2504ORDINANCE NO. 2504
AN ORDINANCE AUTHORIZING THE ISSUANCE OF A WATER SYSTEM REVENUE
BOND, SERIES 2023B, OF THE CITY OF BLAIR, NEBRASKA, IN THE PRINCIPAL
AMOUNT OF NOT TO EXEED TWO MILLION FIVE HUNDRED THOUSAND DOLLARS
($2,500,000), IN THE FORM OF A PROMISSORY NOTE ISSUED TO EVIDENCE
INDEBTEDNESS TO THE NEBRASKA DEPARTMENT OF ENVIRONMENT AND
ENERGY; 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 LOAN AGREEMENT TO THE NEBRASKA
DEPARTMENT OF ENVIRONMENT AND ENERGY; 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 Enviromllent and Energy (the "NDEE") has approved
a project of the City for its Water System consisting of the expansion of the water treatment plant,
including the construction of a new water main connecting the water treatment plant and the
Cargill campus, and such project has been designated as Project No. D311704 (the "Project") and
has agreed to lend from monies in NDEE's Drinking Water State Revolving Loan Fund or from
other sources in the total principal amount of not to exceed $2,500,000 (the "2023B NDEE 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 "NDEE
Note" and also sometimes referred to herein as the "Series 2023B Bond"), with such loan to be
governed as to terms and conditions by an agreement with NDEE entitled "Loan Agreement
(Governmental Borrower) Between Nebraska Department of Environment and Energy and the City
of Blair, Nebraska, NDEE Project No. D311704" (the "NDEE 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 2023A, to be issued pursuant
to an Ordinance (the "2023A Ordinance") in the original drawable principal
amount of $23,000,000, issued to evidence a loan from NDEE, of which the
remaining principal balance outstanding is $0.00 (the "Series 2023A Bond");
(ii) Water System Revenue Bond Anticipation Notes, Taxable Series
2023, dated May 4, 2023, issued pursuant to Ordinance No. 2498 (the "2023
Ordinance") of which $10,000,000 in principal amount are presently outstanding
(the "Series 2023 Notes");
(iii) Water System Revenue Bond, Series 2021, dated September 9,
2021, issued pursuant to Ordinance No. 2441 (the "2021 Ordinance") in the
original drawable principal amount of $10,000,000, issued to evidence a loan
from NDEE, of which the remaining principal balance outstanding is
$8,882,078.69 (the "Series 2021 Bond");
(iv) Water System Revenue Bond, Series 2019, dated July 22, 2019,
issued pursuant to Ordinance No. 2380 in the original drawable principal amount
of $1,700,000 (the "2019 Ordinance"), issued to evidence a loan from NDEE, of
which the remaining principal balance outstanding is $1,333,368.17 (the "Series
2019 Bond");
(v) Water System Revenue Bonds (Tax Exempt — AMT), Series 2017,
date of original issue March 28, 2017, issued pursuant to Ordinance No. 2305 (the
"2016 Ordinance) of which $3,210,000 in principal amount are presently
outstanding (the "Series 2017 Bonds");
(vi) Water System Revenue Bonds (Tax Exempt — AMT), Series 2016,
date of original issue August 24, 2016, issued pursuant to the 2016 Ordinance of
which $3,335,000 in principal amount are presently outstanding (the "Series 2016
Bonds");
(vii) Water System Revenue Bonds, Series 2012, date of original issue
June 5, 2012, issued pursuant to Ordinance No. 2217 (the "2012 Ordinance") of
which $3,740,000 in principal amount are presently outstanding (the "Series 2012
Bonds");
(viii) Water System Revenue Bond, Series 2010, date of original issue
August 12, 2010, issued pursuant to Ordinance No. 2187 (the "2010 Ordinance")
in the original drawable principal amount of $2,341,400, issued to evidence a loan
4
from NDEE, of which the remaining principal balance outstanding is $2,127,767
(the "Series 2010 Bond"); and
(ix) Water System Revenue Bonds, Series 2010B, date of original issue
September 28, 2010, issued pursuant to Ordinance No. 2191 (the "2010B
Ordinance") of which $4,355,000 in principal amount are presently outstanding
(the "Series 2010B Bonds").
The Outstanding Parity Bonds constitute the only presently outstanding indebtedness of the City
payable from the revenues of the Water System and for which the revenues of the Water System
have been pledged under the terms of the 2010 Ordinance, the 2010B Ordinance, the 2012
Ordinance, the 2016 Ordinance , the 2019 Ordinance, the 2021 Ordinance, the 2023 Ordinance,
and the 2023A Ordinance (collectively the "Outstanding Parity Bonds Ordinances").
(e) 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
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, 2022 were
not less than $3,600,000.
ii. The "Average Annual Debt Service Requirements" of the Outstanding Bonds
and the proposed Series 2023B Bond (as defined below) are not more than
$2,300,000.
iii. Said "Net Revenues" exceed 1.30 times said "Average Animal Debt Service
Requirements" of the Outstanding Bonds and of the proposed Series 2023B
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 2023B Bond.
5
V. All applicable conditions required the Outstanding Parity Bonds Ordinances
precedent to the issuance of the Series 2023B Bond as an "Additional Bond"
under the terms of said ordinances do exist and have happened.
(f) in connection with the NDEE Loan, as evidenced by the Series 2023B Bond, it is
necessary and advisable for the City to approve the execution and delivery of the NDEE Contract
and the NDEE Note in substantially the forms attached hereto;
(g) all conditions, acts and things required by law to exist or to be done precedent to the
issuance of the Series 2023B 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.
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:
"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 2023B 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
2023B 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. hz 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
6
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 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 2023B Bond, in the form of and evidenced by a single promissory
note (sometimes referred to in this Ordinance, according to the context, as the "NDEE Note" and
sometimes as the "Series 2023B Bond") in the principal amount of not to exceed Two Million Five
Hundred Thousand Dollars ($2,500,000), with such NDEE 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 frilly set forth. hl coiulection with the issuance of the
NDEE Note, the City shall also enter into the NDEE 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 NDEE Note and the NDEE Contract are hereby approved
and the Mayor and the City Clerk are hereby authorized to execute and deliver the NDEE Note and
the NDEE 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.
7
Section 4. The revenues and earnings of the Water System are hereby pledged and
hypothecated for the payment of the Series 2023B Bond, the Outstanding Bonds and any
Additional Bonds and interest on such Series 2023B Bond, the Outstanding Bonds and any such
Additional Bonds, and the City does hereby agree with the holders of said Series 2023B 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, cormnencing with the first day of the month
following the month in which the Series 2023B 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 15 or December 15 (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 NDEE
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 NDEE 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 NDEE 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 NDEE pursuant to the NDEE Contract and the NDEE
Note;
(2) during the period from and 'including that June 15 or
December 15 (as the case may be with respect to the earliest
occurring of such dates) which immediately follows the Initiation of
Operation until the NDEE Note has been paid in full an amount
LV
equal to one-sixth of the installment amount (principal and interest)
due on the next installment payment date for the NDEE 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 2023B 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 2023B
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 NDEE Loan or due under the NDEE 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 2023B 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 NDEE Contract, it is hereby determined that no sub -account
C
shall be established for the Series 2023B Bond. For the Series 2010B 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 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 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 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 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 2023B 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.
10
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 fiends, 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.
11
The pledge of the revenues and earnings of the Water System provided for in this
Ordinance for the Series 2023B 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 2023B 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 2023B 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 2023B 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 2023B Bond as described in the NDEE Contract.
(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
2023B Bond, the Outstanding Bonds and any Additional Bonds issued pursuant
to this Ordinance.
12
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 2023B 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 2023B 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 2023B 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
of such Additional Bonds will be at least equal to 1.35 times
the Average Annual Debt Service Requirements of the
Series 2023B Bond, the Outstanding Bonds and any
Additional Bonds, all as then outstanding, and of the
proposed Additional Bonds. In malting 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 begimzing of
13
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
Fund, which fund may be appropriately redesignated, and to provide that all of the Series 2023B
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
14
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 2023B Bond, the Outstanding Bonds or
Additional Bonds without compliance with the provisions of subsection 6(b) above, provided
that, if any such Series 2023B 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 2023B Bond, the Outstanding Bonds or Additional Bonds
then outstanding, provided, that if any such Series 2023B 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 2023B 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 Amlual Debt Service Requirements to show compliance with said Net
15
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
2023B 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 2023B 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 2023B 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 2023B 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 mamler, 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 2023B 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.
17
(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 2023B 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 filly discharged and satisfied as
to the Series 2023B 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 tildes 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
18
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 2023B Bond under
this Section 9, there shall be furnished to NDEE and the Nebraska Investment Finance Authority
("NIFA") an opinion of nationally recognized bond counsel that such deposit for payment of the
Series 2023B 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 makftag of any such deposit in trust for payment and satisfaction with respect to
the Series 2023B Bond Lidless the Series 2023B Bond is to be prepaid and redeemed within 60 days
from the time of such deposit.
Section 10. The terns and provisions of this Ordinance do and shall constitute a
contract between the City of Blair and the holder of the Series 2023B 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 2023B Bond. The holder of the Series 2023B 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.
19
Section 11. The Mayor and City Cleric 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 2023B 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 2023B Bond shall not be excludable from gross income under the terms of
Section 103 of the Intergyral 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 2023B 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 25th day of April, 2023.
ATTEST:
t/6 'L--,
elinda �K.Ru or
Brenda Wheeler, City Cleric
OF aC'q"�
Mo`�rti a "or `adjourmnent was duly made, seconded and on roll call vote was declared duly adopted
by the Mayor.
20
NDEE Note
[see attached]
21
Exhibit "B"
NDEE Contract
[see attached]
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 16t" Street, Blair, Nebraska in said City on the 25th
day of April, 2023, at 7:00 o'clock p.m. Present were: Mayor: Melinda Rump; Council Members:
Kirk Highfill, Katie Ferrari, Kevin Willis, Jim Sandvold, Frank Wolff, Andrew Schank, and Holly
Hafer, Absent: Rick Paulsen.
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 fulancing to be provided for the City by the
Nebraska Department of Enviromnent and Energy for the City's water system. Councilmember
Schank then introduced Ordinance No. 2504 entitled:
AN ORDINANCE AUTHORIZING THE ISSUANCE OF A WATER SYSTEM REVENUE
BOND, SERIES 2023B, OF THE CITY OF BLAIR, NEBRASKA, IN THE PRINCIPAL
AMOUNT OF NOT TO EXEED TWO MILLION FIVE HUNDRED THOUSAND DOLLARS
($2,500,000), IN THE FORM OF A PROMISSORY NOTE ISSUED TO EVIDENCE
INDEBTEDNESS TO THE NEBRASKA DEPARTMENT OF ENVIRONMENT AND
ENERGY; 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 LOAN AGREEMENT TO THE NEBRASKA
DEPARTMENT OF ENVIRONMENT AND ENERGY; 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 Schank moved that the statutory rule requiring reading on three different days
be suspended. Council Member Hafer seconded the motion to suspend the rules and upon roll call
vote on the motion the following Council Members voted YEA: Kirk Highfill, Katie Ferrari, Kevin
Willis, Jim Sandvold, Frank Wolff, Andrew Schank, and Holly Hafer. 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 Schank moved for
final passage of the ordinance, which motion was seconded by Council Member Hafer. The Mayor
then stated the question was "Shall Ordinance No. 2504 be passed and adopted?" Upon roll call
vote, the following Council Members voted YEA: Kirk Highfill, Katie Ferrari, Kevin Willis, Jim
Sandvold, Frank Wolff, Andrew Schank, and Holly Hafer. 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 tike, correct and complete copy of said ordinance is as follows:
2
State of Nebraska, County of Washington
Chris Rhoades, Being by me first duly sworn,
deposes and says that he is the Associate
Publisher of the Pilot -Tribune , a legal weekly
newspaper printed and published at Blair, in
Washington County, Nebraska and of general
circulation in said County and State: that said
newspaper has a bona fide circulation of more
than 3000 copies weekly, in said County: and
has been published in said County for more
than 52 successive weeks prior to the first
publication of the attached notice, that the
attached notice was published in said
newspaper for 1 consecutive week(s) being
the issues of.
5/2/2023
Date(s)
Chris' hoades, Associate Publisher
Subscribed in my presence, and sworn to
before me this date:
May 2, 2023
L_
Notary
4 G=-StatebraskaMAN2025
Cost information
Printers Fee $ 32.85
Aff & billing prep fee
Notary Fee
Copy Fee
Additional Affidavits
25% mins discount
Total Amount Due $ 32.85
Affidavit of Publication: