2186ORDINANCE NO. 2186
AN ORDINANCE AUTHORIZING THE ISSUANCE OF A WATER SYSTEM REVENUE
BOND, SERIES 2010, OF THE CITY OF BLAIR, NEBRASKA, IN THE PRINCIPAL
AMOUNT OF TWO MILLION THREE HUNDRED FORTY -ONE THOUSAND FOUR
HUNDRED DOLLARS ($2,341,400), IN THE FORM OF A PROMISSORY NOTE ISSUED TO
EVIDENCE INDEBTEDNESS TO THE NEBRASKA DEPARTMENT OF ENVIRONMENTAL
QUALITY; APPROVING THE FORM OF SAID BOND (ISSUED AS A SINGLE
PROMISSORY NOTE) AND RELATED LOAN AGREEMENT; PLEDGING AND
HYPOTHECATING THE REVENUES AND EARNINGS OF THE WATERWORKS PLANT
AND WATER SYSTEM OWNED OR TO BE OWNED BY THE CITY FOR THE PAYMENT
OF SAID BOND; PROVIDING FOR THE ISSUANCE AND SALE OF SAID BOND;
AUTHORIZING THE DELIVERY OF SAID BOND AND RELATED LOAN AGREEMENT TO
THE NEBRASKA DEPARTMENT OF ENVIRONMENTAL QUALITY; PROVIDING FOR
THE COLLECTION, SEGREGATION AND APPLICATION OF THE REVENUES OF SAID
WATERWORKS PLANT AND SYSTEM; DETERMINING THAT INTEREST ON SAID
BOND SHALL NOT BE EXCLUDABLE FROM GROSS INCOME FOR PURPOSES OF
FEDERAL INCOME TAXATION; PROVIDING FOR THE DISPOSITION OF THE
PROCEEDS OF SAID BOND AND ORDERING THE ORDINANCE PUBLISHED IN
PAMPHLET FORM.
BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF BLAIR,
NEBRASKA, AS FOLLOWS:
Section 1. The Mayor and Council of the City of Blair, Nebraska (the "City ") hereby find
and determine as follows:
(a) The City owns and operates a waterworks plant and system (which plant and
system, together with any additions, extensions and improvements thereto hereafter made are
hereinafter referred to as the "Water System ") which represents a revenue - producing undertaking
of the City.
(b) the Nebraska Department of Environmental Quality ("NDEQ ") has approved a
project of the City for its Water System consisting of construction and installation of replacement
water mains and related improvements, rehabilitations and repairs which has been designated as
DWSRF Project No. D311530 (the "Project ") and has agreed to lend from monies in NDEQ's
Drinking Water Facilities Loan Fund or from other sources in the total principal amount of
$2,341,400 (the "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
2010 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. D311530" (the "NDEQ
Contract '').
(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 Refunding Bonds, Series
2000, Date of Original Issue — September 22, 2000, issued
pursuant to Ordinance No. 1909 of the City (the "Series 2000
Ordinance "), in the original principal amount of $3,395,000 (the
"Series 2000 Bonds "), of which bonds in the principal amount of
$555,000 presently remain outstanding and unpaid;
(ii) Water System Revenue Bond, Series 2000B, dated
September 8, 2000, issued pursuant to Ordinance No. 1907 of the
City (the "Series 2000B Ordinance "), in the original principal
amount of $6,815,700 (the "Series 2000B Bond "), issued to
evidence a loan from the Nebraska Department of Environmental
Quality of which the remaining balance for principal is
$4,374,135.49 (as of June 15, 2015 and based upon the original
amortization schedule); and
(iii) Water System Revenue Bond, Series 2006, dated
May 26, 2006, issued pursuant to Ordinance No. 2065 of the City
(the "Series 2006 Ordinance "), in the original principal amount of
$2,700,000 (the "Series 2006 Bond "), issued to support payments
on bonded indebtedness incurred by the Papio- Missouri River
Natural Resources District, of which the remaining principal
balance outstanding is $1,500,000.
In addition to the Outstanding Bonds, the City has issued and outstanding, as indebtedness
constituting a junior lien pledge to the Outstanding Bonds, the following water revenue bond
anticipation note indebtedness (the "Outstanding Notes "):
(i) Water System Revenue Bond Anticipation Notes,
Series 2007A, dated May 3, 2007, issued pursuant to Ordinance
No. 2102 of the City, as amended by Ordinance No. 2109 of the
City, and a Designation of Series, Initial Interest Payment Date,
Date of Redemption, Final Interest Rate, Pricing and Maturity
Schedule dated April 16, 2007, (collectively, the "Series 2007A
Ordinance ") in the original amount of $6,500,000 (the "Series
2007A Notes "), issued to pay a portion of the cost of certain
enlargements, expansions and improvements to the existing
waterworks plant and system of the City, of which the remaining
principal balance outstanding is $6,500,000; and
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(ii) Water System Revenue Bond Anticipation Notes,
Series 2007B, dated August 15, 2007, issued pursuant to
Ordinance No. 2102 of the City, as amended by Ordinance No.
2109 of the City, and a Designation of Series, Initial Interest
Payment Date, Date of Redemption, Final Interest Rate, Pricing
and Maturity Schedule dated July 23, 2007, (collectively, the
"Series 2007B Ordinance ") in the original amount of $8,000,000
(the "Series 2007B Notes "), issued to pay a portion of the cost of
certain enlargements, expansions and improvements to the existing
waterworks plant and system of the City, of which the remaining
principal balance outstanding is $8,000,000.
The Outstanding Bonds and the Outstanding Notes 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.
(d) Section 13 of the Series 2000 Ordinance, Section 6 of the Series 2000B Ordinance
and Section 13 of the Series 2006 Ordinance permit the issuance of "Additional Bonds" which
are payable on a parity with the Outstanding Bonds and equally and ratably secured therewith
under the terms of the Series 2000 Ordinance, the Series 2000B Ordinance and the Series 2006
Ordinance provided that 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 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) this Ordinance provides 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
Series 2010 Bond (as the proposed Additional Bonds to be issued):
(ii) the "Net Revenues" (as defined in the Series 2000
Ordinance, the Series 2000B Ordinance and the Series 2006
Ordinance and in this Ordinance) of the Water System for the
fiscal year ended September 30, 2009 were not less than
$2,667,811; and
(iii) the "Average Annual Debt Service Requirements"
(as defined in the Series 2000 Ordinance, the Series 2000B
Ordinance and the Series 2006 Ordinance and in this Ordinance) of
the Outstanding Bonds and the Series 2010 Bond (as the proposed
Additional Bonds) to be issued are not more than $2,000,000;
k,
the Series 2007A Ordinance and the Series 2007B Ordinance both provide that the Outstanding
Notes are payable only and solely from the Retained Revenues Account (as defined and
described in the Series 2000 Ordinance, the Series 2000B Ordinance and the Series 2006
Ordinance and this Ordinance) and are subject to the prior payinelit of operation and
maintenance expenses and all payments with respect to the Outstanding Bonds and any
Additional Bonds which may from time to time be issued and outstanding (all as described in the
Series 2000 Ordinance, the Series 2000B Ordinance and the Series 2006 Ordinance); the Series
2007A Ordinance and the Series 2007B Ordinance further provide for a lied in favor of the
Outstanding Notes upon the revenue and earnings of the Water System which shall be in all
respects junior to the lien in favor of the Outstanding Bonds and any Additional Bonds from time
to time issued and outstanding;
(e) in connection with the NDEQ Loan, as evidenced by the Series 2010 Bond, it is
necessary and advisable for the City to approve the execution and delivery of the NDEQ Contract
and the NDEQ Note in substantially the forms attached hereto;
(f) all conditions, acts and things required by law to exist or to be done precedent to the
issuance of the Series 2010 Bond as and Additional Bond of equal lien and standing with the
Outstanding Bonds and as provided for in the Series 2000 Ordinance, the Series 2000B
Ordinance and the Series 2006 Ordinance do exist and have been done in regular and due form
and time as required by law.
Section 2. In addition to the definitions provided in parentheses elsewhere in this
Ordinance, the following definitions of terms shall apply, unless the context shall clearly indicate
otherwise:
"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 2010 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
2010 Bond, according to their terms and the terms of said Sections 6 and 7.
"Average Annual Debt Service Requirements" shall mean that number
computed by adding all of the principal and interest due when computed to the
absolute maturity of the bonds for which such computation is required and
dividing by the number of years remaining that the longest bond of any issue for
which such computation is required has to run to maturity. In malting such
computation, the principal of any bonds for which mandatory redemptions are
scheduled shall be treated as maturing in accordance with such schedule of
mandatory redemptions.
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"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 Additional Bonds, (ii) as of such time, the Series
2000 Bonds and the Series 2006 Bond shall no longer be outstanding and (iii) if
as of such time the Series 2000B Bond shall remain outstanding, NDEQ shall
consent to such determination of "Net Revenues" as provided in this sentence of
this definition.
Section 3. To provide for the payment of the costs of the Project, there shall be and there is
hereby ordered issued the Series 2010 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 2010 Bond ") in the principal amount of Two Million Three Hundred
Forty -one Thousand Four Hundred Dollars ($2,341,400), with such NDEQ Note to be substantially
in such form and to have such payment terms as are set forth in Exhibit A to this Ordinance, which
exhibit is by such reference incorporated herein as if fully set forth. In connection with the issuance
of the NDEQ Note, the City shall also enter into the NDEQ Contract in substantially the form set
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forth in Exhibit B to this Ordinance, which exhibit is by such reference incorporated herein as if
fully set forth. The terms and conditions of the NDEQ Note and the NDEQ Contract are hereby
approved and the Mayor and the City Clerk arc hereby authorized to execute and deliver the NDEQ
Note and the NDEQ Contract for and on behalf of the City in substantially the form presented but
with such changes from the forms presented and attached hereto as such officers shall deem
appropriate for and on behalf of the City.
Section 4. The revenues and earnings of the Water System are hereby pledged and
hypothecated for the payment of the Series 2010 Bond, the Outstanding Bonds and any
Additional Bonds and interest on such Series 2010 Bond, the Outstanding Bonds and any such
Additional Bonds, and the City does hereby agree with the holders of said Series 2010 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 Wales System Fund." For
purposes of allocating the monies in the Blair Water System Fund, the City shall
maintain the following accounts: (1) Boni 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, starting with the month of August, 2010, the
following amounts:
(1) during the period from August 1, 2010, until and including
that June 30 or December 31 (as the case may be with respect to the
earliest occurring of such dates) which imm ediately follows the
"Initiation of Operation" (as defined in the NDEQ Contract; in this
Ordinance hereafter referred to as the "Initiation of Operation ") of
the Project an amount such that if the same amount were credited on
the first day of each calendar month from such date of credit until the
next payment date upon which any amount falls due on the NDEQ
Note, whether for principal or interest, the amount accumulated by
such monthly credits would equal the amount falling due on such
payment date on the NDEQ Note, provided, however, that such
credits shall be required only as and to the extent that such payments
are not provided from other sources including amounts advanced by
NDEQ pursuant to the NDEQ Contract and the NDEQ Note;
E'1
(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 are as required under the terms of the Series 2000
Ordinance, the Series 2000B Ordinance and the Series 2006
Ordinance 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 2010 Bond, the Outstanding Bonds or any Additional Bonds and to
transfer the appropriate amounts due to the paying agent and registrar for the
Series 2000 Bonds and the direct payee for the Series 2000B Bond, the Series
2006 Bond and the Series 2010 Bond and the respective paying agents or direct
payees (as may be applicable) for any issues of Additional Bonds, on or before
each principal and interest payment date. Upon the issuance of any Additional
Bonds pursuant to this Ordinance, appropriate additional credits to the Bond
Payment Account shall be provided for sufficient to pay principal and interest
on said Additional Bonds.
(c) OPERATION AND MAINTENANCE ACCOUNT - After any
credits required to be made by the foregoing subparagraph (b) have been made
in full, out of the Blair Water System Fund there shall be monthly credited into
the Operation and Maintenance Account such amounts as the City shall from
time to time determine to be necessary to pay the reasonable and necessary
expenses of operating and maintaining the Water System, and the City may
withdraw funds credited to the Operation and Maintenance Account as
necessary from time to time to pay such expenses. As an operational expense
the City shall pay any and all administrative fees required to be paid in
connection with the NDEQ Loan or due under the NDEQ Contract.
(d) - DEBT SERVICE RESERVE ACCOUNT - Within the Debt
Service Reserve Account there shall be established separate sub - accounts for
each series of bonds payable on a parity with the Series 2010 Bond and the
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Outstanding Bonds from the revenues of the Water System, as shall be deemed
appropriate by the Mayor and Council in connection with each such issue. In
view of the provisions of the NDEQ Contract, it is hereby determined that no
sub - account shall be established for the Series 2010 Bond. For the Series 2000
Bonds there has previously been established a separate sub - account in
accordance with the terms of the Series 2000 Ordinance into which there has
been deposited and shall be maintained an amount set under the terms of the
Series 2000 Ordinance, which shall be maintained as the required balance so
long as any of the Series 2000 Bonds remain outstanding in accordance with the
terms of the Series 2000 Ordinance. Under the terms of the Series 2000E
Ordinance and the Series 2006 Ordinance no separate sub - account has been
required for the Series 2000B Bond or the Series 2006 Bond, respectively. In
issuing any series of Additional Bonds a separate sub - account in the Debt
Service Reserve Account may be established for such series of Additional
Bonds but is not required under the terms of this Ordinance. The balance in any
such additional sub - account 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 2010 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
(including the Outstanding Notes) or to provide for any other lawful purpose of
the City as directed by the Mayor and City Council.
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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. 2007.
Investments made from or attributable, in whole or in part, to the Debt Service Reserve Account
shall mature or be redeemable at the option of the holder, without penalty, in not more than ten
years. Investments made from or attributable to the Bond Payment Account shall mature or be
redeemable at the option of the holder by no later than the time monies are required for payments
due from such account. Income from or profit realized from investment for any Account or sub -
account shall be credited to such Account or sub - account until such Account or sub - account
contains any amount then required to be therein, and thereafter such income or profit shall be
transferred to the Blair Water System Fund and treated as other revenues from the operation of
the Water System.
The pledge of the revenues and earnings of the Water System provided for in this
Ordinance for the Series 2010 Bond, the Outstanding Bonds and any Additional Bonds, subject
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to the right of the City to issue Additional Bonds as provided in this Ordinance, the Series 2000
Ordinance, the Series 2000B Ordinance and the Series 2006 Ordinance, 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 2010 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. 2007, as amended, with respect to its
Water System.
Section 5. So long as any of the Series 2010 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 2010 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, enla.xgements, extensions and improvements to the Water System,
including payment as the same fall due of any administrative fees related to the
Series 2010 Bond and the Series 2000B Bond as described in the NDEQ
Contract and the contract with NDEQ for the Series 2000B Bond.
(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 2010
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 Additional Bonds issued for refunding purposes which
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are 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 2010 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 2010 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 2010 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 2010 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
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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. 2007, 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 2010
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
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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 2010 Bond, the Outstanding Bonds or
Additional Bonds without compliance with the provisions of subsection 6(b) above, provided
that, if any such Series 2010 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 2010 Bond, the
Outstanding Bonds or Additional Bonds then outstanding, provided, that if any such Series 2010
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 2010 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
15
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 refiinded pursuant to Section 10 -126 R.R.S. Neb. 2007 (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
2010 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 2010 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 2010 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 2010 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.
16
(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 2010 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 four
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.
17
(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 2010 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 2010 Bond or any Additional Bonds issued pursuant to this ordinance and any such
bonds shall no longer be deemed outstanding hereunder if such bonds shall be been purchased
and canceled by the City, or when payment of the principal of and interest thereon to the
respective date of maturity or redemption (a) shall have been made or caused to be made in
accordance with the terms thereof; or (b) shall have been provided for by depositing with a
national or state bank having trust powers or trust company, in trust solely for such payment (1)
sufficient money to make such payment and /or (2) Deposit Securities in such amount and
bearing interest at such rates and payable at such time or times and maturing or redeemable at
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 2010 Bond under
18
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 2010 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 2010 Bond unless the Series 2010 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 2010 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 2010 Bond. The holder of the Series 2010 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 Series 2000 Ordinance, the Series 2000B Ordinance, the Series 2006
Ordinance and any ordinance authorizing Additional Bonds.
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 2010 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 2010 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
19
any information report with respect to the issuance of the Series 2010 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 8th day of June, 2010.
JA�MR ALPH, MAYOR
�' Ji1
;.
(SEAL)
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 passed
at a regular meeting of the Mayor and City Council of said City held on the 25th day of May,
2010.
B DA R. WHEELER, CITY CLERK
18
RECEWED
AUG
Nebraska Dent of Environmental
Quality
y' — L 171
LOAN AGREEMENT
(Governmental Borrower)
Between
NEBRASKA DEPARTMENT OF ENVIRONMENTAL QUALITY
and
CITY OF BLAIR, NEBRASKA
NDEQ PROJECT NO. D311530
DATED AS OF AUGUST 12, 2010
The interest of the Nebraska Department of Environmental Quality ( "NDEQ') in the interest portion of the
Loan Repayments to be made by the Borrower (the "Revenues') under this Loan Agreement has been or
may be pledged and assigned to the Nebraska Investment Finance Authority (`N FA') pursuant t o a e
Pledg
Agreement between NDEQ and the NIFA. The interest of NIFA in the Revenues has been or may
Pledged as security for the payment of the principal of, redemption premium, if any, and interest on NIFA's
Drinking Water Facilities Loan Fund Revenue Bonds.
TABLE OF CONTENTS
TABLE CONTENTS ................................................................................................................... ..............................2
ARTICLE I
DEFINITIONS .................................................................................................................................... ..............................5
ARTICLE II
LOANCONDITIONS AND TERMS ............................................................................................... ..............................8
SECTION2.01. AMOUNT OF THE LOAN .............................................................................................. ..............................8
SECTION2.02. TERM OF THE LOAN ................................................................................................... ..............................8
SECTION2.03. INTEREST RATE .......................................................................................................... ..............................8
SECTI.ON 2.04. DISBURSEMENT OF LOAN ........................................................................................... ..............................8
SECTION2.05. LOAN PAYMENTS ........................................................................................................ ..............................9
SECTION2.06. ADMINISTRATIVE FEE ............................................................................................... .............................10
SECTION2.07. PROJECT SCHEDULE .................................................................................................. .............................10
SECTION 2.08. DISADVANTAGED BUSINESS ENTERPRISES ............................................................... .............................10
SECTION 2.09. PUBLIC WATER SUPPLY SYSTEM ORDINANCES /USER CHARGE SYSTEMS ............. .............................10
SECTION 2.10. OTHER CONDITIONS AND TERMS .............................................................................. .............................11
ARTICLE III
REPRESENTATIONS AND COVENANTS OF BORROWER ................................................... .............................13
SECTION 3.01. REPRESENTATIONS OF THE BORROWER ................................................................... .............................13
SECTION 3.02. PARTICULAR COVENANTS OF THE BORROWER: ................................................................................... 15
ARTICLE IV
ASSIGNMENT.................................................................................................................................. .............................18
SECTION 4.01. ASSIGNMENT AND TRANSFER BY NDEQ .................................................................. .............................18
SECTION 4.02. ASSIGNMENT BY THE BORROWER ............................................................................ .............................18
ARTICLE V
EVENTSOF DEFAULT AND REMEDIES ................................................................................... .............................19
SECTION5.01. NOTICE OF DEFAULT ............................................................................................... .............................19
SECTION5.02. REMEDIES ON DEFAULT . ................................................. ....... ., ................................ ............................ 19
SECTION5.03. EXPENSES ................................................................................................................. .............................19
SECTION 5.04. APPLICATION OF MONEYS ........................................................................................ .............................19
SECTION 5.05. NO REMEDY EXCLUSIVE; WAIVER; NOTICE ............................................................ .............................20
SECTION5.06. RETENTION OF RIGHTS ............................................................................................. .............................20
ARTICLE VI
MISCELLANEOUS.......................................................................................................................... .............................20
SECTION 6.01. HOLD HARMLESS AGREEMENT ................................................................................ .............................20
SECTION6.02. WAIVERS .................................................................................................................... .............................20
SECTION 6.03. AMENDMENTS, SUPPLEMENTS AND MODIFICATIONS .............................................. .............................20
SECTION6.04. NOTICES ..................................................................................................................... .............................20
SECTION6.05. SEVERABILITY ........................................................................................................... .............................21
2
SECTION6.06. BINDING EFFECT ....................................................................................................... .............................21
- SECTION EXECUTION IN C OUNTERPARTS ................................................................................. ............................ .. 21
SECTION 6.08. GOVERNING LAW AND REGULATIONS............ .......................................................... .............................21
SECTION 6.09. CONSENTS AND APPROVALS ...................................................................................... .............................21
SECTION6.10. FURTHER ASSURANCES ............................................................................................. .............................21
SECTION 6.11. NOTICE TO TRUSTEE ................................................................................................. .............................21
EXHIBIT 1- PROJECT DESCRIPTION ....................................................................................... .............................24
ATTACHMENT A - LOAN REPAYMENT SCHEDULE ............................................................ .............................25
ATTACHMENT B - PROJECT COSTS & PROJECTED OUTLAY SCHEDULE ................... .............................26
ATTACHMENT C - FINANCIAL ANALYSIS .............................................................................. .............................27
ATTACHMENT D - LIST OF FEDERAL LAWS AND AUTHORITIES ................................... .............................31
ATTACHMENT E - FORM OF BORROWER'S COUNSEL OPINION .................................... .............................32
ATTACHMENT F - PROMISSORY NOTE .................................................................................. .............................34
ATTACHMENTG - CERTIFICATE ............................................................................................. .............................36
ATTACHMENT H - FORM OF DEQ REQUEST TO THE TRUSTEE ..................................... .............................37
ATTACHMENT I - ADDITIONAL COVENANTS AND REQUIREMENTS ............... .............................39
9
NEBRASKA DRINKING WATER FACILITIES LOAN FUND
LOAN AG REEM -
American Recovery and Reinvestment Act
THIS LOAN AGREEMENT (the "Loan Agreement "), dated as of August 12, 2010 is entered into by
and between the STATE OF NEBRASKA, acting by and through the Nebraska Department of Environmental
Quality ( "NDEQ ") and the CITY OF BLAIR , NEBRASKA (the "Borrower ").
WITNESSETH:
WHEREAS, the federal Safe Drinking Water Act, including the Safe Drinking Water Amendments
Act of 1996, as amended (the "Federal Act ") established a state revolving fund program and, to fund the
state revolving fund program, the United States Environmental Protection Agency ( "EPA ") will make annual
capitalization grants to the states, on the condition that each state provide an appropriate match for such
state's revolving fund; and
WHEREAS, Neb. Rev. Stat. § 71 -5318 empowers the Director of NDEQ to loan available funds in
the Loan Fund (as defined herein) to borrowers pursuant to the Drinking Water State Revolving Fund Act,
Neb. Rev. Stat. §§ 71 -5314 to 71 -5327, as amended (the "Act "), and rules and regulations adopted under
such Act; and
WHEREAS, under the Act, the Director of NDEQ is given the responsibility for administration and
management of the Loan Fund; and
WHEREAS, the Nebraska Investment Finance Authority ( "NIFA ") is authorized under Neb. Rev. Stat.
§ 58 -201 et seq. and the Act to issue revenue bonds for the purpose of providing funds for NDEQ to loan to
Borrowers within the State of Nebraska for the acquisition, construction, improvement, repair, rehabilitation or
extension of safe drinking water projects (as defined in the Act), in order to provide the state match
requirements of the Federal Act; and
WHEREAS, pursuant to such authorization, at the request of NDEQ, NIFA has issued, and may in
the future issue, from time to time its Drinking Water State Revolving Fund Revenue Bonds (the "State
Revolving Fund Revenue Bonds ") for the purpose of providing funds to NDEQ to loan to persons owning or
operating public water supply systems in Nebraska to pay those eligible portions of the costs of acquiring,
constructing, improving, repairing, rehabilitating or extending safe drinking water projects (as defined in the
Act), and to provide the state match requirements of the Federal Act; and
WHEREAS, NDEQ has entered into a pledge agreement with NIFA dated as of June 26, 2000 (the
"Pledge Agreement "), pursuant to which NDEQ has pledged the interest portion of Loan Repayments (as
defined herein) and certain other revenues to NIFA for the payment of the principal of, redemption premium,
if any, and interest on Drinking Water State Revolving Fund Revenue Bonds, Series 2000A, dated as of June
2000; and on its Drinking Water State Revolving Fund Revenue Bonds, Series 2001A, dated as of March 28,
2001; and on its Drinking Water State Revolving Fund Revenue Bonds, Series 2002A, dated as of December
19, 2002, and on its Drinking Water State Revolving Fund Revenue Bonds, Series 2003A, dated as of June
19, 2003; and on its Drinking Water State Revolving Fund Revenue Bonds, Series 2004A, dated as of
September 16, 2004; and on its Drinking Water State Revolving Fund Revenue Bonds, Series 2005A, dated
as of August 25, 2005; and on its Drinking Water State Revolving Fund Revenue Bonds, Series 2006A,
dated as of June 1, 2006; and on its Drinking Water State Revolving Fund Revenue Bonds, Series 2007A,
dated as of October 17, 2007; and on its Drinking Water State Revolving Fund Revenue Bonds, Series
2008A dated as of October 23, 2008; and
WHEREAS, the Borrower is an "owner" as defined in Neb. Rev. Stat. § 71- 5316(7); and
4
WHEREAS, the project to be financed under this Loan Agreement and described in Exhibit 1 (the
-- "Projectl') -is-a- safe- dr water - project -as - defined in - Neb.- - Rev: S #at: -§ 71- 531-6(9 }; - and - --
WHEREAS, the Project Cost (as hereinafter defined) is based upon estimates of the Borrower and
at times during or at completion of construction the loan amount may be adjusted by NDEQ pursuant to
Section 2.01 of this Loan Agreement; and
WHEREAS, the Project is included in the most recent Drinking Water State Revolving Fund Intended
Use Plan developed by NDEQ and approved by the Nebraska Environmental Quality Council and EPA; and
WHEREAS, NDEQ has approved the Borrower's application for a loan from federal funds and state
match funds if and when received by and made available to NDEQ pursuant to the Federal Act and the Act to
finance Project Costs; and
NOW, THEREFORE, for and in consideration of the award of this Loan Agreement by NDEQ, the
Borrower agrees to complete its Project and to perform under this Loan Agreement in accordance with the
conditions, covenants and procedures set forth below:
Article 1
DEFINITIONS
The following terms as used in this Loan Agreement shall, unless the context clearly requires otherwise,
have the following meanings:
"Act" means the Drinking Water State Revolving Fund Act, Neb. Rev. Stat. §§ 71 -5314 to 71 -5327,
as amended.
"Additional Revenue Obligations" means any obligation for the payment of money undertaken by the
Borrower, which is payable from or secured by a pledge of, or lien upon, the System Revenues incurred after
the date of execution and delivery of this Loan Agreement, and all Existing Revenue Obligations.
"Authorized Representative" means the person or persons authorized pursuant to a resolution or
ordinance of the governing body of the Borrower to perform any act or execute any document relating to this
Loan Agreement.
"Borrower" means the City of Blair, Nebraska that is a party to and is described in the first paragraph
of this Loan Agreement, and its successors and assigns.
"Cut -off Date" means the date established by NDEQ at the Project's final inspection prior to which .
the Borrower will make the final disbursement request for eligible Project Costs.
"Due Date" means the dates specified for payment of principal and interest on the Loan as specified
in Section 2.05.
"Event of Default' means any occurrence of the following events:
(a) Failure by the Borrower to pay, or cause to be paid, any Loan Repayment required to
be paid hereunder when due.
(b) Failure by the Borrower to observe and perform any duty, covenant, obligation or
agreement on its part*to be observed or performed under this Loan Agreement, other than as referred to in
paragraph (a) of this definition, which failure shall continue for a period of 30 days after written notice,
specifying such failure and requesting that it be remedied, is given to the Borrower by NDEQ, unless NDEQ
5
shall agree in writing to an extension of such time prior to its expiration. If the failure stated in such notice is
- -- correctable but - not be- corrected - within the applicable -NDEQ -may- not - unreasonably withhold - its --
consent to an extension of such time up to 90 days from the delivery of the written notice referred to above, if
corrective action is instituted by the Borrower within the applicable period and diligently pursued until the
Event of Default is corrected.
(c) Failure by NDEQ to observe and perform any duty, covenant, obligation or agreement
on its part to be observed or performed under this Loan Agreement which shall continue for a period of
30 days after written notice, specifying such failure and requesting that it be remedied, is given to NDEQ by
the Borrower, unless the Borrower shall agree in writing to an extension of such time prior to its expiration. I
the failure stated in such notice is correctable but cannot be corrected within the applicable period, the
Borrower may not unreasonably withhold its consent to an extension of such time up to 90 days from the
delivery of the written notice referred to above if corrective action is instituted by NDEQ within the applicable
period and diligently pursued until the Event of Default is corrected.
(d) The discovery that any representation made by or on behalf of the Borrower in this
Loan Agreement, or in any instrument furnished in compliance with or with reference to this Loan Agreement
or the Loan, is false or misleading in any material respect.
(e) The discovery that any representation made by or on behalf of NDEQ in this Loan
Agreement, or in any instrument furnished in compliance with or with reference to this Loan Agreement, is
false or misleading in any material respect.
(f) The filing of a petition by or against the Borrower under any federal or state bankruptcy
or insolvency law or other similar law in effect on the date of this Loan Agreement or thereafter enacted,
unless, in the case of any such petition filed against the Borrower, such petition is dismissed within 30 days
after such filing and such dismissal shall be final and not subject to appeal.
(g) Failure of the Borrower generally to pay its debts as such debts become due.
(h) Any event of default under any Existing Revenue Obligation or Additional Revenue
Obligation of the Borrower.
"Existing Revenue Obligation" means any obligation for a payment of money undertaken by the
Borrower which is payable from or secured by a pledge of, or lien upon, the System Revenues existing or
outstanding at the time of execution and delivery of this Loan Agreement by the Borrower. For purposes of
this Loan Agreement, Existing Revenue Obligation(s) shall include: the Borrower's Water System Revenue
Refunding Bonds, Series 2000, date of original issue — September 22, 2000, issued in the original principal
amount of $3,395,000, as authorized by Ordinance No. 1909; the Borrower's Water System Revenue Bond,
Series 2000B, Dated September 8, 2000, issued pursuant to Ordinance No. 1907, in the original drawable
principal amount of $6,815,700, owing to NDEQ; and the Borrower's Water System Revenue Bond, Series
2006, issued pursuant to Ordinance No. 2065, Dated May 26, 2006, in the original principal amount of
$2,700,000, of which the principal amount of $1,500,000 remains outstanding and unpaid as of the date of
this Loan Agreement. The City also has outstanding certain water revenue bond anticipation notes which are
junior in lien and which are to be funded through the issuance of Additional Revenue Obligations which are
expected to be of equal lien and standing with the Loan and the Existing Revenue Obligations as to pledge
and lien on the System Revenues upon compliance with the terms for issuance of "Additional Bonds" under
the terms of the ordinances governing the Existing Revenue Obligations.
"GAAF" means generally accepted accounting principles as applicable to the Public Water Supply
System.
"Indebtedness" means any financial obligation of the Borrower evidenced by an instrument executed
by the Borrower, including this Loan Agreement, Existing Revenue Obligations, Additional *Revenue
Obligations, general obligation bonds or notes, leases or lease- purchase agreements or similar financial
- transactions.
"Initiation of Operation" means the date on which the Borrower places the Project in operation or the
Project is capable of being placed in operation for the purposes for which it was planned, designed and built.
"Late Payment" means any payment that is not received within 15 days of the due date.
"Loan" means the loan made by NDEQ to the Borrower to finance or refinance all or a portion of the
Project Costs pursuant to this Loan Agreement.
"Loan Agreement" means this Loan Agreement, including the Attachments hereto, as it may be
properly supplemented, modified or amended.
"Loan Amount" means the actual amount (not to exceed the amount specified in Section 2.01 hereof)
of the Loan, which NDEQ disburses to the Borrower pursuant to this Loan Agreement.
"Loan Fund" means the Drinking Water Facilities Loan Fund created pursuant to Neb. Rev. Stat.
§ 71- 5318(1).
"Loan Repayments" means the payments of the Loan required to be made by the Borrower pursuant
to Section 2.05 of this Loan Agreement.
"Loan Terms" means the terms of this Loan Agreement provided in Article II of this Loan Agreement.
"NDEQ" means the Nebraska Department of Environmental Quality established pursuant to Neb.
Rev. Stat. § 81 -1501 et seq., as amended.
"NIFA" means the Nebraska Investment Finance Authority, a public body politic and corporate and
an instrumentality of the State, and its successors and assigns established pursuant to Neb. Rev. Stat. §
58 -201 et seq., as amended.
"Note" means a promissory note of the Borrower with respect to the Loan in the form of Attachment
F to this Loan Agreement.
"Project" means the acquisition, construction, improvement, repair, rehabilitation or extension of the
Public Water Supply System, including land, owned or operated by the Borrower and described in Exhibit 1 to
this Loan Agreement, which constitutes a safe drinking water project for which NDEQ is making a Loan to
the Borrower pursuant to this Loan Agreement.
"Project Costs" means costs or expenses necessary or incident to the Project which are directly
attributable thereto and which in the determination of NDEQ are eligible under the Act and the Federal Act.
Project Costs are described in Attachment B.
"Public Water Supply System" means a public water supply system, as defined in Neb. Rev. Stat.
§ 71- 5301(9).
"Regulations" means Title 131, Nebraska Department of Environmental Quality, and any
amendments thereto promulgated by NDEQ pursuant to the Act.
"Retainage" means construction costs held back by the Borrower from the payments due to the
contractor to assure satisfactory completion of the construction contract.
"Revenue Obligation(s)" means (a) the Loan; (b) any revenue bonds of the Borrower outstanding
- from tim - tim - e - and - or - secured - by - a pledge of or upon, - System Revenues; an - c - any
capital leases entered into by the Borrower the rentals of which are payable from, or secured by a pledge of
or lien upon, System Revenues.
"SEC Rule" means Rule 15c2 -12 adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as such rule may be amended from time to time or such other similar rule
regarding disclosure of information in securities transactions.
"State" means the State of Nebraska acting, unless otherwise specifically indicated, by and through
NDEQ and its successors and assigns.
"System Revenues" means the revenues derived by the Borrower from the fees and charges for the
use and services furnished by or through the Borrower's Public Water Supply System.
"Trustee" means Wells Fargo Bank Iowa, N.A., Des Moines, as Trustee under the Master Trust
Indenture dated as of June 26, 2000 by and from NIFA to the Trustee, pursuant to which bonds have been
and will be issued.
"User Charge System" means the methodology used to assess user charge fee(s) for the users of
the Public Water Supply System owned or operated by the Borrower.
Article II
LOAN CONDITIONS AND TERMS
Section 2.01. Amount of the Loan. Subject to all of the terms, provisions and conditions of this
Loan Agreement, and subject to the availability of State and federal funds, NDEQ will loan two million three
hundred forty one thousand four hundred dollars ($2,341,400) to the Borrower to pay a portion of the Project
Costs described in Attachment B hereto. The actual amount of the Loan 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, based upon
reductions in the actual total Project Costs as determined following the completion of construction of the
Project. The Borrower must make provision for the payment of all costs exceeding the Loan Amount,
provided that the Borrower may request that NDEQ provide supplemental loan funds through a separate loan
agreement, the approval of which shall be dependent on availability of unobligated funds in the Loan Fund
and NDEQ's subsequent written approval of such request in its sole discretion upon such additional terms,
conditions and covenants as NDEQ may then require.
Section 2.02. Term of the Loan. The Borrower agrees to begin repayment of principal and interest
on the Loan Amount within one year from the date of Initiation of Operation, but no later than three years
from the date of the Loan, and to repay such Loan in full no later than 30 years from Initiation of Operation
and to pay all principal, interest, administrative fees and penalty fees when due.
Section 2.03. Interest Rate. The interest rate on the Loan Amount is determined by NDEQ
pursuant to Regulations and the Intended Use Plan. The interest rate on the Loan Amount disbursed to the
Borrower pursuant to this Loan Agreement during the period of construction shall be 2.0% and after the date
of Initiation of Operation shall be 2.3% per annum (calculated on the basis of a year equaling 360 days made
up of 12 months of 30 days each). For the purposes of this paragraph "construction" shall mean the period
between the date of this Loan Agreement and the date of Initiation of Operation.
Section 2.04. Disbursement of Loan. Upon receipt of a disbursement request for work completed
accompanied by any certification from the Borrower required by NDEQ, NDEQ shall make progress
disbursements that correspond to such request of the Loan Amount to be used by the Borrower for Project
-- Costs - -- The- Bor-r-ower- -may obtain -a-copy-of-the--d isbur-ser-r-tent-recor-d -u pon- request- to - NDEQ. -Each
disbursement shall be an ACH by the State and shall be equal to that portion of the unobligated principal of
the Loan Amount incurred for Project Costs to the date of the request for disbursement from the Borrower.
Submitted requests for disbursement must be supported by proper invoices for Project Costs, a certificate of
the Authorized Representative to the effect that all representations made in this Loan Agreement remain true
as of the date of the request and that no adverse developments affecting the financial condition of the
Borrower or its ability to complete the Project or to repay the Loan have occurred since the date of this Loan
Agreement, and other documentation acceptable to and approved by NDEQ. Disbursement requests should
be submitted before the first or the fifteenth of each month to facilitate timely processing. All disbursement
requests must be made prior to the Cut -off Date established at the Project's final inspection by NDEQ.
The Borrower may request disbursement of the Loan Amount for eligible Project Costs, when such
Project Costs have been incurred and are due and payable to project contractors. However, actual payment
of such Project Costs by the Borrower is not required as a condition of a payment request. Disbursement
requests will be processed on or about the fifth and twentieth day of each month. Any Retainage withheld by
the Borrower corresponding to the progress payment made to any contractor will be withheld by NDEQ until
such Retainage is either reduced or released to the contractor by the Borrower.
The Borrower shall submit a draft of the operation and maintenance manual for the Project to NDEQ
before disbursements exceed 75% of the Project Costs. The Borrower shall submit a final operation and
maintenance manual to NDEQ and receive approval before disbursements exceed 95% of the Project Costs.
Section 2.05. Loan Payments.
(a) Principal and Interest Payments. The Borrower shall pay to NDEQ, or at the
direction of NDEQ, to NIFA or the Trustee, on or before the due dates specified below, but shall be obligated
to pay only from the sources specified in Section 3.02 hereof, appropriate installments of principal and
interest until all principal and interest due on the Loan to NDEQ has been paid in full. Installments of
principal and interest (total debt service) shall be paid semiannually on December 15 and June 15 of each
year in accordance with the Loan Repayment Schedule in Attachment A.
NDEQ will send the Borrower an invoice for each required payment at least 30 days prior to
the due date. When a Loan disbursement occurs after invoices are mailed, NDEQ will include adjustments
for interest and fee charges on the next semiannual invoice.
(b) Optional Prepayment of the Loan. The Borrower may prepay the Loan, together with
any accrued interest in whole or in part, at any time without penalty. The Borrower may make a partial
prepayment of the Loan Amount only if the prepayment amount is greater than 10% of the outstanding Loan
Amount. NDEQ shall prepare a new Loan Repayment Schedule to revise Attachment A following receipt of
any partial prepayment of the Loan.
(c) Mandatory Prepayment of Loan. If the Borrower receives a grant from any source for
any portion of the Project Costs for which a portion of the Loan Amount has been disbursed and is
outstanding under this Loan Agreement, such portion of the Loan Amount shall become immediately due and
payable.
(d) Delinquent Payment Penalty and Penalty Interest. Payments shall be considered
delinquent if not received within 15 days of the due date and for any such delinquent payment, the Borrower
agrees to pay an administrative penalty equal to 5% of said delinquent payment. In addition, the Borrower
agrees to pay penalty interest on any such delinquent payment at the rate of 1 % per month of the amount of
such delinquent payment from and after the due date until it is paid.
Section 2.06. Administrative Fee. The Borrower shall pay to NDEQ, or at the direction of NDEQ,
._ NfiFA or tlTe an annual -- administrative fee per - annum - of - the - Loan A mount be - in -
semiannual installments of 0.5% of the Loan Amount outstanding on the date invoices are mailed in
accordance with the Loan Repayment Schedule in Attachment A. The fee is waived for the first year of the
Loan.
Section 2.07. Project Schedule. The Borrower agrees to perform steps of the Project in
accordance with the following project schedule and the milestone compliance dates provided under the
ARRA Provisions above:
(a) Sign Loan Agreement August 2010;
(b) Construction Start April 2011;
(c) Substantial Completion November 2013;
(d) Initiation of Operation (100) November 2013.
Section 2.08. Disadvantaged Business Enterprises. The Borrower agrees that 10% of the Loan
Amount shall be the objective for proposed Disadvantaged Business Enterprises (Small Business
Enterprise /Minority Business Enterprise /Women's Business Enterprise /Small Business Rural Area), Including
Historically Black Colleges and Universities ( "DBE /HBCU ") subagreement work under this Loan Agreernent.
The Borrower shall take affirmative steps to assure that small, minority and women's businesses pursuant to
40 C.F.R. 31.36(e) and small businesses in rural areas pursuant to 13 C.F.R. 121.2 are used when possible
as sources of supplies, construction and services. Affirmative steps shall include the following:
(a) Placing disadvantaged business enterprises, including minority, women's, small
businesses and small businesses in a rural area and historically black colleges and universities on
solicitation lists;
(b) Assuring that disadvantaged business enterprises and historically black colleges and
universities are solicited whenever they are potential sources;
(c) Dividing total requirements, when economically feasible, into smaller tasks or quantities
to permit maximum participation by disadvantaged business enterprises;
(d) Establishing delivery schedules, where the requirement permits, which encourage
participation by disadvantaged business enterprises;
(e) Using the services and assistance of the Small Business Administration and Minority
Business Development Agency of the United States Department of Commerce; and
(f) Requiring the prime contractor to take the affirmative steps listed above.
In addition, the Borrower agrees to submit to NDEQ a completed SF 334 form within 15 days after
the end of each federal fiscal quarter during which the Borrower or its contractors award any subagreements
to a disadvantaged business enterprise for building and building - related services and supplies.
Section 2.09. Public Water Supply System Ordinances /User Charge Systems The Borrower
agrees to adopt and implement such changes to its Public Water Supply System Ordinance /User Charge
System as determined by NDEQ from time to time to be necessary to comply with the Regulations. The
Borrower agrees that it shall not modify or amend or make additions to or deletions from its Public Water
Supply System Ordinance /User Charge System without the consent of NDEQ during the term of this Loan
Agreement, provided, however, that any increase in rates and charges necessary or deemed necessary by
the governing body of the Borrower in order to comply with the provisions of any ordinance or any other
agreement relating to any Existing Revenue Obligations for which the System Revenues have been pledged
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or any increase deemed necessary by the governing body of the Borrower in order to permit the issuance of
or provide for the payment of Addition Obligationis m ay - made - without consent of - NDEQ 1 - -
Section 2.10. Other Conditions and Terms.
(a) Engineering Services. The Borrower shall provide and maintain competent and
adequate engineering supervision and resident inspection during construction.
(b) Construction Contract Award. The Borrower shall obtain NDEQ concurrence and
authorization prior to award of each construction contract.
(c) Initiation of Operation. The Borrower shall provide written notification to NDEQ of the
date of Initiation of Operation of the Project. On failure of the Borrower to set an acceptable Initiation of
Operation date NDEQ will look at the construction record and set the Initiation of Operation date.
(d) Construction Completion. The Borrower shall provide written notification to NDEQ of
the construction completion date of the Project.
(e) Capacity Development. The Borrower agrees to maintain a system of records for
annual review and reporting of technical, managerial, and financial capacity of its Public Water Supply
System to demonstrate continued compliance with the requirements of the Nebraska Safe Drinking Water
Act as provided under Title 179 NAC2 and the requirements of an operating permit, as issued by the
Nebraska Department of Health and Human Services, Division of Public Health effective October 1, 1999 for
new community water supply systems, and October 1, 2000 for existing community water supply systems.
(f) Contractor's Security. The Borrower agrees to require any contractor of the Project to
post separate performance and payment bonds or other security approved by NDEQ in the amount of the
bid.
(g) Certified Operator. The Borrower agrees to provide a certified operator pursuant to
Title 179 NAC10- Operator Certification.
(h) Site Title and Easements. The Borrower must certify that site title, including all
easements and rights -of -way necessary to allow construction of the Project, has been obtained prior to
award of each construction contract (i.e., all real property has been acquired, bona fide options have been
taken or formal condemnation proceedings have been initiated for necessary real property).
(i) Contractor's Payments. The Borrower agrees to make prompt payment to its
contractor(s) of sums due for construction and to retain only such amounts as may be justified by specific
circumstances and provisions of the construction contract.
statement:
(j) Bid Solicitation. The Borrower agrees that all bid solicitations will include the following
The prospective participants must certify by submittal of EPA Form 5700 -49 "Certification
Regarding Debarment, Suspension and Other Responsibility Matters" that, to the best of its knowledge and
belief, it and its principals are not presently debarred, suspended, proposed for debarment, declared
ineligible or voluntarily excluded from covered transactions by any federal department or agency.
(k) Debarment or Suspension. The Borrower acknowledges that doing business with
any party appearing in the "List of Parties Excluded from Federal Procurement or Non Procurement
Programs" may result in disallowance of federal funds under this Loan Agreement and may also result in
suspension or debarment under 40 C.F.R. Part 32.
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(1) Other Federal Requirements. The Borrower agrees to comply with other applicable
- fed - eral -- Requirements - in - Attachment hereto: -- - --
(m) Project Sign. The Borrower agrees to display the project sign provided by NDEQ.
The sign will remain the property of NDEQ and will be retrieved soon after project completion. The Borrower
will remove the sign for NDEQ when requested.
(n) Employment under Public Contracts, LB 403. The Borrower agrees to comply with
the provisions of LB403, approved by the Governor April 8, 2009. The following language is required and will
be included in all contracts made with contractors and is a pass through requirement for his or her
subcontractors.
"The Contractor is required and hereby agrees to use a federal immigration verification system to
determine the work eligibility status of new employees physically performing services within the State
of Nebraska. A federal immigration verification system means the electronic verification of the work
authorization program authorized by the Illegal Immigration Reform and Immigrant Responsibility Act
of 1996, 8 U.S.C. 1324a, known as the E- Verify Program, or an equivalent federal program
designated by the United States Department of Homeland Security or other federal agency
authorized to verify the work eligibility status of a newly hired employee. if the Contractor is an
individual or sole proprietorship, the following applies: 1. The Contractor must complete the United
States Citizenship Attestation Form, available on the Department of Administrative Services website
at www.d as. state. ne.us 2. If the Contractor indicates on such attestation form that ho or she is a
qualified alien, the Contractor agrees to provide the US Citizenship and Immigration Services
documentation required to verify the Contractor's lawful presence in the United States using the
Systematic Alien Verification for Entitlements (SAVE) Program; and, 3. The Contractor understands
and agrees that lawful presence in the United States is required and the Contractor may be
disqualified or the contract terminated if such lawful presence cannot be verified as required by Neb.
Rev. Stat. §4 -108"
(o) Prevailing Wage
All laborers and mechanics employed by contractors and sub contractors on projects funded directly
by or assisted in whole or in part by and through the Federal Government pursuant to the Public Law 111 -88
shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as
determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United
States Code. With respect to the labor standards specified in this section, the Secretary of Labor shall have
the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (64 Stat. 1267; 5
U.S.C.App.) and section 3145 of title 40, United States Code.
The Borrower is responsible to insure compliance with the prevailing wage requirements and will
include the following information in the contract documents:
Contractors and subcontractors on USEPA federally assisted construction projects are required to
pay their laborers and mechanics not less than those established by the U.S. Department of Labor. A
current wage decision containing the appropriate building and /or heavy type rates shall be included in the
specifications. In addition, labor standard provisions, Davis Bacon and Related Acts, for federally assisted
contracts shall be placed in the federal assurances of project specifications.
If an areawide decision or classification does not exist for the type of work to be performed, building
or heavy, a decision or re.gijost for authorization of additional classification and rate must be requested from
the Labor Department using the Standard Form 1444, Request for Authorization of Additional Classification
and Rate available on the web and can be completed on line at: http: / /www.wdol.gov /does /sfl444.pdf
These types of decisions or classifications are project specific, i.e. they are applicable only to the project for
which they are requested and may not be used. on any other project. Project decisions generally have an
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expiration date of 180 days after the date of issuance. Modifications or reissued decisions are applicable to
-- project - if - received - by - NDEQ - not - less than - 1 - 0 - d - gys - pri - or - to - opening. - ModificatiorTs - to - classification► - and -
wage rates after bid opening shall be paid to all workers performing work in the new or modified classification
from the first day on which work is performed in the additional classification as approved by the Administrator
of the Wage and Hour Division, Employment Standards Administration, US Department of Labor.
Weekly Payrolls shall be submitted by the contractor to the Borrower or the Borrower's
representative utilizing the Department of Labor Form WH -347. A webform which can be completed on -line
is found at www.dol.gov /whd /forms /wh347.pdf. Instructions are also found on -line. The Borrower may also
be required to submit copies of the Weekly Payrolls to NDEQ. As to each payroll copy received, the
Borrower shall provide written confirmation on a form supplied by NDEQ indicating whether or not the project
is in compliance with the requirements of 29 CFR 5.5(a)(1) based on the most recent payroll copies for the
specified week. The Borrower or Borrower's representative shall periodically interview a sufficient number of
the contractor's or subcontractor's employees entitled to Davis Bacon prevailing wages to verify that
contractors or subcontractors are paying the appropriate wage rates. As provided in 29 CFR 5.6(a)(6), all
interviews must be conducted in confidence. The Borrower must use Standard Form 1445 or equivalent
documentation to memorialize the interviews. Copies of the SF 1445 form are available at
http: / /www..gsa.gov At a minimum, the Borrower or the Borrower's representative should conduct interviews
with a representative group of covered employees within two weeks of each contractor or subcontractor's
submission of its initial weekly payroll data and two weeks prior to the estimated completion date for the
contract or subcontract.
Article III
REPRESENTATIONS AND COVENANTS OF BORROWER
Section 3.01. Representations of the Borrower. The Borrower represents as follows:
(a) Organization and Authority.
(i) The Borrower is a city, town, village, district, association or other public body
created by or pursuant to the constitution and statutes of the State of Nebraska.
(ii) The Borrower has full legal right and authority and all necessary licenses and
permits required as of the date hereof to own, operate and maintain its Public Water Supply System, to carry
on its activities relating thereto, to execute and deliver this Loan Agreement, to undertake and complete the
Project, and to carry out and consummate all transactions contemplated by the Loan.
(iii) The proceedings of the Borrower's governing body conducted to approve this
Loan Agreement and approve its execution, issuance and delivery on behalf of the Borrower, and authorizing
the Borrower to undertake and complete the Project, have been duly and lawfully convened and conducted
and the ordinance of the Borrower's governing body approving such matters has been duly and lawfully
adopted.
(iv) This Loan Agreement has been duly authorized, executed and delivered on
behalf of the Borrower and constitutes the legal, valid and binding obligation of the Borrower enforceable in
accordance with its terms, except to the extent that enforceability may be limited by laws related to
bankruptcy, insolvency or other similar laws affecting creditors' rights generally and general principles of
equity.
(b) Full Disclosure. To the best knowledge of the Borrower, after due investigation, there
is no fact that the Borrower has not disclosed to NDEQ in writing on the Borrower's application for the Loan
or otherwise anything that materially adversely affects or that will materially adversely affect the properties,
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activities of its Public Water Supply System, or the ability of the Borrower to make all Loan Repayments and
- otherwise observe'and perform its - obligations - and -- agreement under - this - L - oan - Agreemen .
(c) Non - Litigation. There is no controversy, suit or other proceeding of any kind pending
or threatened questioning, disputing or affecting in anyway (i) -the legal organization of the Borrower or its
boundaries, (ii) the right or title of any of its officers to their respective offices, (iii) the legality of any official
act taken in connection with obtaining the Loan, (iv) the constitutionality or validity of the indebtedness
represented by this Loan Agreement, (v) any of the proceedings had in relation to the authorization or
execution or the pledging of the revenues of the Borrower's Public Water Supply System under this Loan
Agreement, or (vi) the ability of the Borrower to make all Loan Repayments or otherwise observe and
perform its duties, covenants, obligations and agreements under this Loan Agreement.
(d) Compliance With Existing Laws and Agreements. The authorization, execution and
delivery of this Loan Agreement by the Borrower, and the performance by the Borrower of its duties,
covenants, obligations and agreements thereunder, will not violate any law to which the Borrower is subject
or breach. any agreement to which the Borrower is a party.
(e) No Defaults. No event has occurred and no condition exists that would constitute an
Event of Default. The Borrower is not in violation of any agreement which would materially adversely affect
the ability of the Borrower to make all Loan Repayments or otherwise observe and perform its duties,
covenants, obligations and agreements under this Loan Agreement.
(f) Governmental Consent. The Borrower has obtained all permits and approvals
required to date under this Loan Agreement or for the undertaking or completion of the Project and the
financing or refinancing thereof. The Borrower has complied with all applicable provisions of law requiring
any notification, with any governmental body or officer in connection with this Loan Agreement or with the
undertaking or completion of the Project and the financing or refinancing thereof.
(g) Compliance With Law. The Borrower:
(i) is in compliance with all laws, ordinances, governmental rules and regulations
to which it is subject, including, without limitation, any public hearing or public notice requirements or
environmental review requirements contained in the Regulations, with which the failure to comply would
materially adversely affect the ability of the Borrower to conduct its activities, enter into this Loan Agreement
or undertake or complete the Project; and
(ii) has obtained all licenses, permits, franchises or other governmental
authorizations presently necessary for the ownership of its property which, if not obtained, would materially
adversely affect the ability of the Borrower to complete the Project.
(h) Use of Loan Proceeds. The Borrower will apply the proceeds of the Loan as
described in Article II: (i) to finance or refinance a portion of the Project Costs and (ii) where applicable, to
reimburse the Borrower for a portion of the Project Costs, which portion was paid or incurred in anticipation
of reimbursement by NDEQ and is eligible for such reimbursement pursuant to the Regulations. All of such
costs constitute Project Costs for which NDEQ is authorized to make Loans to the Borrower pursuant to the
Act and the Regulations.
(1) Project Costs. The Borrower certifies that the Project Costs, as listed in Attachment B,
are reasonable and accurate estimations and, upon direction of NDEQ, will supply the same with a certificate
from its engineer stating that such costs are reasonable and accurate estimations, taking into account
investment income, if any, to be realized during the course of construction of the Project and other money
that would, absent the Loan, have been used to pay the Project Costs.
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Section 3.02. Particular Covenants of the Borrower.
(a) Dedicated Source of Revenue for Repayment of the Loan. The Borrower hereby
pledges the System Revenues as the dedicated source of revenue for the repayment of the Loan. The
Borrower shall fix, establish, maintain and collect such rates, fees and charges for the use and services
furnished by or through the Borrower's Public Water Supply System, including all improvements and
additions hereafter constructed or acquired by the Borrower, as will provide revenues sufficient to (i) pay the
cost of the operation and maintenance, and replacement of the Public Water Supply System, (ii) pay at least
110% of the principal of and interest on the Loan as and when the same become due, and (iii) pay all other
amounts due at any time under this Loan Agreement; provided, however, the lien of NDEQ on the revenues
of the Borrower's Public Water Supply System shall be on a parity with the lien on such revenues of the
Borrower's Existing Revenue Obligations and any Additional Revenue Obligations hereafter issued on parity
with such Existing Revenue Obligations. These revenues shall be set aside as collected and deposited in a
separate fund. Such fund shall be divided into at least two separate accounts, one for the operation and
maintenance costs and the other for principal and interest payments on the Loan and any other Revenue
Obligations of equal lien. The Borrower shall deposit monthly, in the Loan payment account, an amount
equal to at least one -sixth of the anticipated amount due on the next Loan payment date. The Borrower
agrees to develop the User Charge System based on actual or estimated use of public water supply
services, providing that each user or user class pay its proportionate share of operation and maintenance
(including replacement) costs within the Borrower's service area, based on the user's classification and
proportionate water usage demand compared to total system water usage demand and to conduct at least a
biennial review of user charge rates to review the adequacy of the user charge rates. NDEQ acknowledges
and agrees that the Borrower has entered into a Water Service Agreement with Cargill, Inc., dated June 27,
2000 (as supplemented by the First Addendum to Water Service Agreement dated as of February 27, 2001
and as amended by the First Amendment to Water Service Agreement dated March 9, 2007), providing for
certain specific rates and charges to be paid -by Cargill, Inc., and that the terms of such contract shall limit the
charges to be imposed upon such customer during the term of such Water Service Agreement. The
Borrower agrees the initial financial analysis performed by NDEQ in Attachment C is a reasonable estimate
of the Project Costs, of the financial situation of the Borrower in relation to the Project, and of the user
charges necessary at the time of Initiation of Operation of the Project, provided that the Borrower makes no
representation with respect to funds available for State intercept as set forth in such Attachment C.. NDEQ
may review this information annually to insure the Borrower's compliance with this condition and update
Attachment C to reflect any changes.
(b) Performance Under Loan Agreement. The Borrower covenants and agrees:
(i) to comply with all applicable State and federal laws, rules and regulations in the
performance of this Loan Agreement (including, but not limited to the federal crosscutting issues listed in
Appendix A of the EPA's final Drinking Water State Revolving Fund Program Guidelines and set forth on
Attachment D hereto and NDEQ Regulations); and
(ii) to cooperate with NDEQ in the observance and performance of the respective
duties, covenants, obligations and agreements of the Borrower and NDEQ under this Loan Agreement.
and agrees:
(c) Completion of Project and Provision of Moneys Therefor. The Borrower covenants
(i) to exercise its best efforts in accordance with prudent public water supply utility
practice to complete the Project and to so accomplish such completion on or before the estimated Project
completion date set forth in Article II hereto; and
(ii) to provide from its own financial resources all moneys, in excess of the total
amount of proceeds it receives pursuant to this Loan Agreement, required to complete the Project.
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(d) Delivery of Documents. Concurrently with the delivery of this Loan Agreement (as
ze
or
-- revioasl authid - and executed t Loan Closin , th - e Borrowervvill cau se - to - be delivered to - NDEQ
P Y_ - ) -- a e g
each of the following items:
(i) counterparts of this Loan Agreement (as previously executed by parties hereto);
(ii) copies of the ordinances and /or resolutions of the governing body of the
Borrower authorizing the execution and delivery of this Loan Agreement certified by an Authorized
Representative;
hereto;
(iii) an Opinion of Borrower's Counsel substantially in the form of Attachment E
(iv) an executed Note (or other evidence of indebtedness) evidencing the
Borrower's obligations under this Loan Agreement in the form of Attachment F;
require.
(v) an executed certificate of the Borrower in the form of Attachment G hereto; and
(vi) such other certificates, documents, opinions and information as NDEQ may
(e) Operation and Maintenance of Public Water Supply System. The Borrower
covenants and agrees that it shall, in accordance with Title 179 NAC22 — Operation and Maintenance of
Community and non - Transient Non - Community Public Water Systems:
efficient manner; and
(i) at all times operate the properties of its Public Water Supply System in an
(ii) maintain its Public Water Supply System, making all necessary and proper
repairs, renewals, replacements, additions, betterments and improvements necessary to maintain its system
in good repair, working order and operating condition.
(f) Disposition of Public Water Supply System. The Borrower covenants that it intends
to own and operate the Project at all times during the term of the Loan. The Borrower does not know of any
reason why the Project will not be so used in the absence of (i) supervening circumstances not anticipated by
the Borrower at the time of the Loan, (ii) adverse circumstances beyond the control of the Borrower or
(iii) obsolescence of such insubstantial parts or portions of the. Project as may occur as a result of normal
use thereof.
The Borrower shall not sell, lease, abandon or otherwise dispose of all or substantially all of
its Public Water Supply System except on 90 days' prior written notice to NDEQ and, in any event, shall not
so sell, lease, abandon or otherwise dispose of the same unless the Borrower shall in accordance with
Section 4.02 hereof assign this Loan Agreement and its rights and interests hereunder to the purchaser or
lessee of the Public Water Supply System and such purchaser or lessee shall assume all duties, covenants,
obligations and agreements of the Borrower under this Loan Agreement. In no event shall the Borrower sell,
lease, abandon or otherwise dispose of the Public Water Supply System to any person or entity other than a
municipal corporation or other political subdivision of the State of Nebraska, or any combination thereof, that
has legal authority to own or operate the Public Water Supply System.
Before any proposed disposition of the Public Water Supply System can be made, the
Borrower shall provide NDEQ, and NIFA if NIFA is an assignee of the Note, with an opinion of a nationally
recognized bond counsel that such proposed disposition is permitted by the provisions of this subparagraph,
and, further, that such disposition shall not endanger the exclusion from gross income for federal income tax
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purpo of the interest on any bonds issued to fund deposits into the Loan Fund, nor shall it relieve the
— Bo "rrower duties, covenants; obtigations and agreements - this Loan -
(g) Records and Accounts.
(i) The Borrower shall keep accurate records and accounts for its Public Water
Supply System (the "System Records "), which shall be separate and distinct from its other records and
accounts (the "General Accounts "). The System Records and General Accounts shall be made available.for
inspection upon request by NDEQ at any reasonable time. The Borrower shall, upon written request by
NDEQ during the term of the Loan, perform and provide NDEQ a written audit of its System Records and /or
General Accounts, provided such audit shall not be due to NDEQ sooner than 210 days following the close of
the fiscal year, or years, identified in the request for audit. In the event that during the period in which the
Project financed by this agreement is under construction, and the Borrower expends, for any purpose, total
federal funds in excess of $500,000 during the Borrower's fiscal year, then the Borrower shall, irrespective of
any request from NDEQ, provide NDEQ a copy of the single agency audit made on the Borrower's General
Accounts performed by an independent registered municipal accountant required in such cases by the
Federal Single Audit Act Amendments of 1996, OMB Circular No. A -133, Audits of States, Local
Governments, and Non - Profit Organizations. In the sole discretion of NDEQ, any requirement herein to
perform and /or provide an audit at the request of NDEQ may be waived by NDEQ on the basis of the
Borrower's receipt of an audit waiver received from some other government agency and accurately
acknowledging the Borrower's obligation to NDEQ under this Loan or for any other reason acceptable to
NDEQ.
(ii) The Borrower shall maintain its accounts in accordance with generally
accepted government accounting standards defined in the Government Accounting, Auditing, and Financial
Reporting Manual (1994 Ed.), or any other more current edition thereafter, issued by the Government
Finance Officers Association. The Borrower's Basic Financial Statements shall comply with the government -
wide perspective model and, where applicable, the Statement of Infrastructure Assets proscribed by
Government Accounting Standards Board Statement 34.
(h) inspections; Information. Upon the assignment of the Note to NIFA and thereafter,
the Borrower shall permit the EPA, NDEQ and any party designated by NDEQ to examine, visit and inspect,
at any and all reasonable times, the property, if any, constituting the Project, and to inspect and make copies
of any accounts, books and records, including (without limitation) its records regarding receipts,
disbursements, contracts, investments and any other matters relating thereto and to its financial standing,
and shall supply such reports and information as the EPA and NDEQ may reasonably require in connection
therewith.
(i) Financial Information. The Borrower specifically agrees to provide to NDEQ a
reasonable number of copies of such financial information and operating data of the Borrower and the Public
Water Supply System and the prompt notification of the occurrence of certain material events, to the extent
necessary for NDEQ to comply with its continuing disclosure obligations set forth in the SEC Rule. Such
financial information shall be audited in accordance with the provisions of subsection (g)(ii) hereof. Such
financial information shall be prepared in accordance with GAAP. Such financial information and operating
data, if requested, shall be supplied within 210 days after the end of its fiscal year. If audited financial
information will be prepared, but is not available within 210 days of the end of the appropriate Borrower's
fiscal year, unaudited financial information shall be provided to NDEQ pending receipt of audited financial
information. For purposes of this paragraph, "material event" shall mean (a) principal and interest payment
delinquencies on any Indebtedness, (b) non - payment - related defaults in agreements authorizing any
Indebtedness, (c) rating changes on any Indebtedness, (d) adverse tax opinions or events affecting the
tax - exempt status of any Indebtedness, or (e) unscheduled draws on debt service reserves or credit
enhancements on any Indebtedness reflecting financial difficulties.
17
(j) Insurance. The Borrower will carry and maintain such reasonable amount of all risk
- — insurance on - ail - pro - perties -and - all -- operations of the Water System , - as - woul - d - - be - carried - by
similar sized municipal operators of a Public Water Supply System, insofar as the properties are of an
insurable nature.
(k) Continuing Representations. The representations of the Borrower contained herein
shall be true at the time of the execution of this Loan Agreement and at all times during the term of this Loan
Agreement.
(1) Notice of Material Adverse Change. The Borrower shall promptly notify NDEQ of any
material adverse change in the activities, prospects or condition (financial or otherwise) of the Borrower's
Public Water Supply System, or in the ability of the Borrower to make all Loan Repayments and otherwise
observe and perform its duties, covenants, obligations and agreements under this Loan Agreement.
(m) Additional Covenants and Requirements. If necessary in connection with the
making of the Loan, additional covenants and requirements are listed on Attachment H hereto. The
Borrower agrees to observe and comply with each such additional covenant and requirement, if any.
Article IV
ASSIGNMENT
Section 4.01. Assignment and Transfer by NDEQ. The Borrower hereby approves and consents
to any assignment or transfer of this Loan Agreement that NDEQ deems necessary in connection with the
operation and administration of the Loan Fund. The Borrower hereby specifically approves the assignment
and pledging of the interest portion of the Loan Repayments to NIFA.
Section 4.02. Assignment by the Borrower. This Loan Agreement may not be assigned by the
Borrower for any reason, unless the following conditions shall be satisfied:
(a) NDEQ shall have approved said assignment in writing;
(b) the assignee is a city, town, village district, association, county or other public body
created by or pursuant to State law of the State of Nebraska or any combination thereof, that has legal
authority to own or operate the Public Water Supply System;
(c) the assignee shall have expressly assumed in writing the full and faithful observance
and performance of the Borrower's duties, covenarrls, and obligations under this Loan Agreement; provided,
however, such assignment shall not relieve the Borrower of its duties, covenants, and obligations under this
Loan Agreement;
(d) the assignment will not adversely impact NDEQ's ability to meet its duties, covenants
and obligations under the Pledge Agreement as determined in writing by NDEQ;
(e) the assignment will not adversely affect the exclusion from gross income for federal tax
purposes of the interest on any bonds issued by NIFA to fund deposits into the Loan Fund; and
(f) the Borrower shall provide NDEQ, and NIFA if NIFA is an assignee of the Note, with (i)
an opinion of a qualified attorney that each of the conditions set forth in subparagraphs (b) and (u) above has
been met, and (ii) an opinion of nationally recognized bond counsel that the condition set forth in
subparagraph (e) above has been met.
im
Article V
EVENTS OF DEFAULT AND REMEDIES
Section 5.01. Notice of Default. if an Event of Default shall occur, the nondefaulting party shall
give the party in default and NIFA prompt telephonic notice of the occurrence of such Event of Default,
provided the nondefaulting party has knowledge of such Event of Default. Such telephonic notice shall be
immediately followed by written notice of such Event of Default given in the manner set forth in Section 6.04
hereof.
Section 5.02. Remedies on Default.
(a) Whenever an Event of Default shall have occurred and be continuing, NDEQ or the
Borrower shall have the right to take whatever action at law or in equity may appear necessary or desirable to
collect the amounts then due and to become due or to enforce the performance and observance of any
obligation or agreement of NDEQ or the Borrower (including, without limitation, withholding remaining Loan
disbursements, cancellation of this Loan Agreement and acceleration of the remaining scheduled principal
payments set forth on Attachment A, or such other remedies provided to NDEQ in the Act and the
Regulations).
(b) If the Borrower fails to make any payment of principal and interest, late fee, and
penalty interest imposed pursuant to this Loan Agreement within 60 days of the due dates specified in
Section 2.05, the payment shall be deducted from the amount of aid to municipalities to which the Borrower
is entitled under Neb. Rev. Stat. §§ 77- 27,136 to 77- 27,137.01. Such amount shall be paid directly to the
Loan Fund.
Section 5.03. Expenses.
(a) Upon the occurrence of an Event of Default on the part of the Borrower, and to the
extent permitted by law, the Borrower shall, on demand, pay to NDEQ the reasonable fees and expenses
incurred by NDEQ in the collection of Loan Repayments or any other sum due hereunder or in the
enforcement of performance or observation of any other duties, covenants, obligations or agreements of the
Borrower contained herein. Prior to incurring any such expenses, NDEQ shall provide written notice to the
Borrower that it intends to incur such expenses; provided, however, a failure by NDEQ to give such notice
shall not affect NDEQ's right to receive payment for such expenses. Upon request by the Borrower, NDEQ
shall provide copies of statements evidencing the fees and expenses for which NDEQ is requesting payment.
(b) Upon the occurrence of an Event of Default on the part of NDEQ, and to the extent
permitted by law and availability of appropriated funds by the Nebraska Legislature, NDEQ shall, on demand,
pay to the Borrower the reasonable fees and expenses incurred by the Borrower in the enforcement of
performance or observation of any of the duties, covenants, obligations or agreements of NDEQ contained
herein. Prior to incurring any such expenses, the Borrower shall provide written notice to NDEQ that it
intends to incur such expenses; provided, however, a failure by the Borrower to give such notice shall not
affect the Borrower's right to receive payment for such expenses. Upon request by NDEQ, the Borrower
shall provide copies of statements evidencing the fees and expenses for which the Borrower is requesting
payment.
Section 5.04. Application of Moneys. Any moneys collected by NDEQ pursuant to Section 5.02 or
5.03 hereof shall be applied (a) first, to pay interest on the Loan as the same becomes due and payable;
(b) second, to pay principal due and payable on the Loan; (c) third, to pay expenses owed by the Borrower
pursuant to Section 5.03 hereof; and (d) fourth, to pay any other amounts due and payable hereunder as
such amounts become due and payable. To the extent that NDEQ's right to receive Loan Repayments is on
a parity of lien basis with the lien of Existing Revenue Obligations or Additional Revenue Obligations on the
Borrower's System Revenues, such moneys shall be applied pro rata to all such obligations in accordance
19
with the respective outstanding principal amounts. Any acceleratio of am ounts owing to NDEQ under this
– Loan increase NDEQ`s pro rata share from such revenues but NDEQ may apply other — -
amounts available to it, including amounts described in Subsection 5.02(b). NDEQ shall not have any right to
receive application of amounts held in any debt service reserve account provided for the securing of any
such Existing Revenue Obligations or Additional Revenue Obligations.
Section 5.05. No Remedy Exclusive; Waiver; Notice. No remedy herein conferred upon or
reserved to the parties hereto is intended to be exclusive and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Loan Agreement or now or hereafter existing at
law or in equity. The parties hereto, in good faith, shall exercise such remedies with due diligence in a timely
manner, however, no delay or omission to exercise any right, remedy or. power accruing upon any Event of
Default shall impair any such right, remedy or power or shall be construed to be a waiver thereof, but any
such right, remedy or power may be exercised from time to time and as often as may be deemed expedient.
In order to entitle the parties hereto to exercise any remedy reserved to them in this Article, it shall not be
necessary to give any notice, other than such notice as may be required in this Article V.
Section 5.06. Retention of Rights. Notwithstanding any assignment or transfer of this Loan
Agreement pursuant to the provisions hereof, or anything else to the contrary contained herein, the parties
hereto shall have the right upon the occurrence of an Event of Default to take any action, including (without
limitation) bringing an action against the defaulting party at law or in equity, as such party may, in its
discretion, deem necessary to enforce the obligations of the defaulting party pursuant to this Loan
Agreement.
Article VI
MISCELLANEOUS
Section 6.01. Hold Harmless Agreement. The State of Nebraska and NDEQ, and the officers,
agents, and employees of each, shall have no responsibility or liability for the construction, operation and
maintenance of the Project.
Section 6.02. Waivers. Any waiver at any time of rights or duties under this Loan Agreement shall
not be deemed to be a waiver of any subsequent right or duty under this Loan Agreement.
Section 6.03. Amendments, Supplements and Modifications. Upon the assignment of the Note
to NIFA and thereafter, this Loan Agreement may not be amended, supplemented or modified without the
prior written consent of NIFA; provided, however, the consent of NIFA is not required to revise Attachment A,
Attachment B and Attachment C hereto pursuant to the provisions of this Loan Agreement. An executed
copy of any amendment to this Loan Agreement including revision of Attachments shall be immediately
provided to NIFA.
Section 6.04. Notices. All notices, certificates or other communications hereunder shall be
sufficiently given and shall be deemed given when hand delivered or mailed by registered or certified mail,
postage prepaid, to the Borrower, NDEQ, and NIFA at the following addresses:
If to Borrower: City of Blair
218 South 16 Street
Blair, Nebraska 68008
Attention: City Administrator
20
If to NDEQ: Department of Environmental Quality
- - - - - - Suite 400 - -
1200 N Street, The Atrium
Post Office Box 98922
Lincoln, NE 68509 -8922
If to NIFA: Nebraska Investment Finance Authority
200 Commerce Court
1230 O Street
Lincoln, NE 68508
All notices given by registered or certified mail as aforesaid shall be deemed duly given as of the
date they are so mailed. Any of the foregoing parties may designate any further or different addresses to
which subsequent notices, certificates or other communications shall be sent, by notice in writing given to the
others.
Section 6.05. Severability. In the event any provision of this Loan Agreement shall be held illegal,
invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate, render
unenforceable or otherwise affect any other provision hereof.
Section 6.06. Binding Effect. This Loan Agreement shall inure to the benefit of and shall be
binding upon NDEQ and the Borrower and their respective successors and assigns.
Section 6.07. Execution in Counterparts. This Loan Agreement maybe executed in several
counterparts, each of which shall be deemed to be an original and all of which shall constitute but one and
the same instrument.
Section 6.08. Governing Law and Regulations. This Loan Agreement shall be governed by and
construed in accordance with the laws of the State of Nebraska, including the Act and the Regulations, which
Regulations are, by this reference thereto, incorporated herein as a part of this Loan Agreement.
Section 6.09. Consents and Approvals. Whenever the written consent or approval of the State
shall be required under the provisions of this Loan Agreement, such consent or approval may only be given
by NDEQ.
Section 6.10. Further Assurances. The Borrower shall, at the request of NDEQ, authorize,
execute, acknowledge and deliver such further resolutions, conveyances, transfers, assurances, financing
statements and other instruments as may be necessary or desirable for better assuring, conveying, granting,
assigning and confirming the rights, security interests and agreements granted or intended to be granted by
this Loan Agreement.
Section 6.11. Notice to Trustee. Upon assignment of the Note to NIFA and thereafter, NDEQ shall
deliver a notice of the Loan in the form prescribed by NIFA, and other pertinent information relating thereto,
to the Trustee for any bonds of NIFA issued to fund deposits into the Loan Fund.
IN WITNESS THEREOF, the parties hereto have caused this Loan Agreement to be executed and delivered
as of the date set forth below.
21
CITY OF BLAIR, NEBRASKA
By
Title
Date 1 U ! 11
NEBRASKA DEPARTMENT OF
ENVI - NMENTAL QUALITY
By
Title Director
Date Z b 1 D
22
1
INDEX OF ATTACHMENTS
Exhibit 1 - Project Description
Attachment A - Loan Repayment Schedule
Attachment B - Project Costs and Projected Outlay Schedule
Attachment C - Financial Analysis
Attachment D - List of Federal Laws and Authorities
Attachment E - Municipality's Counsel's Opinion
Attachment F - Promissory Note
Attachment G - Certificate
Attachment H- Form of DEQ Request to the Trustee
Attachment I - Other Documents
23
-- - _ - EX-H-1-BIT-1
PROJECT DESCRIPTION
The DWSRF funding will finance the replacement of 65 blocks of existing water mains with new
upgraded water mains and appurtenances with associated administrative and legal fees plus engineering
design and inspection fees.
24
ATTACHMENT A
LOAN REPAYMENT SCHEDULE
Interest accruing before June 15, 2013, which is not reflected on the following amortization schedule
shall be billed and paid in accordance with NDEQ's procedures as in effect from time to time. Interest shall
accrue at the applicable rate (set forth in Section 2.03 of the Contract for Loan) as to the amount drawn and
outstanding from time to time during the payment period, with payments due on June 15 and December 15
of each year, commencing December 15, 2010. Amounts due will be billed 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 accruing on any principal amounts drawn after the billing date are to be paid as an addition to the
billing for the next interest payment period.
25
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ATTACHMENT B
PROJECT COSTS
Administrative and legal fees
A/E fees
Inspection fees
Contingencies
TOTAL
PROJECT FUNDING
DWSRF Base Loan
$19,000
70,400
200,000
132,000
$2,341,400
$2,341,400
PROJECTED OUTLAY SCHEDULE
April 2011
May 2011
June 2011
July 2011
August 2011
April 2012
May 2012
June 2012
July 2012
August 2012
September 2012
October 2012
November 2012
April 2013
May 2013
June 2013
July 2013
August 2013
September 2013
October 2013
November 2013
TOTAL
$20,000
50,000
75,000
75,000
50,000
200,000
240,000
265,000
290,000
200,000
250,000
120,000
50,000
100,000
100,000
100,000
50,000
50,000
25,000
25,000
6,400
$2,341,400
26
ATTACHMENT C
FINANCIAL CAPABILITY ANALYSIS
BLAIR, NEBRASKA
DWSRF Project No. D311530
Blair has requested DWSRF loan assistance of $2,341,400 with a 30 year term to finance installation
of new replacement water mains for their public water supply distribution system.
An abbreviated financial analysis is presented. The documents reviewed and used to complete this
analysis are:
1. Audit reports of the City of Blair, for the years 2007, 2008, and 2009.
2. Water/Wastewater Preapplication for Federal /State Assistance
3. Miscellaneous correspondence from Blair in project file.
Table 1
Blair Water System Financial Summary
Fiscal Year
Operating
Operating
Operating
Debt Service
Debt
ending 9/30
Income (plus
Expense (less
Ratio
Coverage
interest)
depreciation)
Ratio
2007
$4,007,952
$2,299,633
1.74
$582,944
2.93
2008
$4,476,530
$2,383,808
1.88
$2,089,144
1.02
2009
$5
$2,806,973
1.95
$2
1.31
Range for Weaker Communities
Below 1.00'
- --
Below 1.00
Range for Mid -Range Communities
1.00 to 1.44
- --
1.00 and
Above'
Range for Stronger Communities
Above 1.44
- --
NA
Comparative Rating for Blair
Stronger
Mid -Range
' Based on industry benchmarks.
2 Middle 50 percent of values for Nebraska Communities.
3 Upper 25 percent of values for Nebraska Communities.
In addition, Blair as of September 30, 2009 has $6,005,000 principal in General Obligation Debt with
interest of $2,050,280 totaling $8,055,280 of outstanding debt (see Table 2) as reported on the City of
Blair Financial Statements and Independent Auditor's Report for the year ending September 30, 2009. In
addition Blair has Water and Sewer Bonds Payable is shown in Table 4.
27
Table 2
- - General an
Dated
Description
Interest Rate
Balance
9/30/08
Deletions
Balance
9/30/09
4/1511999
Various Purpose
3.5% - 4.40%
$190,000
$(190,000)
$0
12/15/2002
Various Purpose
1.60% - 4.25%
$545
(1 ),_
$ 80,000
$420,000
7/19/2005
Various Purpose
2.90% - 4.25%
$800,000
$ 720,000
6/15/2006
Various Purpose
3.70% - 4.35%
$565,000
$ 60,000
$505,000
9/28/2007
Various Purpose
3.70% - 5.00%
$2,680,000
$(125,000)
$2,555,000
12/14/2007
Tax increment
financing bond
4.48%
$1,140,000
$0
$1,140,000
2/26/2008
Public Safety Tax
Anticipation
Bonds
2.75% - 4.25%
$700,000
$(35,000)
$665,000
Total
12/15/2004
Revenue Bonds
$6,620,000
$(615,000)
$6,005,000.00
Table 3
Annual debt service requirements for G.O., TIF, Anticipation Bonds Debt
Year ending Sept. 30
Principal
Interest
Total
2010
$490,000
$253,140
$743,140
2011
$520,000
$234,315
$754,315
2012
$550,000
$213,845
$763,845
2013
$430,000
$191,680
$621,680
2014
$395,000
$174,666
$569,666
2015-2019
$1,740,000
$634,164
$2,374,164
2020— 2024
$1,335,000
$293,220
$1,628,220
2025— 2029
$545,000
$55,L50
$600
Total
$6,005,000
$2,050,280
$8,055,280
Table 4
Revenue Bonds Payable as of September 30, 2009
Dated
Description
Interest Rate
Balance
9 /30 /08
Deletions
Balance
9/30/09
Water Debt
6/15/2000
Refunding
Bonds
4.70% - 5.55%
$820,000
$(130,000)
$690,000
4/29/2002
NDEQ DWSRF
Loan D31
3.03%+1.0%
$5,294,237
$(638,840)
$4,655,397
6/1/2006
NRD Bonds
4.15 % -4.75%
$2,211,972
$(315,996)
$1,895,976
4/24/2007
WA BANS
Series 2007
4.5%
$6,500,000
0
$6,500,000
8/15/2007
WA BANS
Series 2007B
4.65%
$8,000,000
0
$8,000,000
Sewer Debt
12/15/2004
Revenue Bonds
2.05% - 4.25%
$745,000
$ 60,000
$685,000
6/26/2007
SE BANS
Series 2007
4.05%
1,455,000
0
$1,455,000
W:3
Table - 5
Annual Debt Service Requirements for Water Debt:
Year ending September 30
Principal
Interest
2010
$1,109,330
$921,259
2011
$1,134,438
$880,956
2012
$15,670,151
$837,357
2013
$1,196,495
$130,101
2014
$1,158,492
$85,630
2015 -2016
$1.472,458
$49,278
Total
$21,741.,373
$2,904,581
Table 6
Annual Debt Service Requirements for Sewer Debt:
Year ending September 30
Principal
Interest
2010
$60,000
$84,065
2011
$1,520,000
$52,614
2012
$60,000
$21,028
2013
$65,000
$18,791
2014
$65,000
$16,370
2015 -2019
M 00
115,
Total
$2,140,000
$231,346
Analvsis of the Water Utility
The City of Blair manages their water utility. The water utility ran operating surpluses for the years
2007 through 2009 as shown in Table 1. A metered rate structure has been established by the City
Council consisting of $8.40 meter charge (5/8 ") plus $0.981 for the first 748 gallons and $1.00 for each
748 gallons overage per monthly water quantity used. The current rate structure translates to $19.19 per
month for a typical household water use of 8,220 gallon per month. Blair has approximately 3,073
combined residential and commercial connections to their public water system. A projected rate
increase of $3.93 per month will be needed to fund the DWSRF debt service which includes a 10%
coverage factor. The actual water bills will be determined on actual monthly water use of each
connection and meter size, water bills will vary accordingly.
The City of Blair has an existing DWSRF loan No. D311007 from 2002 for an original principal
amount of $6,815,700 having a 14 year term at 3.03% + 1.0% administrative fee. The current year
annual payment is shown in Table 7.
Table 7
Existing DWSRF Loan No. D311007
Loan Term (years)
Interest Rate
Current Year 2010
First Year Payment +
Payment
10% Coverage
14
3.03% +1.0% admin
$836,081
$919,689
fee on outstanding
p rincipal balance
The proposed loan D311530 for $2,341,400 in principal has a repayment amount for the first year as
shown in Table 8.
29
I
Table 8
- __ Proposed DW N - D31 - 1 - Principal - of - $2,341,,400
Loan Term (years)
Interest Rate
First Year Payment
First Year Payment +
0
SFY2009
Highway Allocations
10% Coverage
30
2.3% + 1.0% admin
$131,753
$144,928
fee on outstanding
Existing DWSRF Loan
#D311007 P &I
$794,452
rinci al balance
$108,474
Total
Funds Available for State Intercept
The annual principal and interest payments for a 30 -year DWSRF loan of $2,341,400 are $108,474.
Interest and principal repayments of SRF loans are protected by intercept statutes, which allow the
Department to recover delinquent loan payments by intercepting state funds that are paid to the City of
Blair. State funds that are available for interception are:
State Aid to Cities
$66,228
SFY2009
MIRF payments
0
SFY2009
Highway Allocations
15Z6
SFY2008
TOTAL
$643,100
Existing DWSRF Loan
#D311007 P &I
$794,452
Proposed DWSRF Loan
#D311530 P &I
$108,474
Total
$902,926
State intercept total is 71 % of the combined annual DWSRF loan payments
ME
ATTACHMENT D
-- ---- LISr - OF -- CROSS GUTTIN AUTHORITIES UNDER'THEA - -
Environmental Authorities
- Archeological and Historic Preservation Act, Pub. L. 93 -291, as amended
- Clean Air Act, Pub. L. 95 -95, as amended
- Clean Water Act, Title III, IV and V, Pub. L. 92 -500, as amended
- Coastal Barrier Resources Act, Pub. L. 97 -348
- Coastal Zone Management Act, Pub. L. 92 -583, as amended
- Endangered Species Act, Pub. L. 93 -205, as amended
- Environmental Justice, Executive Order 12898
- Floodplain Management, Executive Order 11988, as amended by Executive Order 12148
- Protection of Wetlands, Executive Order 11990, as amended by Executive Order 12608- Farmland Protection Policy
Act, Pub. L. 97 -98
- Fish and Wildlife Coordination Act, Pub. L. 85 -624, as amended
- Magnunson- Stevens Fishery Conservation and Management Act, Pub. L. 94 -265
- National Historic Preservation Act, Pub. L. 89 -665, as amended
- Safe Drinking Water Act, Pub. L. 92 -523, as amended
- Wild and Scenic Rivers Act, Pub. L. 90 -542, as amended
Economic and Miscellaneous Authorities
- Debarment and Suspension, Executive Order 12549 — Demonstration Cities and Metropolitan Development Act,
Pub. L. 89 -754, as amended, and Executive Order 12372
- Drug -Free Workplace Act, Pub. L. 100 -690
- New Restrictions on Lobbying, Section 319 of Pub. L. 101 -121
- Prohibitions relating to violations of the Clean Water Act or Clean Air Act with respect to Federal contracts, grants, or
loans under Section 306 of the Clean Air Act and Section 508 of the Clean Water Act, and Executive Order 11738 -
Uniform Relocation and Real Property Acquisition Policies Act, Pub. L. 91 -646, as amended
Civil Rights Nondiscrimination Equal Employment Opportunity Authorities:
- Age Discrimination Act, Pub. L. 94 -135
- Equal Employment Opportunity, Executive Order 11246
- Section 13 of the Clean Water Act, Pub. L. 92 -500
- Section 504 of the Rehabilitation Act, Pub, L. 93 -112, supplemented by Executive Orders 11914 and 11250
- Title VI of the Civil Rights Act, Pub. L. 88 -352
Disadvantaged Business Enterprise Authorities:
- Participation by Disadvantaged Business Enterprises in Procurement Under EPA Financial Assistance Agreements
31
I R ®L.. M LLP
ATTORNEYS AT LAW
August 12, 2010
Nebraska Investment Finance Authority
200 Commerce Court
1230 "O" Street
Lincoln, Nebraska 68508
Attention: Executive Director
Nebraska Department of Environmental Quality
Suite 400
1200 N Street, The Atrium
P.O. Box 98922
Lincoln, Nebraska 68509 -8922
Attention: Water Quality Division
Wells Fargo Bank Iowa, N.A.
Corporate and Municipal Trust Group
666 Walnut Street MAC N8200 -034
Des Moines, IA 50309
Ladies and Gentlemen:
1500 Woodmen Tower
1700 Famam St
Omaha, NE 68102 -2068
Tel: 402.344.0500
Fax: 4 02.344 .05 88
ww airdholm com
We have acted as Bond Counsel in connection with the execution and delivery by the
City of Blair, Nebraska, a city of the first class of the State of Nebraska (the "Municipality ") of a Loan
Agreement dated as of August 12, 2010 (the "Loan Agreement ") between the Municipality and the
Nebraska Department of Environmental Quality ( "NDEQ ") and the issuance of a promissory note dated
the date hereof (the "Note ") by the Municipality to NDEQ. All terms used in this opinion letter and not
defined shall have the meanings given to them in the Loan Agreement.
In this connection, we have examined the following:
(a) certified copies of the proceedings of the Mayor and Council of the
Municipality showing the passage and approval of Ordinance No. 2187 on June 8, 2010
authorizing the Note and the Loan Agreement (the "Ordinance "), as certified by the City
Clerk of the Municipality;
(b) an executed counterpart of the Loan Agreement;
(c) the executed Note; and
(d) such other documents as we deemed relevant and necessary in
rendering this opinion.
Nebraska Investment Finance Authority
Wells Fargo Bank Iowa, N.A.
Nebraska Department of Environmental Quality
August 12, 2
Page 2
As to questions of fact material to our opinion, we have relied upon the covenants and
representations set forth in the Loan Agreement, the certified proceedings and other certifications of
public officials furnished to us without undertaking to verify the same by independent investigation.
Based upon the foregoing, we are of the opinion that:
1. The Municipality is a city of the first class duly organized and validly existing
under the laws of the State of Nebraska.
2. The Municipality is a governmental unit, as such term is used in Section
141(b)(6) of the Internal Revenue Code of 1986, as amended.
3. The Municipality has the power and authority to enter into the Loan Agreement,
to issue the Note, to borrow the entire principal amount provided for in Section 2.01 of the Loan
Agreement (the "Loan Amount ") and to perform its obligations under the Loan Agreement and the Note.
4. The Loan Agreement and the Note have been duly authorized, executed and
delivered by the Municipality and are, and would be if the entire Loan Amount were advanced to the
Municipality pursuant to the Loan Agreement on the date of this opinion, valid and legally binding special
obligations of the Municipality, payable solely from the sources provided therefor in the Loan Agreement
and the Ordinance, 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 Sections 18 -1803 to 18 -1805, R.R.S. Neb. 2007, the Ordinance and
the Loan Agreement, which the Ordinance authorizes and incorporates by reference, create a valid lien
on the revenues, pledged by the Municipality pursuant to Section 3.02 of the Loan Agreement for the
security of the Loan Agreement and the Note and no other debt of the Municipality is secured by a
superior lien on such revenues.
6. The Municipality has obtained or made all approvals, authorizations, consents or
other actions of, and filings, registrations or qualifications with, the Municipality or any other government
authority which are legally required, as of the date hereof, to allow the Municipality to enter into and
perform its obligations under the Loan Agreement and the Note and borrow the full Loan Amount
pursuant to the Loan Agreement and the Note.
7. It is to be understood that the rights of the holder of the Note and the Loan
Agreement and the priorities and enforceability thereof may be subject to bankruptcy, insolvency,
reorganization, moratorium, extension, compromise and other similar laws affecting creditors' rights
heretofore or hereafter enacted to the extent constitutionally applicable and that their priorities and
enforcement may also be subject to the exercise of judicial discretion in appropriate cases.
Very truly yours,
BAIRD HOLM LLP
lJRJP /sin By:
r eery
.:.�� Ir
ATTACHMENT F AUG1 � 6 i'lf t)
PROMISSORY NOTE OF CITY OF BLAIR, NEBRASKA Nebraska Dept of Environmental Quality
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 $2,341,400, to the extent disbursed and subject
to repayment pursuant to Section 2.01 and Section 2.04 of the Loan Agreement dated as of August 12, 2010
( "the Loan Agreement "), with interest on such amount until paid, as provided in Section 2.03 of the Loan
Agreement between NDEQ and the Borrower. In addition, the Borrower shall pay an Administrative Fee on
the outstanding principal amount of this Note at the rate of 1.0% per annum as provided in the Loan
Agreement. 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 principal corporate trust office of Wells Cargo
Bank Iowa, N.A. in Des Moines, Iowa, or such other place as NDEQ may designate in writing.
This Note is issued pursuant to and is secured by the Loan Agreement and Ordinance No. 2187 of
the City of Blair, 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 Reverwes (as defined
in the Loan Agreement) on a parity with water system revenue bonds issued pursuant to Ordinances Nos,
1907, 1909 and 2065 of the City of Blair and shall not be payable out of any other revenues of the Borrower.
The obligations of the Borrower under this Note shall not be a debt of the Borrower within the meaning of any
constitutional or statutory limitation on the creation of general obligation indebtedness nor 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, 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 di shorior
34
This Note and all instruments securing the same are to be construed according to the laws of the
State . of.,N,.ebr skq.., Signed and sealed this 12th day of August, 2010.
CITY OF BLAIR, NEBRASKA
B
f
Attest i�. {VVi;,,i Title
Pursuant to the Pledge. Agreement dated -as of June 26, 2000 as amended (the "Pledge
Agreement "), by and between NDEQ and the Nebraska Investment Finance Authority ( "NIFA "), and the
Master Trust Indenture dated as of June 26, 2000, as supplemented and amended, by and between NIFA
and Wells Fargo Bank Iowa, N.A., as trustee, NDEQ hereby assigns, grants and conveys any and all of
NDEQ's rights, title and interest in this Note to NIFA, except as provided in the Pledge Agreement, and NIFA
hereby assigns such rights, title and interest to the Trustee and any successor Trustee.
NEBRASKA DEPARTMENT OF
ENV ENTAL QUALIT
By ._
Title l� `� cA -z e
Date h —u - 2 , -6
NEBRASKA INVESTMENT FINANCE
AUTHORITY
low
Title
Attest Date
35
ATTACHMENT G
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The following certifications are made in connection with the Loan Agreement, dated as of August 12,
2010, (the "Loan Agreement") between the Nebraska Department of Environmental Quality ( "NDEQ ") and
the City of Blair, Nebraska (the "Borrower ") for the purpose of establishing compliance by the Borrower with
requirements for the maintenance of the tax exemption of interest on the Nebraska Investment Finance
Authority Drinking Water State Revolving Fund Revenue Bonds, Series 2002A, (the "Bond(s) ") and such
additional series of bonds as may be from time to time issued by the Nebraska Investment Finance Authority
( "NIFA ") to provide funds for deposit in the Loan Fund (as defined in the Loan Agreement).
WHEREFORE, the undersigned hereby certifies on behalf of the Borrower to NDEQ, NIFA and
Wells Fargo Bank Iowa, N.A. as trustee for the Bonds, as follows:
1. The undersigned is authorized to make the following certifications on behalf of the Borrower.
2. The Borrower represents that it reasonably expects that the design and construction of the
Project, as defined in the Loan Agreement, will commence within six months from the execution of the Loan
Agreement and that the design and construction of the Project will proceed with due diligence thereafter to
completion.
3. The proceeds of the loan pursuant to the Loan Agreement will be used to construct a facility
that will be owned and operated by the Borrower. There will be no contracts for the use of the facility other
than contracts on a rate scale basis. Specifically, the Borrower represents that there will be no contracts for
use of the Project that will require a non - governmental unit to make payments to the Borrower without regard
to actual use of the Project. None of the improvements being financed relate to those portions of the City's
Public Water System which serves Cargill, Inc.
Dated this 12th day of August, 2010.
CITY OF BLAIR, NEBRASKA
By
Title
36
J
ATTACHMENT H
FORM OF NDEQ REQUEST TO THE TRUSTEE
August , 2010
Wells Fargo Bank Iowa, N.A. X_ Initial Allocation
Corporate and Municipal Trust Group Amendment
666 Walnut Street MAC N8200 -034 Final Allocation
Des Moines, IA 50309
Pursuant to Section 4.03 of the Master Trust Indenture dated as of June 1, 2000 (the "Indenture ") by
and between the Nebraska Investment Finance Authority and Wells Fargo Bank Iowa, N.A., as trustee (the
"Trustee "), the Nebraska Department of Environmental Quality hereby notifies the Trustee of the following
Loan (capitalized terms used herein shall have the meanings set forth in the Indenture):
NAME OF MUNICIPALITY: BLAIR, NEBRASKA
PROJECT NO. D311530
LOAN AMOUNT: $2,341,400
UNPLEDGED LOAN ACCOUNT
$
State Appropriations $
% OF LOAN
2009 ARRA Loan
$
Bond Proceeds Sub- $
% of Loan
2009 ARRA Principal Forgiveness
$
Series 20 Bond $
% of Loan
2009 Cap Grant Portion
2009 Cash Match
Loan Forgiveness Sub - account
% of Loan
Non - Governmental Loan Sub - account
GENERAL PORTION (GP)*
$2,341,400
100% OF LOAN
General Loan Sub - account $2,341,400
100% of GP
100% of Loan
Recycled Bond Proceeds $
_% of GP
% of Loan
Sub - account (Series 20_)
Loan Interest Sub - account $
_% of GP
% of Loan
Investment Interest $
_% of GP
% of Loan
Sub - account
STATE MATCH PORTION (SMP) $
% of LOAN
State Appropriations $
% of SMP % of Loan
Sub - account
Bond Proceeds Sub- $
% of SMP % of Loan
account
Series 20 Bond $
% of SMP % of Loan
Proceeds
37
I
Name of Municipality: Blair, Nebraska
— - -- - Project Number - 1331 - 1 - 530 - --
LEVERAGED PORTION (LP): $ % OF LOAN
Bond Proceeds
(Leveraged Proceeds
Sub - account): $ % of LP % of Loan
*See Section of the Indenture for instructions regarding the General Portion.
* *In the event that interest earning on proceeds of any Series of Bonds are deposited into the Unrestricted
Loan Sub - account, the portion of the Loan derived from such proceeds of a Series of Bonds shall be
separately set forth herein.
[NOTE: Any one or two of the General Portion, State Match Portion and Leveraged Portion may be
0% so long as the total equals 100% and provided that whenever the General Portion is to be derived from
the federal Letter of Credit such portion will be sized according to federal requirements.]
The project outlay schedule and projected loan repayment schedule are attached hereto. [Attach
Attachment A to Loan Contract.] Pursuant to the Indenture, disbursements from and deposits into the
Trustee -Held Funds and Accounts (as defined in the Indenture) with respect to the above - referenced Loan
shall be made in accordance with the General Portion, State Match Portion and Leveraged Portion described
above and from the Accounts and sub - accounts specified, except as otherwise directed in writing by
Nebraska Department of Environmental Quality.
IN WITNESS WHEREOF, I have hereunto set my hand this day of August, 2010.
NEBRASKA DEPARTMENT OF
ENVIRONMENTAL QUALITY
B y
[Authorized Signatory]
cc: NDEQ Fiscal Section
38
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ATTACHMENT F AU(3 '1 (
PROMISSORY NOTE OF CITY OF BLAIR, NEBRASKA Nebraska Dept of Environmental QUaiity
By ,.._.__ _C)i Ct# I
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 $2,341,400, to the extent disbursed and subject
to repayment pursuant to Section 2.01 and Section 2.04 of the Loan Agreement dated as of August 12, 2010
( "the Loan Agreement "), with interest on such amount until paid, as provided in Section 2.03 of the Loan
Agreement between NDEQ and the Borrower. In addition, the Borrower shall pay an Administrative Fee on
the outstanding principal amount of this Note at the rate of 1.0 /o per annum as provided in the Loan
Agreement. 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 principal corporate trust office of Wells Fargo
Bank Iowa, N.A. in Des Moines, Iowa, or such other place as NDEQ may designate in writing.
This Note is issued pursuant to and is secured by the Loan Agreement and Ordinance No. 2187 of
the City of Blair, 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 water system revenue bonds issued pursuant to Ordinances Nos.
1907, 1909 and 2065 of the City of Blair and shall not be payable out of any other revenues of the Borrower.
The obligations of the Borrower under this Note shall not be a debt of the Borrower within the meaning of any
constitutional or statutory limitation on the creation of general obligation indebtedness nor 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, 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.
34
This Note and all instruments securing the same are to be construed according to the laws of the
State of..,N,ebr8• ka.. Signed and sealed this 12th day of August, 2010.
CITY OF BLAIR, NEBRASKA
Y
i t G I1 J t' jf" i !'i
Attest Title �, �f�� / ��� �,;',,.,.; ,,�. �':,c_„ c.v�
Pursuant to the Pledge. Agreement dated as of June 26, 2000 as amended (the "Pledge
Agreement "), by and between NDEQ and the Nebraska Investment Finance Authority ( "NIFA "), and the
Master Trust Indenture dated as of June 26, 2000, as supplemented and amended, by and between NIFA
and Wells Fargo Bank Iowa, N.A., as trustee, NDEQ hereby assigns, grants and conveys any and all of
NDEQ`s rights, title and interest in this Note to NIFA, except as provided in the Pledge Agreement, and NIFA
hereby assigns such rights, title and interest to the Trustee and any successor Trustee.
NEBRASKA DEPARTMENT OF
ENV ENTAL QUALIT
g
Y
1 - A
Title cA -z e
Date
NEBRASKA INVESTMENT FINANCE
AUTHORITY
Title
Attest Date
35