2380ORDINANCE NO. 2380
COUNCIL MEMBER WOLFF INTRODUCED THE FOLLOWING ORDINANCE:
AN ORDINANCE AUTHORIZING THE ISSUANCE OF A WATER SYSTEM REVENUE
BOND, SERIES 2019, OF THE CITY OF BLAIR, NEBRASKA, IN THE PRINCIPAL AMOUNT
OF NOT TO EXEED ONE MILLION SEVEN HUNDRED THOUSAND DOLLARS ($1,700,000),
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
AMENDMENT TO 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 AMENDMENT TO 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 Proj ect No. D311619 (the "Project") and has agreed to lend from
monies in NDEQ's Drinlung Water Facilities Loan Fund or from other sources in the total principal
amount of not to exceed $1,700,000 (the "2019 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 2019 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") for which the agreement entitled "Amendment No. 1 to Loan Agreement
(Governmental Borrower) between Nebraska Department of Environmental Quality and City of
Blair, Nebraska, Project No. D311619" is now required to expand the scope of the financing for
the Project (the "2019 NDEQ Amendment");
(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"):
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 NDEQ;
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, 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 $6,860,000; and
iv. 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;
V. 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; and
vi. Water System Revenue Bond, Series 2018, dated May 10, 2018, issued
pursuant to Ordinance No. 2351 of the City (the "2018 Ordinance"), in the
maximum original drawable principal amount of $1,400,000 (the "2018
Bond"), issued to evidence a loan from the NDEQ.
The 2010 Ordinance, the 2010 BC Ordinance, the 2012 Ordinance, the 2016 Ordinance and the
2018 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
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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
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, 2018 were not less
than $3,607,081.
ii. The "Average Annual Debt Service Requirements" of the Outstanding Bonds
and the proposed Series 2019 Bond (as defined below) are not more than
$1,101,282.
iii. Said "Net Revenues" exceed 1.30 times said "Average Annual Debt Service
Requirements" of the Outstanding Bonds and of the proposed Series 2019
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 2019 Bond.
V. All applicable conditions required the Outstanding Parity Bonds Ordinances
precedent to the issuance of the Series 2019 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 2019 Bond, it is
necessary and advisable for the City to approve the execution and delivery of the 2019 NDEQ
Amendment 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 2019 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, as required by law. Following the
issuance of the Series 2019 Bond, the 2018 Bond shall no longer be outstanding.
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 2019 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
2019 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 requirements for issuance of
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Additional Bonds and (ii) as of such time, the Series 2010B 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 2019 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 2019 Bond") in the principal amount of not to exceed One Million Seven
Hundred Thousand Dollars ($1,700,000), 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 2019 NDEQ Amendment 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 2019 NDEQ Amendment are hereby approved and
the Mayor and the City Clerk are hereby authorized to execute and deliver the NDEQ Note and the
2019 NDEQ Amendment 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. The 2018 Bond and the principal borrowing evidenced or to be
evidenced by the 2018 Bond is to be incorporated into the Series 2019 Bond from and after the
issuance of the Series 2019 Bond and from and after the issuance of the Series 2019 Bond shall no
longer be outstanding separate and independently from the Series 2019 Bond. The terms and
conditions of the NDEQ Contract are amended by the 2019 NDEQ Amendment and the NDEQ
Contract as amended by the 2019 NDEQ Amendment shall remain in full force and effect from
and after the delivery of the Series 2019 Bond and the 2019 NDEQ Amendment as provided for
in this Ordinance.
Section 4. The revenues and earnings of the Water System are hereby pledged and
hypothecated for the payment of the Series 2019 Bond, the Outstanding Bonds and any Additional
Bonds and interest on such Series 2019 Bond, the Outstanding Bonds and any such Additional
Bonds, and the City does hereby agree with the holders of said Series 2019 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
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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
following the month in which the Series 2019 Bond is issued (the "Initial Deposit
Date") to the Bond Payment Account, the following amounts:
(1) during the period from the date of issuance 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 as
amended by the 2019 NDEQ Amendment; 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 as amended by the 2019 NDEQ Amendment 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
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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 2019 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 2019
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 as amended by the 2019 NDEQ Amendment.
(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 2019 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 as amended by the 2019 NDEQ Amendment,
it is hereby determined that no sub -account shall be established for the Series
2019 Bond. For the Series 201013 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 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 -
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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 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 2019 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 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 earrings of the Water System provided for in this
Ordinance for the Series 2019 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 2019 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 2019 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:
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(a) To provide funds to pay, when due, the principal of and interest on
the Series 2019 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 2019 Bond as described in the NDEQ Contract as amended by the 2019
NDEQ Amendment.
(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 2019 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 2019 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 2019 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
2019 Bond, the Outstanding Bonds and any Additional
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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 of such
Additional Bonds will be at least equal to 1.35 times the
Average Annual Debt Service Requirements of the Series
2019 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
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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 Fund,
which fund may be appropriately redesignated, and to provide that all of the Series 2019 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 2019 Bond, the Outstanding Bonds or
Additional Bonds without compliance with the provisions of subsection 6(b) above, provided that,
if any such Series 2019 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 2019 Bond, the Outstanding Bonds or Additional Bonds then
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outstanding, provided, that if any such Series 2019 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 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 2019 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 2019
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 2019 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
13
ordinance refers only to such bonds as are payable from the revenues of the Water System on a
parity with the Series 2019 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.
Section 9. So long as any of the Series 2019 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
14
and financial statements relating to the Water System audited annually by a
certified public accountant or film of certified public accountants. The City will
furnish to the original purchaser of the Series 2019 Bond and the original
purchasers of the Outstanding Bonds and to the original purchaser or 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 2019 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 2019 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
15
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 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 2019 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 2019 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 2019 Bond unless the
Series 2019 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 2019 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
2019 Bond. The holder of the Series 2019 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.
LC
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 2019 Bond as contemplated by this Ordinance.
Section 12. The terms and provisions of the NDEQ Contract as amended by the 2019
NDEQ Amendment are hereby confirmed and as so amended shall remain in force and effect.
Section 13. 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 14. The Mayor and Council hereby expressly declare the intent and understanding
that interest on the Series 2019 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 2019 Bond pursuant to Section 149(e)
of said Code.
Section 15. 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.
by law.
Section 16. This Ordinance shall be published in pamphlet form and take effect as provided
Passed and approved this 25th day of June, 2019
ATTEST:
r�
A
BRENDA WHEELER, CITY CLERK
(SEAL)
17
CITY OF BLAIR, NEBRASKA
d �
RICHARD HANSEN, MAYOR
STATE OF NEBRASKA )
) :ss:
COUNTY OF WASHINGTON )
BRENDA R. WHEELER, hereby certifies that she is the duly appointed, qualified, and acting City
Clerk of the City of Blair, Nebraska, and that the above and foregoing Ordinance was duly passed
and approved at a regular meeting of the Mayor and City Council of said City held on the 25th day
of June, 2019.
BRENDA WHEELER, CITY CLERK
18
FMIFIR.MWtel
NDEQ Note
Exhibit "B"
2019 NDEQ Amendment
AMENDMENT NO. 1
To
LOAN AGREEMENT
(Governmental Borrower)
Between the
NEBRASKA DEPARTMENT OF ENVIRONMENTAL AND ENERGY
�I
CITY OF BLAIR, NEBRASKA
NDEE PROJECT NO. D311619
DATED AS OF JULY 22, 2019
Amendment No. 1
AMENDMENT NO. 1
TO AGREEMENT FOR LOAN BETWEEN
NEBRASKA DEPARTMENT OF ENVIRONMENTAL QUALITY
AND
CITY OF BLAIR
Project No. D311619
This Amendment No. 1 to the Loan Agreement No. D311619, is entered into by and between the
State of Nebraska, acting by and through the Nebraska Department of Environmental Quality (hereinafter
"NDEQ") and the CITY OF BLAIR (hereinafter "Borrower").
1. The Loan Agreement (Project No. D311619) (hereinafter "Loan Agreement") between the
NDEQ and the Borrower dated May 10, 2018, and signed by Jim Macy, Director of the NDEQ, and Jim
Realph, Mayor of the City of Blair, is hereby acknowledged and incorporated by this reference as if fully
set out herein.
2. Pursuant to Section 6.04 of the Loan Agreement, the parties hereby amend the Loan
Agreement by modifying Section 2.01. The current language of the Amount of the Loan on page 6 as
follows:
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.
shall be replaced by:
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, seven hundred thousand dollars ($1,700,000) to the
Borrower to pay a portion of the Project Costs. This Loan also includes DWSRF Loan
Forgiveness of up to two hundred fifty-five thousand dollars ($255,000). 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
2
Amendment No. 1
NDEQ's subsequent written approval of such request in its sole discretion upon such additional
terms, conditions and covenants as NDEQ may then require.
3. In addition the current language of Attachment A to the Loan Contract between the NDEQ
and the Community of Blair PROJECT NO. D311619 LOAN AMORTIZATION SCHEDULE
(PROJECTED), shall be modified as follows and a revised schedule is attached:
"PROJECT TOTAL = 1,400,000.00"
"PRINCIPAL = 1,190,000.00"
"INTEREST RATE = 2.00"
"DWSRF PRINCIPAL FORGIVENESS = 210,000.00"
shall be replaced by:
"PROJECT TOTAL = 1,700,000.00"
"DWSRF PRINCIPAL = 1,445,000.00"
"INTEREST RATE = 2.00"
"DWSRF PRINCIPAL FORGIVENESS = 255,000.00"
4. In addition, the current language of ATTACHMENT B, Project Costs and Projected Outlay
Schedule, page 24 shall be modified as follows:
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
shall be replaced by:
ATTACHMENT B
PROJECT COSTS
Administrative and legal fees
$10,000
Land and right-of-way
5,000
A/E Fees
140,000
Inspection Fees
45,000
Construction and Equipment
1,375,000
Miscellaneous
25,000
Contingencies
100,000
TOTAL
$1,700,000
PROJECT FUNDING SOURCES
DWSRF Loan Amount $1,445,000
DWSRF 15% Loan Forgiveness Amount 255,000
Total DWSRF Funding $1,700,000
Amendment No. 1
5. Pursuant to Section 6.04 of the Loan Agreement, the parties hereby amend the following
attachments attached hereto: Attachment A, Loan Repayment Schedule; Attachment B, Project Costs and
Projected Outlay Schedule; Attachment C, Financial Capability Analysis; Attachment E, Municipality's
Counsel's Opinion; Attachment F, Promissory Note of the City of Blair, Nebraska, and Loan Forgiveness
Award and Conditions in accordance with the terms and conditions set forth in Amendment Number 1 to
the Loan Agreement.
6. Except as specifically modified herein, all terms and conditions of the original Loan
Agreement remain in full force and effect.
7. The amendment or modification made herein shall become effective on the latter of the
two dates signed. /�; A A
CITY OF BLAIR, NEBRASKA
BY:
TITLE: Mayor
DATE: &1/26 'J `1
NEBRASI
E
4
DATE: 22®( t
Amendment No. 1
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 December 15, 2019. 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 the 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 the 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 20 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).
Amendment No. 1
ATTACHMENT B
PROJECT COSTS
Administrative and legal fees
$10,000
Land and right-of-way
5,000
A/E Fees
140,000
Inspection Fees
45,000
Construction and Equipment
1,375,000
Miscellaneous
25,000
Contingencies
100,000
TOTAL
$1,700,000
PROJECT FUNDING SOURCES
DWSRF Loan Amount $1,445,000
DWSRF 15% Loan Forgiveness Amount 255,000
Total DWSRF Funding $1,700,000
PROJECTED DWSRF OUTLAY SCHEDULE
May 2018
$50,000
July 2018
200,000
August 2018
200,000
September 2018
200,000
November 2018
100,000
July 2019
200,000
August 2019
200,000
September 2019
200,000
November 2019
200,000
December 2019
50,000
February 2020
50,000
April 2020
50,000
TOTAL
$1,700,000
6
Amendment No. 1
ATTACHMENT C
FINANCIAL CAPABILITY
BLAIR, NEBRASKA
DWSRF Project No. D311619
Blair has requested DWSRF funding assistance of $1,700,000 to finance a replacement booster
station, and to replace approximately 3,000 feet of water main in their distribution system. This
amendment will also provide funding for design of control of the lime solids discharge from the
water treatment plant. The project will include engineering and inspection fees.
An abbreviated financial analysis is presented. The documents reviewed and used to complete this
analysis are:
1. Audited Financial Statements Excerpts of the City of Blair, for the years 2016 through 2018,
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
de reciation
Revenue Minus
Expenses
2016 $7,556,827
$3,671,480
$3,885,347
2017 $7,703,336
$3,926,621
$3,776,715
2018 $7,692,591
$4,119,215
$3,573,376
Blair as reported on the State of Nebraska's Public Auditor's website for year ending September 30,
2018 has $31,121,878 outstanding principal debt, $9,355,239 outstanding interest debt for a total
outstanding debt of $40,477,117. Long -Term Liabilities for Governmental and Business Activities are
listed below taken from Blair's Audited Financial Statements ending September 30, 2018.
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 $430,000 as of September 30, 2018.
2. Public Safety Bonds issued by the City in February, 2008 (interest varies from 3.30% to
4.25%) has a remaining balance of $280,000 as of September 30, 2018.
3. General Obligation bond issued by the City in July, 2015 (interest varies from 1.5% to
2.65%), has a balance of $835,000 as of September 30, 2018.
4. Public Safety Tax Anticipation Bonds dated December, 2015 (interest varies from 0.65% to
2.60%), has a balance of $100,000 as of September 30, 2018.
5. General Obligation bond dated May, 2017 (interest varies from 1.30% to 3.75%), has a
balance of $2,595,000 as of September 30, 2018.
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 $2,477,953 as of September 30, 2018.
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, 2018.
Amendment No. 1
3. Water Revenue Bonds, Series 2012A, issued by the City in June, 2012 (interest varies from
2.80% to 2.50%) has a remaining balance of $6,860,000 as of September 30, 2018.
4. Water Revenue Bonds, Series 2016, issued by the City in August, 2016 (interest varies from
1.60% to 4.00%) has a remaining balance of $5,195,000 as of September 30, 2018.
5. 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, 2018.
Business activities long-term debt — Sewer:
1. Sewer Revenue Bonds, Series 2004, issued by the City in December, 2004 (interest varies
from 4.2% to 4.25%) has a remaining balance of $70,000 as of September 30, 2018.
2. Sewer Revenue Bonds, Series 2011, issued by the City in February, 2011 (interest of
2.10%) has a remaining balance of $683,925 as of September 30, 2018.
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 $1,635,000 as of September 30, 2018.
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
2019
$2,150,594
$1,053,253
$3,203,847
2020
2,528,148
1,000,068
3,528,216
2021
2,140,757
927,608
3,068,365
2022
2,613,425
865,004
3,478,429
2023
2,156,152
783,065
2,939,217
2024-2028
8,498,819
2,946,947
11,445,766
2029-2033
7,609,422
1,427,194
9,036,616
2034-2038
2,812,374
313,584
3,125,958
2039-2043
612J87
38,516
650,703
Total
$31,121,878
$9,355,239
$40,477,117
Analysis of the Water Utility:
The City of Blair manages their water utility. The water utility ran operating surpluses for the years
2016 through 2018. 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 increase to fund this project with 10% coverage on DWSRF debt service would equal $1.83 per
month debt service per user. These estimates would make for a projected monthly water rate of $21.22
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 $1,700,000 minus
$255,000 loan forgiveness for a principal amount of $1,455,000 would have an annual debt service of
$71,467 plus the DWSRF contract required 10% coverage or $7,147 for delinquency or loss of users as
shown in Table 3 totals $78,614 for the first year debt service including coverage.
Table 3
Amendment No. 1
Proposed DWSRF Loan Amendment #D311619 to $1,700,000 less $255,000 or $1,445,000 Principal
DWSRF Base
Interest Rate
First Year Payment
First Year Payment +
Program Loan Term
10% Coverage
ears
30
2.0% + 0.5% admin
$71,467
$78,614
fee on outstanding
rinci al balance
The proposed 30 year DWSRF loan of $1,455,000 annual principal and interest would be $64,286.
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 $21.22 or $254.64 annually. This projected household water rate total is 0.53% of Blair's 2016
median household income of $47,980 and is below EPA's 2.5% upper level of water rate affordability.
Amendment No. 1
ATTACHMENT E
FORM OF BORROWER'S COUNSEL OPINION
[USE BORROWER COUNSEL'S LETTERHEAD]
[Date]
[NOTE: Any of the opinions given below may be given in reliance upon the opinion of another
Bond Counsel, and one Bond Counsel may give some of the opinions and another Bond Counsel
may give others.]
Nebraska Department of Environmental Quality
Suite 400
1200 N Street, The Atrium
Post Office Box 98922
Lincoln, NE 68509-8922
Attention: Water Quality Division
Ladies and Gentlemen:
[I[We] have acted as [Bond] Counsel in connection with the execution and delivery by [NAME OF
MUNICIPALITY], a [TYPE OF ENTITY] (the "Municipality"), of a Loan Agreement dated as of May 10,
2018, as amended by Amendment No. 1 of Loan No. D311619 (collectively the "Loan Agreement')
between the Borrower and the Nebraska Department of Environmental Quality ("NDEQ") and the issuance
of a promissory note dated the date hereof (the "Note") by the Borrower to the 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, [I/we] have examined the following:
(a) Certified copies of Ordinance No. 2380 pursuant to which Loan Agreement and Note
are to be entered into;
(b) An executed counterpart of the Loan Agreement (including as a part thereof said
Amendment No. 1);
(c) The executed Note; and
(d) Such other documents as [I/we] deemed relevant and necessary in rendering this
opinion.
As to questions of fact material to [my/our] opinion, [I/we] have relied upon the certified
proceedings and other certifications of public officials furnished to [me/us] without undertaking to verify
the same by independent investigation.
Based upon the foregoing [I am/we are] of the opinion that:
1. The Borrower is a City of Blair duly organized and validly existing under the laws of the
State of Nebraska.
2. The Borrower 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 Borrower 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 Contract (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 Borrower and are, and would be if the entire Loan Amount were advanced to the Borrower pursuant to
10
Amendment No. 1
the Loan Agreement on the date of this opinion, valid and legally binding special obligations of the
Borrower, 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, the Loan Agreement creates a
valid lien on the funds pledged by the Borrower 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 Borrower is secured by a superior
lien on such funds.
6. The Borrower has obtained or made all approvals, authorizations, consents or other
actions of, and filings, registrations or qualifications with, the Borrower or any other government authority
which are legally required to allow the Borrower 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.
Very truly yours,
11
Amendment No. 1
ATTACHMENT F r�-/,
4
(D P,
PROMISSORY NOTE OF CITY OF BLAIR, NEBRASI� V
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 $1,700,000 (less $255,000) to the extent
disbursed pursuant to Section 2.01 and Section 2.04 of the Loan Agreement dated as of May 10, 2018,
as amended by Amendment No. 1 (together, "the Loan Agreement") with interest on each such
amount until paid, as provided in Section 2.03 of the Loan Agreement between the 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 principal sum of
$1,700,000 of this Note is renewal of the Note dated May 10, 2018. 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 the NDEQ in Lincoln,
Nebraska, and upon the assignment of this Note to the NIFA, at the principal corporate trust office
of a Trustee designated by the NIFA, or such other place as the NDEQ may designate in writing.
This Note is issued pursuant to and is secured by the Loan Agreement, and Amendment No. 1
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 Existing Revenue Obligations (as defined in
the Loan Agreement) and other revenue bonds now or thereafter outstanding under the terms of said
Ordinance and 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, the 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.
12
Amendment No. 1
This Note and all instruments securing the same are to be construed according to the laws of the
State of Nebraska. Signed and sealed this -- day of ::W ne_ J2019.
[SEAL]
Attest`
Cle
CITY OF BLAIR, NEBRASKA
Title Mayor
NEBR vKA,DEPART T OF
ENVIRONMENTAL Q'U ITY
M
Title / / Director
Date 101
Complete this section upon assignment of this Note to the NIFA.
Pursuant to the Pledge Agreement dated as of as amended (the "Pledge
Agreement"), by and between the NDEQ and the Nebraska Investment Finance Authority ("NIFA"), and
the dated as of , as supplemented and amended, by and between
the NIFA , as trustee, the NDEQ hereby assigns, grants and conveys
any and all of the NDEQ's rights, title and interest in this Note to the NIFA, except as provided in the
Pledge Agreement, and the NIFA hereby assigns such rights, title and interest to the Trustee and any
successor Trustee.
Attest:
NEBRASKA INVESTMENT FINANCE AUTHORITY
E
Title
Date
13
Amendment No. 1
LOAN FORGIVENESS AWARD AND CONDITIONS
FROM THE NEBRASKA DEPARTMENT OF ENVIRONMENTAL QUALITY
TO THE CITY OF BLAIR, NEBRASKA
NDEQ PROJECT NUMBER D311619 AMENDMENT NO. 1
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 fifty-five thousand dollars ($255,000.00) 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 2019 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 $255,000.00 of the eligible
DWSRF project loan amount of $1,700,000.00. The percentage is set in accordance with Appendix F of
the SRF SFY 2019 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 may be
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.
14
Amendment No. 1
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 2019 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.
B LAIR,
NEBRA
ByZ� Z
Title !Mayor
Date
DOCS/2294969.2
NEBR$S" DEP/ 2 MENT OF
ENVI ONMENTUALITY
By
Title
Date ' 1 ` �1a `
15