenants
and agreements of the City herein made or provided for, shall be fully discharged and satisfied as
to the Series 2018 Bond or any Additional Bonds issued pursuant to this ordinance and any such
bonds shall no longer be deemed outstanding hereunder if such bonds shall be been purchased
and canceled by the City, or when payment of the principal of and interest thereon to the
respective date of maturity or redemption (a) shall have been made or caused to be made in
accordance with the terms thereof, or (b) shall have been provided for by depositing with a
national or state bank having trust powers or trust company, in trust solely for such payment (1)
sufficient money to make such payment and/or (2) Deposit Securities in such amount and
bearing interest at such rates and payable at such time or times and maturing or redeemable at
17
stated fixed prices at the option of the holder as to principal at such time or times as will ensure
the availability of sufficient money to make such payment; provided, however, that with respect
to any bond to be paid prior to maturity, the City shall have duly given notice of redemption of
such bond as required by this Ordinance or given irrevocable instructions for the giving of such
notice. Any such money so deposited with such Paying Agent and Registrar or bank or trust
company in excess of the amount required to pay principal of and interest on the bonds for which
such monies were deposited, shall be paid over to the City as and when collected. For purposes
of this Section 9, any Deposit Securities shall be non -callable or callable only at the option of the
holder. With respect to any deposit made for purposes of satisfying the Series 2018 Bond under
this Section 9, there shall be Rirnished to NDEQ and the Nebraska Investment Finance Authority
("NIFA") an opinion of nationally recognized bond counsel that such deposit for payment of the
Series 2018 Bond will not adversely affect the exclusion for interest from gross income for federal
tax purposes on any bonds issued by NIFA to provide funds for deposit into the Nebraska Drinking
Water Facilities Loan Fund and the fiu-nishing of such opinion shall be a condition required to be
satisfied prior to the making of any such deposit in trust for payment and satisfaction with respect to
the Series 2018 Bond unless the Series 2018 Bond is to be prepaid and redeemed within 60 days
from the time of such deposit.
Section 10. The terms and provisions of this Ordinance do and shall constitute a
contract between the City of Blair and the holder of the Series 2018 Bond and no changes,
variations or alterations of any kind, except for changes necessary to cure any ambiguity, formal
defect or omission, shall be made to this Ordinance without the written consent of the holder of
the Series 2018 Bond. The holder of the Series 2018 Bond may, either in law or in equity, by
suit, action, mandamus or other proceeding, enforce or compel performance of any and all of the
acts and duties required by this Ordinance, and any court of competent jurisdiction may, after
default in payment of principal or interest or performance of any other obligations under this
Ordinance, on application of any such holder, appoint a receiver to take charge of the Water
System and operate the same and apply the earnings thereof to the payment of the principal of
and interest on bonds issued pursuant to this Ordinance in accordance with the provisions hereof,
the provisions of the Outstanding Parity Bond Ordinances and any ordinance authorizing
Additional Bonds.
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Section 11. The Mayor and City Clerk of the City are hereby authorized to do all
things and execute all such documents as may by them be deemed necessary and proper to
complete the issuance and sale of the Series 2018 Bond as contemplated by this Ordinance.
Section 12. If any section, paragraph, clause or provision of this Ordinance shall be held
invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the
other provisions of this Ordinance.
Section 13. The Mayor and Council hereby expressly declare the intent and understanding
that interest on the Series 2018 Bond shall not be excludable from gross income under the terms of
Section 103 of the Internal Revenue Code of 1986, as amended, and the City as issuer shall not file
any information report with respect to the issuance of the Series 2018 Bond pursuant to Section
149(e) of said Code.
Section 14. All ordinances, resolutions or orders or parts thereof in conflict with the
provisions of this Ordinance are to the extent of such conflict hereby repealed.
Section 15. This Ordinance shall be published in pamphlet form and take effect as
provided by law.
PASSED AND APPROVED this 27th day of March, 2018.
ATTEST:
Brenda Wheeler, City Clerk
(SEAL)
N
%Jat�Rea�lph, Mayor