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HomeMy WebLinkAbout08-193 revREVISED MAY 27, 2008 08 -193 RESOLUTION (CARRIED 7 -0 LOST LAID OVER WITHDRAWN ) A RESOLUTION providing for the issuance and sale of $4,410,000 aggregate principal amount of Water Revenue Bond Anticipation Notes, Series 2008 -C, of the City of Oshkosh, Winnebago County, Wisconsin, providing for the payment of said notes and other details and covenants with respect thereto and confirming the sale thereof. WHEREAS, the City of Oshkosh, Winnebago County, Wisconsin (the "City') now owns and operates a municipal waterworks system (the "System'); and WHEREAS, it has been determined previously that additions and improvements to said waterworks system are necessary, including construction and improvement of a water treatment plant, water storage facilities, pump stations and general system improvements, together with necessary appurtenances and improvements in connection therewith; and WHEREAS, under the provisions of Chapter 66 of the Wisconsin Statutes, as supplemented and amended (the "Statute'), any municipality (as therein defined) may, by action of its governing body, provide for constructing, extending, adding to and improving a public utility from the proceeds of obligations payable from the income and revenues derived from the operation of said utility and secured by a mortgage lien upon such utility; and WHEREAS, the City has heretofore issued $3,945,000 aggregate principal amount of Water Revenue Bonds, Series 1992, dated May 1, 1992, which bonds are now no longer outstanding (the "Series 1992 Bonds'); and WHEREAS, Resolution Number 92 -195 duly adopted by the City Council of the City on April 16, 1992, authorizing the issuance of the Series 1992 Bonds, by Section 16 thereof, authorizes the issuance of additional bonds on a parity with said Series 1992 Bonds upon compliance with certain conditions set out in said Section 16; and WHEREAS, the City has heretofore issued $3,960,000 Refunding Water Revenue Bonds, Series 1996, dated January 1, 1996, which bonds are no longer outstanding (the "Series 1996 Bonds'), which Series 1996 Bonds were issued on a parity with the Series 1992 Bonds; and WHEREAS, Resolution Number 95 -444 duly adopted by the City Council of the City on December 19, 1995, authorizing the issuance of the Series 1996 Bonds, by Section 10 thereof, authorizes the issuance of additional bonds on a parity with the Series 1992 Bonds and the Series 1996 Bonds upon compliance with certain conditions set out in said Section 10; and WHEREAS, the City has heretofore issued $12,020,000 aggregate principal amount of Water Revenue Bonds, Series 2001 -C, dated March 1, 2001, which bonds are no longer outstanding (the "Series 2001 -C Bonds'), which Series 2001 -C Bonds were issued on a parity with the Series 1992 Bonds and the Series 1996 Bonds; and WHEREAS, Resolution Number 01 -076 duly adopted by the City Council of the City on February 13, 2001, authorizing the issuance of the Series 2001 -C Bonds, by Section 10 thereof, authorizes the issuance of additional bonds on a parity with the Series 1992 Bonds, the Series 1996 Bonds and the Series 2001 -C Bonds upon compliance with certain conditions set out in said Section 10; and WHEREAS, the City has heretofore issued $3,030,000 aggregate principal amount of Water Revenue Bonds, Series 2001 -D, dated December 1, 2001, which bonds are no longer outstanding (the "Series 2001 -D Bonds'), which Series 2001 -D Bonds were issued on a parity with the Series 1992 Bonds, the Series 1996 Bonds and the Series 2001 -C Bonds; and WHEREAS, Resolution Number 01 -455 duly adopted by the City Council of the City on November 27, 2001, authorizing the issuance of the Series 2001 -D Bonds, by Section 10 thereof, authorizes the issuance of additional bonds on a parity with the Series 1992 Bonds, the Series 1996 Bonds, the Series 2001 -C Bonds and the Series 2001 -D Bonds upon compliance with certain conditions set out in said Section 10; and WHEREAS, the City has heretofore issued $2,065,000 aggregate principal amount of Water Refunding Revenue Bonds, Series 2003 -G, dated December 15, 2003, which bonds are now outstanding in the aggregate principal amount of $895,000 (the "Series 2003 -G Bonds'), which Series 2003 -G Bonds were issued on a parity with the Series 1992 Bonds, the Series 1996 Bonds, the Series 2001 -C Bonds and the Series 2001 -D Bonds; and WHEREAS, Resolution Number 03 -420 duly adopted by the City Council of the City on October 14, 2003, authorizing the issuance of the Series 2003 -G Bonds, by Section 10 thereof, authorizes the issuance of additional bonds on a parity with the Series 1992 Bonds, the Series 1996 Bonds, the Series 2001 -C Bonds, the Series 2001 -D Bonds and the Series 2003 -G Bonds upon compliance with certain conditions set out in said Section 10; and WHEREAS, the City has heretofore issued $12,705,000 aggregate principal amount of Water Refunding Revenue Bonds, Series 2006 -E, dated December 15, 2006, which bonds are now outstanding in the aggregate principal amount of $12,330,000 (the "Series 2006 -E Bonds'), which Series 2006 -E Bonds were issued on a parity with the Series 1992 Bonds, the Series 1996 Bonds, the Series 2001 -C Bonds, the Series 2001 -D Bonds and the Series 2003 -G Bonds; and WHEREAS, Resolution Number 06 -366 duly adopted by the City Council of the City on December 12, 2006, authorizing the issuance of the Series 2006 -E Bonds, by Section 10 thereof, authorizes the issuance of additional bonds on a parity with the Series 1992 Bonds, the Series 1996 Bonds, the Series 2001 -C Bonds, the Series 2001 -D Bonds, the Series 2003 -G Bonds and the Series 2003 -G Bonds upon compliance with certain conditions set out in said Section 10; and WHEREAS, no other bonds or obligations are outstanding payable on a parity or with a senior lien from the revenues of said municipal waterworks system; and WHEREAS, the construction, extension, addition and improvement of the Project are to commence, and it is therefore considered necessary and desirable to provide interim construction financing by the issuance from time to time of bond anticipation notes rather than revenue bonds, the City Finance Director of the City having determined that contracts with respect to the Project are to be let and the proceeds of the proposed bond anticipation notes are required for the payment thereof; and WHEREAS, Section 66.0621, Wisconsin Statutes, as supplemented and amended, further authorizes the governing body of any city, prior to the issuance of revenue bonds and in anticipation of their sales, to authorize the issuance of bond anticipation notes for the same purposes for which said city has authority to issue revenue bonds; and WHEREAS, it is now necessary and desirable to issue bond anticipation notes for the purpose of constructing, extending, adding to and improving the System, and to pledge to the payment of the interest thereon the revenues of the System, and to additionally pledge to the payment of the principal of and interest on said bond anticipation notes the proceeds of the sale of said revenue bonds; and WHEREAS, all conditions required for the issuance of bond anticipation notes have been complied with or will have been complied with prior to the issuance of the bond anticipation notes herein authorized; and WHEREAS, for the purpose of constructing, extending, adding to and improving the System, it is now considered desirable to authorize and sell the Water Revenue Bond Anticipation Notes, Series 2008 -C of the City (the "Notes'), to pledge to the payment of the interest thereon the revenues of the System, and to additionally pledge to the payment of the principal of and interest on said bond anticipation notes the proceeds of the sale of said revenue bonds; and WHEREAS, bids were solicited and received for the purchase of the Notes; and WHEREAS, the bid of JP Morgan Chase Bank, N.A., of Milwaukee, Wisconsin, at a price of $4,410,000, plus accrued interest, if any, to the date of delivery, was the best bid submitted; and Now, THEREFORE, BE IT RESOLVED by the City Council of the City of Oshkosh, Winnebago County, Wisconsin, as follows: Section 1. Definitions. The following terms shall have the following meanings in this Resolution unless the text expressly or by necessary implication requires otherwise: "City" shall mean the City of Oshkosh, Winnebago County, Wisconsin, and any successor to the duties or functions of the City; "Current Expenses" shall mean the reasonable and necessary cost of operating, maintaining, administering and repairing the System, including water at wholesale, salaries, wages, cost of materials and supplies, insurance and audits, but shall exclude depreciation, debt service, tax equivalents, replacements and capital expenditures; "Fiscal Year" shall mean the twelve (12) month period beginning on January I of each year and ending on December 31 of the same year; "Governing Body" shall mean the City Council of the City, or such other body as may hereafter be the chief legislative body of the City; "Net Revenues" shall mean gross earnings of the System after deduction of Current Expenses; "1992 Resolution" shall mean the resolution duly adopted by the City Council of the City on April 16, 1992, authorizing the issuance of the Series 1992 Bonds and bonds ranking on a parity therewith, as supplemented and amended from time to time; "Note" or "Notes" shall mean one or more of the $4,410,000 aggregate principal amount of Water Revenue Bond Anticipation Notes, Series 2008 -C, of the City, dated the date of the issuance thereof, authorized to be issued by this Resolution; "Note Register" shall mean the books of the City kept by the Registrar to evidence the registration and transfer of the Notes; "Original Purchaser" shall mean the purchaser of the Notes from the City, as set out in Section 14 of this Resolution; "Outstanding Bonds" shall mean the Series 2003 -G Bonds and the Series 2006 -E Bonds; "Parity Bonds" shall mean bonds payable from the revenues of the System, other than the Outstanding Bonds, issued on a parity and equality with the Outstanding Bonds, pursuant to the restrictive provisions of Section 16 of the 1992 resolution; "Registrar" shall mean U.S. Bank National Association of Milwaukee, Wisconsin, or a successor designated as Registrar under this Resolution; "Resolution" shall mean this Resolution as adopted by the Governing Body of the City; "Series 1992 Bonds" shall mean the Water Revenue Bonds, Series 1992, of the City, dated May 1, 1992, which are no longer outstanding; "Series 2003 -G Bonds" shall mean the outstanding Water Revenue Refunding Bonds, Series 2003 -G, of the City, dated November 1, 2003; "Series 2006 -E Bonds" shall mean the outstanding Water Revenue Refunding Bonds, Series 2006 -E of the City, dated December 15, 2006; "Statute" means Chapter 66 of the Wisconsin Statutes, as supplemented and amended; and "System" shall mean the entire waterworks system of the City, including all waterworks property of every nature now or hereafter owned by the City, including all improvements and extensions thereto made by the City while any of the Outstanding Bonds and Parity Bonds remain outstanding, including all real and personal property of every nature comprising part of or used or useful in connection with such waterworks system and including all appurtenances, contracts, leases, franchises and other intangibles. Section 2. Declaration of Intent. It is hereby declared to be the intention of the Governing Body of the City to hereafter authorize the issuance of not less than $4,410,000 aggregate principal amount of water revenue bonds, pursuant to the Statute, for the purpose of constructing, extending, adding to and improving the System as more fully in the preamble heretofore set out, including the retirement of the Notes herein authorized. Section 3. Authorization, Purpose and Terms of Notes. For the purpose of paying the cost of constructing, extending, adding to and improving the System as provided in the preambles hereto, and in anticipation of the issuance of water revenue bonds of the City in an aggregate principal amount of not less than $4,410,000 to be issued under the Statute, subject and subordinate to the lien on the Revenues in favor of the Outstanding Bonds, there shall be issued the Notes of the City in the aggregate principal amount of $4,410,000. The Notes shall be designated "Water Revenue Bond Anticipation Notes, Series 2008 -C "; as originally issued shall be dated the date of their issuance, and shall also bear the date of their authentication by the Registrar; shall be of $5,000 denomination each or any integral multiple thereof (but no single Note shall represent installments of principal maturing on more than one date); and shall be lettered R and numbered consecutively starting with the number one. The Notes shall mature on July I, 2009, and shall bear interest at a rate not to exceed three and eighty one - hundredths percent (3.80 %) per annum. Section 4. Interest; Payment Provisions. The Notes shall bear interest from their date or from the most recent interest payment date to which interest has been paid or duly provided for, at the rate set out above, such interest (computed upon the basis of a 360 -day year of twelve 30- day months) being payable on the first days of January and July of each year, commencing on January 1, 2009. Interest on each Note shall be paid by check or draft of the Registrar to the person in whose name such Note is registered at the close of business on the fifteenth day of the calendar month next preceding the applicable interest payment date. The principal of each Note shall be payable in lawful money of the United States of America upon presentation and surrender of such Note at the principal office of the Registrar in Milwaukee, Wisconsin. Section 5. Execution, Authentication. The Notes shall be executed on behalf of the City with the manual or facsimile signature of the City Manager or the Acting City Manager of the City and with the manual or facsimile signature of the City Clerk of the City, and sealed with the official seal of the City or a printed facsimile thereof. In case any officer whose signature shall appear on any Note shall cease to be such officer before the delivery of such Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. All Notes shall have thereon a certificate of authentication substantially in the form hereinafter set forth duly executed by the Registrar as authenticating agent of the City and showing the date of authentication. No Note shall be valid or obligatory for any purpose or be entitled to any security or benefit under this Resolution unless and until such certificate of authentication shall have been duly executed by the Registrar by manual signature, and such certificate of authentication upon any such Note shall be conclusive evidence that such Note has been authenticated and delivered under this Resolution. The certificate of authentication on any Note shall be deemed to have been executed by the Registrar if signed by an authorized officer of the Registrar, but it shall not be necessary that the same officer sign the certificate of authentication on all of the Notes issued under this Resolution. Section 6. Registration of Notes, Persons Treated as Owners. The City shall cause books (the "Note Register) for the registration and for the transfer of the Notes as provided in this Resolution to be kept at the principal corporate trust office of the Registrar, which is hereby constituted and appointed the registrar of the City with respect to the Notes herein authorized. Upon surrender for transfer of any Note at the principal corporate trust office of the Registrar duly endorsed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Registrar duly executed by, the registered owner or his attorney duly authorized in writing, the City shall execute and the Registrar shall authenticate, date and deliver in the name of the transferee or transferees a new fully registered Note or Notes of the same maturity and interest rate of authorized denominations, for a like aggregate principal amount. Any fully registered Note or Notes may be exchanged at said office of the Registrar for a like aggregate principal amount of Note or Notes of the same maturity and interest rate of other authorized denominations. The execution by the City of any fully registered Note shall constitute full and due authorization of such Note, and the Registrar shall thereby be authorized to authenticate, date and deliver such Note. The Registrar shall not be required to transfer or exchange any Note during the period of fifteen (15) days next preceding any interest payment date on such Note, nor to transfer or exchange any Note after notice calling such Note for prepayment has been mailed nor during the period of fifteen (15) days next preceding mailing of a notice of prepayment of any Notes. The person in whose name any Note shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of the principal of, premium (if any) or interest on any Note shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Note to the extent of the sum or sums so paid. The Registrar shall never register any Note to bearer. No service charge shall be made for any transfer or exchange of Notes, but the City or the Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Notes, except in the case of the issuance of a Note or Notes for the unredeemed portion of a Note surrendered for prepayment. The City and /or the Registrar may enter into an agreement with a securities depository registered under Section 17A of the Securities Exchange Act of 1934, as amended (the "Securities Depository'), including without limitation The Depository Trust Company, which is the record owner of the Notes, to establish procedures with respect to Notes owned by such Securities Depository. Such agreement may impose additional requirements on the Registrar with respect to the Notes. Section 7. Prepayment. The Notes shall be subject to prepayment at the option of the City, as a whole or in part (less than all of the Notes to be selected by the Registrar as hereinafter provided), on September 1, 2008, and on any date thereafter, at the redemption price of 100% of the principal amount thereof being prepaid plus accrued interest to the date fixed for prepayment. The Notes shall be prepaid only in the principal amount of $5,000 each and integral multiples thereof. At least forty -five (45) days prior to the date fixed for prepayment (unless a shorter notice shall be satisfactory to the Registrar), the City shall notify the Registrar of such date fixed for prepayment and of the principal amount of Notes to be prepaid. For purposes of any prepayment of less than all of the outstanding Notes, the particular Notes or portions of Notes to be prepaid shall be selected by the Registrar from the outstanding Notes by such method as the Registrar shall deem fair and appropriate, and which may provide for the selection for prepayment of Notes or portions of Notes in principal amounts of $5,000 and integral multiples thereof. The Registrar shall promptly notify the City in writing of the Notes or portions of Notes selected for prepayment and, in the case of any Note selected for partial prepayment, the certificate number and the principal amount thereof to be prepaid. Section 8. Prepayment Procedure. Unless waived by any owner of Notes to be prepaid, notice of the call for any such prepayment shall be given by the Registrar on behalf of the City by mailing the prepayment notice by first class mail, postage prepaid, at least thirty (30) days and not more than sixty (60) days prior to the date fixed for prepayment to the registered owner of the Note or Notes to be prepaid at the address shown on the Note Register or at such other address as is furnished in writing by such registered owner to the Registrar. All notices of prepayment shall state: (1) the date fixed for prepayment, (2) the prepayment price, (3) if less than all outstanding Notes are to be prepaid, the identification, including CUSIP numbers (and, in the case of partial prepayment, the respective principal amounts and certificate numbers) of the Notes to be prepaid, (4) that on the date fixed for prepayment the prepayment price will become due and payable upon each such Note or portion thereof called for prepayment, and that interest thereon shall cease to accrue from and after said date, and (5) the place where such Notes are to be surrendered for payment of the prepayment price including a contact person and telephone number, which place of payment shall be the principal corporate trust office of the Registrar. Prior to any date fixed for prepayment, the City shall deposit with the Registrar an amount of money sufficient to pay the prepayment price of all the Notes or portions of Notes which are to be prepaid on that date. Notice of prepayment having been given as aforesaid, the Notes or portions of Notes so to be prepaid shall, on the date fixed for prepayment, become due and payable at the prepayment price therein specified, and from and after such date (unless the City shall default in the payment of the prepayment price) such Notes or portions of Notes shall cease to bear interest. Upon surrender of such Notes for prepayment in accordance with said notice, such Notes shall be paid by the Registrar at the prepayment price. Installments of interest due on or prior to the date fixed for prepayment shall be payable as herein provided for the payment of interest. Upon surrender for any partial prepayment of any Note, there shall be prepared for the registered owner a new Note or Notes of the same maturity in the amount of the unpaid principal. All Notes which have been prepaid shall be cancelled and destroyed by the Registrar and shall not be reissued. In addition to the prepayment notice required above, further notice of prepayment (the "Additional Prepayment Notice') shall be given by the Registrar as set forth below, but no defect in the Additional Prepayment Notice nor any failure to give all or any portion of the Additional Prepayment Notice shall in any manner affect the effectiveness of a call for prepayment if notice thereof is given as prescribed above. Each Additional Prepayment Notice given hereunder shall contain the information required above, plus (i) the date such notice required above has been or will be mailed; (ii) the date of issuance of the Notes being prepaid, as originally issued; (iii) the maturity date of each Note (or portion thereof) to be prepaid; and (iv) any other descriptive information needed to identify accurately the Notes being prepaid. Each Additional Prepayment Notice shall be sent at least thirty (30) days before the date fixed for prepayment by legible facsimile transmission, first class mail (postage prepaid) or overnight delivery service to the following registered securities depository: The Depository Trust Company of New York, New York, and to at least two (2) national information services that disseminate notices of prepayment of obligations such as the Notes. Section 9. Payable Solely from Bonds and Revenues. The Notes, together with interest thereon, shall be payable only out of the Special Water Utility Bond Anticipation Note Special Redemption Fund as hereinafter provided, and shall be a valid claim of the owners thereof only against the Special Water Utility Bond Anticipation Note Special Redemption Fund and from the revenues pledged to such fund; and sufficient revenues are hereby pledged to the Special Water Utility Bond Anticipation Note Special Redemption Fund, and shall be used for no purpose other than to pay the principal of and interest on the Notes as the same fall due. The City, acting by and through the Governing Body, does hereby covenant that it will issue its water revenue bonds in anticipation of the sale of which the Notes are herein authorized to be issued not later than July 1, 2009, and apply a sufficient amount of the proceeds thereof to the retirement of the Notes by depositing such amount into the Special Water Utility Bond Anticipation Note Special Redemption Fund. Section 10. Form of Notes. The Notes, the certificate of authentication to be endorsed thereon and the form of assignment to be endorsed thereon are all to be in substantially the following forms with necessary and appropriate variations, omissions and insertions as permitted or required by this Resolution: (FORM OF NOTE) UNITED STATES OF AMERICA STATE OF WISCONSIN COUNTY OF WINNEBAGO CITY OF OSHKOSH WATER REVENUE BOND ANTICIPATION NOTE, SERIES 2008 -C See Reverse Side for Additional Provisions No. $ RATE OF INTEREST MATURITY DATE DATED DATE CUSIP NUMBER % July 1, 2009 June _, 2008 REGISTERED OWNER: PRINCIPAL AMOUNT: KNow ALL MEN BY THESE PRESENTS: That the City of Oshkosh, in the County of Winnebago and State of Wisconsin (the "City'), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner hereinabove identified, or registered assigns as hereinafter provided, on the Maturity Date hereinabove identified, solely from the revenues hereinafter specified, the Principal Amount hereinabove identified and solely from the revenues hereinafter specified to pay interest (computed on the basis of a 360 -day year of twelve 30 -day months) on such Principal Amount from the Dated Date of this Note hereinabove identified or from the most recent interest payment date to which interest has been paid at the Rate of Interest per annum hereinabove identified on January 1 and July 1 of each year, commencing on January 1, 2009, until said Principal Amount is paid, except as the provisions hereinafter set forth with respect to prepayment may be and become applicable hereto. The principal of this Note is payable in lawful money of the United States of America only upon presentation and surrender of this Note at the principal corporate trust office of U.S. Bank National Association, in Milwaukee, Wisconsin, as registrar and paying agent (the "Registrar). Payment of each installment of interest shall be made to the Registered Owner hereof who shall appear on the registration books of the City maintained by the Registrar at the close of business on the fifteenth day of the calendar month next preceding the applicable interest payment date, and shall be paid by check or draft of the Registrar mailed to such Registered Owner at his address as it appears on such registration books or at such other address as may be furnished in writing by such Registered Owner to the Registrar. Reference is hereby made to the further provisions of this Note set forth on the reverse side hereof, and such further provisions shall for all purposes have the same effect as if set forth on the front side of this Note. It is hereby certified, recited and declared that all acts, conditions and things required to be done, exist, happen and be performed precedent to and in the issuance of this Note have been done, have existed, have happened and have been performed in due time, form and manner as required by the Constitution and the laws of the State of Wisconsin, and that sufficient of the income and revenues to be received by the City from the operation of the waterworks system owned and operated by the City and the proceeds of certain water revenue bonds to be issued by the City have been pledged to and will be set aside into a special fund for the payment of the principal of and interest on this Note. This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Registrar. IN WITNESS WHEREOF the City of Oshkosh, Winnebago County, Wisconsin, by Its City Council, has caused this Note to be executed with the duly authorized manual or facsimile signature of its Acting City Manager and with the duly authorized manual or facsimile signature of its City Clerk and its official seal or a facsimile thereof to be impressed or reproduced hereon, as of the Dated Date hereinabove identified. City Clerk Acting City Manager [SEAL] CERTIFICATE OF AUTHENTICATION This Note is one of the Notes described in the within mentioned Resolution, and is one of the Water Revenue Bond Anticipation Notes, Series 2008 -C, of the City of Oshkosh, Winnebago County, Wisconsin. Date of Authentication: U.S. BANK NATIONAL ASSOCIATION Authorized Officer [FORM OF NOTE - REVERSE SIDE] This Note is one of an authorized issue of Water Revenue Bond Anticipation Notes, Series 2008 -C of like date, aggregating the principal amount of $4,410,000 (the "Notes') and issued to pay the cost of constructing, extending, adding to and improving the waterworks system of the City (the "System') and in anticipation of not less than a like aggregate principal amount of water revenue bonds of the City for such purposes and to retire the Notes, pursuant to Article XI, Section 3 of the Wisconsin Constitution and Section 66.0621, Wisconsin Statutes, as supplemented and amended. The interest on the Notes is payable, subject and subordinate to the lien on the revenues of the System in favor of certain outstanding Water Revenue Refunding Bonds, Series 2003 -G and certain outstanding Water Revenue Refunding Bonds, Series 2006 -E issued by the City (the "Outstanding Bonds'), only from the income and revenues to be derived from the operation of the System of the City, which income and revenues, subject and subordinate to said prior lien, have been set aside as a special fund for that purpose and identified as the "Special Water Utility Bond Anticipation Note Special Redemption Fund," and the principal of and interest on the Notes are payable only from the proceeds derived from the sale of said water revenue bonds of the City in anticipation of the issuance of which the Notes are authorized to be issued. This Note is issued pursuant to a resolution adopted on May 27, 2008, by the City Council of the City, and does not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation or provision, and no lien may be created or attached with respect to any property of the City or a consequence of the issuance of the Notes. Reference is hereby made to said resolution for a more complete statement of the revenues from which and conditions under which this Note is payable, a statement of the conditions on which obligations may hereafter be issued on a parity with this Note, and the general covenants and provisions pursuant to which this Note has been issued. This Note and the issue of which it is a part are payable from and secured by a pledge of the proceeds of said water revenue bonds of the City in anticipation of which the Notes are issued, and are payable from and secured by a lien on and pledge of the revenues and income derived from the operation of the System of the City after there have been first paid from such revenues and income the expenses of operation and maintenance of the System, the payments required to be made for the benefit of the Outstanding Bonds of the City, authorized by the resolutions adopted by the City Council of the City on April 16, 1992, on December 19, 1995, on February 13, 2001, on November 27, 2001, on October 14, 2003, and on December 12, 2006 (collectively, the "Resolutions "), and all outstanding bonds issued on a parity therewith, and certain other deposits required by the 1992 Resolutions. It is provided in the authorizing resolution the City shall charge and collect such lawfully established rates, fees and charges for the facilities and services afforded by the System to provide available revenues adequate at all times (i) to make all payments and deposits required by the Resolutions and required by the resolutions authorizing all parity bonds, and (ii) to pay when due the principal of and interest on all of the Notes. The Notes of the issue of which this Note is one are subject to prepayment at the option of the City, as a whole or in part (in integral multiples of $5,000, less than all the Notes to be selected by the Registrar in such manner as it shall deem fair and appropriate), on September 1, 2008, and on any date thereafter, at the prepayment price of 100% of the principal amount thereof being prepaid plus accrued interest to the date fixed for prepayment. Notice of any intended prepayment shall be sent by first class mail, postage prepaid, not less than thirty (30) days nor more than sixty (60) days prior to the date fixed for prepayment to the registered owner of each Note to be prepaid (in whole or in part) at the address shown on the registration books of the City maintained by the Registrar or at such other address as is furnished in writing by such registered owner to the Registrar. When so called for prepayment, this Note, or the portion thereof being so called for prepayment, will cease to bear interest on the specified prepayment date, provided funds for prepayment are on deposit at the place of payment at that time, and shall not be deemed to be outstanding. This Note is transferable by the Registered Owner hereof in person or by his attorney duly authorized in writing at the principal corporate trust office of the Registrar in Milwaukee, Wisconsin, but only in the manner, subject to the limitations and upon payment of the charges provided in the authorizing resolution, and upon surrender and cancellation of this Note. Upon such transfer a new Note or Notes of authorized denominations of the same maturity and interest rate and for the same aggregate principal amount will be issued to the transferee in exchange herefor. The Notes are issuable in fully registered form in the denomination of $5,000 each or integral multiples thereof. This Note may be exchanged at the principal corporate trust office of the Registrar for a like aggregate principal amount of Notes of the same maturity and interest rate of other authorized denominations, upon the terms set forth in the authorizing resolution. The City and the Registrar may deem and treat the Registered Owner as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof, premium, if any, hereon and interest due hereon and for all other purposes and neither the City nor the Registrar shall be affected by any notice to the contrary. The following abbreviations, when used in the inscription on the face of the within Note, shall be construed as though they were written out in full according to applicable laws or regulations: TEN Com- as tenants In Common UNIF GIFT /TRANS MIN ACT - Custodian (Cust) (Minor) TEN ENT- as tenants by the entirety JT TEN- as joint tenants with right of survivorship and not as tenants in common Under Uniform Gifts /Transfers to Minors Act (State) Additional abbreviations may also be used though not listed above. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (Name and Address of Assignee) the within Note and does hereby irrevocably constitute and appoint its successor as Registrar to transfer the said Note on the books kept for registration thereof with full power of substitution in the premises. Dated: NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears upon the face of the within Note in every particular, without alteration or enlargement or any change whatever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. Section 11. Compliance with Certain Provisions of the 1992 Resolution, Covenants Regarding Operation of System. The City hereby covenants and agrees with the registered owners of the Notes as follows: (a) During such period as the Notes are outstanding, the City will comply with each of the covenants appearing in the 1992 Resolution. (b) The City will operate and maintain the System in good condition and will charge and collect such lawfully established rates, fees and charges for the facilities and services rendered by the System so that the revenues of the System will be sufficient to meet the requirements of the 1992 Resolution and to pay interest on the Notes as the same shall fall due, and the City will make prompt application to the Wisconsin Public Service Commission for an increase in water rates and will adopt and enforce such increased rates whenever such increase is necessary to fulfill any covenants of this Resolution. The City hereby represents that it presently has power to issue and sell water revenue bonds pursuant to the Statute, for the purposes herein expressed in an amount fully sufficient to provide proceeds to retire the Notes. Section 12. Prohibition Against Prior Liens. The City will issue no other bonds, notes or obligations of any kind or nature payable from or enjoying a lien on the revenues or the property of the System having a priority over the Notes, other than the Outstanding Bonds and the water revenue bonds referred to in Section 9 of this Resolution. Section 13. Application of Revenues Creation of Note Redemption Fund; Source of Payment of Note. (a) From and after the issuance of the Notes, the City shall continue to operate and maintain the System in the manner provided by the 1992 Resolution. The revenues of the System shall continue to be allocated and deposited into the Water Utility Revenue Fund, the Water Utility Operation and Maintenance Account, the Water Utility Special Redemption Fund, the Water Utility Renewal and Replacement Account and the Water Utility Surplus Account created by the 1992 Resolution in the manner and in the amounts provided by Sections 12 and 13 of the 1992 Resolution. (b) From the first available money on deposit in the Surplus Fund created by the 1992 Resolution there shall be transferred into the Special Waterworks System Bond Anticipation Note Special Redemption Fund (the "Note Redemption Fund'), hereby created and established, an amount equal to not less than the aggregate amount of interest coming due on the Notes on January 1, 2009, and on the first day of each January and July thereafter. Upon delivery of the proposed water revenue bonds in anticipation of which the Notes are being issued, the proceeds thereof shall be transferred to the Note Redemption Fund in an amount equal to the then outstanding principal amount of and interest on the Notes. The money on deposit in the Note Redemption Fund shall be used solely for the purpose of paying the principal of and interest on the Notes as the same shall fall due. Uninvested money in the Note Redemption Fund shall be kept on demand deposit as a separate account with such bank as may be designated from time to time by the City as a public depository under the laws of Wisconsin. (c) Money in the Note Redemption Fund may be invested, to the extent permitted by Wisconsin law, only in (i) direct obligations of the United States of America, (ii) obligations of agencies of the United States of America guaranteed as to principal or interest by the United States of America, (iii) certificates of deposit of banks having a combined capital and surplus of $50,000,000 or more and which are members of the Federal Insurance Deposit Corporation, (iv) the Wisconsin local government pooled investment fund, (v) shares in money market or mutual funds comprised solely of obligations described in clauses (i) and (ii) above or comprised of obligations tax - exempt under Section 103(a) of the Internal Revenue Code of 1986 (the "Code'), other than private activity bonds under Section 141(a) of the Code, if such tax - exempt obligations have a rating at the time of purchase of not less than the two highest ratings by a nationally recognized rating service, or (vi) repurchase agreements with a bank or other financial institution ( "Repurchaser), including but not limited to the Paying Agent, provided, that each such repurchase agreement (A) is secured by one hundred percent (100 %) of the principal amount of the securities with respect to which such repurchase agreement is issued, (B) is in commercially reasonable form and is for a commercially reasonable period, and (C) results in transfer to the City or its designee of legal title to, or the grant to the City or its designee of a prior perfected security interest in, identified securities of the type described in clause (i) or clause (ii) above which are free and clear of any claims by third parties and are segregated in a custodial or trust account held by a third party (other than the Repurchaser) as the agent solely of, or in trust solely for the benefit of, the City or its designee; provided, that the securities acquired pursuant to any such repurchase agreement shall be valued at the lower of the then current market value of such securities or the repurchase prince thereof set forth in the applicable repurchase agreement. All of such investments shall mature at such time or times as it is determined that moneys will be needed to make the payments from the Note Redemption Fund required by this Resolution. All income from investments of money in the Note Redemption Fund shall be deposited in the Waterworks Revenue Fund created by the 1992 Resolution, and regarded as revenues of the System. Such investments shall be liquidated at any time when it is necessary to do so to provide money for any of the purposes for which the Note Redemption Fund was created. Section 14. Sale of Notes. The sale of the Notes, to JP Morgan Chase Bank, N.A., of Milwaukee, Wisconsin, at a price of $4,410,000 and accrued interest to the date of delivery is hereby confirmed, the same being the best bid submitted. The City Treasurer of the City is hereby authorized to deliver the Notes to said purchasers (or their designees) upon payment of the purchase price. Section 15. Disposition of Note Proceeds, No Arbitrage, Notes to Remain in Registered Form, Reimbursement. The proceeds from the sale of the Notes shall be disbursed as follows and not otherwise: Fund. (a) Accrued interest on the Notes shall be deposited in the Note Redemption (b) The principal proceeds from the sale of the Notes shall be deposited in a special fund by the Treasurer of the City in such bank or banks as may be designated by the City as public depositories under the laws of the State of Wisconsin and secured to the fullest extent permitted or required by the laws of the State of Wisconsin. Any money in said special fund may be invested from time to time, to the extent permitted by Wisconsin law, only in (i) direct obligations of the United States of America, (ii) obligations of agencies of the United States of America guaranteed as to principal or interest by the United States of America, (iii) certificates of deposit of banks having a combined capital and surplus of $50,000,000 or more and which are members of the Federal Insurance Deposit Corporation, (iv) the Wisconsin local government pooled investment fund, (v) shares in money market or mutual funds comprised solely of obligations described in clauses (i) and (ii) above or comprised of obligations tax - exempt under Section 103(a) of the Internal Revenue Code of 1986 (the "Code'), other than private activity bonds under Section 141(a) of the Code, if such tax - exempt obligations have a rating at the time of purchase of not less than the two highest ratings by a nationally reorganized rating service, or (vi) repurchase agreements with a bank or other financial institution ( "Repurchaser), including but not limited to the Paying Agent, provided, that each such repurchase agreement (A) is secured by one hundred percent (100 %) of the principal amount of the securities with respect to which such repurchase agreement is issued, (B) is in commercially reasonable form and is for a commercially reasonable period, and (C) results in transfer to the City or its designee of legal title to, or the grant to the City or its designee of a prior perfected security interest in, identified securities of the type described in clause (i) or clause (ii) above which are free and clear of any claims by third parties, and are segregated in a custodial or trust account held by a third party (other than the Repurchaser) as the agent solely of, or in trust solely for the benefit of, the City or its designee; provided, that the securities acquired pursuant to any such repurchase agreement shall be valued at the lower of the then current market value of such securities or the repurchase prince thereof set forth in the applicable repurchase agreement. All of such investments shall mature at such time or times as it is determined that moneys will be needed to make the payments from said special fund required by this Resolution. Moneys in said special fund shall be used solely for the purpose of paying the costs of constructing, extending, adding to and improving the Project for which the Notes have been authorized, including reimbursement to any fund or funds from which such costs have been advanced. Disbursements from said special fund for such improvements shall be made only upon approval of each such disbursement by the persons employed by the City to supervise the construction of such extensions, additions and improvements. Any balance remaining in said special fund after the completion of such improvements shall be used for future extensions, additions or improvements to the System and used solely for the purposes for which the Notes are hereby authorized. The City recognizes that the purchasers and owners of the Notes will have accepted them on, and paid therefor a price which reflects, the understanding that interest thereon is excludible from Federal gross income of the owners thereof under laws in force at the time the Notes shall have been delivered. In this connection the City agrees that it shall take no action which may render the interest on any of the Notes includible in Federal gross income of the owners thereof, and that the principal proceeds of the sale of the Notes shall be deposited in said special fund and used with due diligence for the completion of the Project for which the Notes are hereby authorized to be issued. The City agrees that, to the extent possible under state law, it will comply with whatever Federal law is adopted in the future which applies to the Notes and affects the excludibility of the interest on the Notes from Federal gross income of the owners thereof. The City Manager, the Acting City Manager, the City Clerk, the City Finance Director /City Treasurer of the City, or any of them, are hereby authorized to execute on behalf of the City a Tax Exemption Certificate and Agreement (the "Tax Exemption Certificate') to assure the purchasers and owners of the Notes that the proceeds of the Notes are not expected to be used in a manner which would or might result in the Notes being "reimbursement bonds" issued in contravention of Section 1.103 -18 of the United States Treasury Department Regulations (the "Regulations') or "arbitrage bonds" under Section 148 of the Internal Revenue Code of 1986, as amended (the "Code'), or the Regulations currently in effect or proposed. Such Tax Exemption Certificate shall constitute a representation, certification and covenant of the City, and shall be incorporated herein by reference, and no investment of Note proceeds or of moneys accumulated to pay the Notes herein authorized shall be made in violation of the expectations prescribed by said Tax Exemption Certificate. Such Tax Exemption Certificate shall constitute an agreement of the City to follow certain covenants which may require the City to take certain actions (including the payment of certain amounts to the United States of America) or which may prohibit certain actions (including the establishment of certain funds) under certain conditions as specified in such Tax Exemption Certificate. The City further recognizes that Section 149(a) of the Code requires the Notes to be issued and to remain in fully registered form in order that the interest thereon is excludible from Federal gross income of the owners thereof under laws in force at the time the Notes are delivered. In this connection, the City agrees that it will not take any action to permit the Notes to be issued in, or converted into, bearer or coupon form. Section 16. Duties of Registrar. If requested by the Registrar, the City Manager or the Acting City Manager of the Issuer is authorized to execute, and the City Clerk of the City is authorized to attest, and said City Manager, Acting City Manager and City Clerk are hereby authorized to deliver, the Registrar's standard form of agreement between the City and the Registrar with respect to the obligations and duties of the Registrar hereunder which shall include the following: (a) to act as Registrar, authenticating agent, paying agent and transfer agent as provided herein; (b) to give notice of prepayment of Notes as provided herein; (c) to cancel and destroy Notes which have been paid at maturity or upon earlier prepayment or submitted for exchange or transfer; (d) to furnish the City at least annually a certificate of destruction with respect to Notes cancelled and destroyed; and (e) to furnish the City at least annually an audit confirmation of Notes paid, Notes outstanding and payments made with respect to the interest on the Notes. Any corporation or association into which the Registrar may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, merger or consolidation to which it is a party, shall be and become successor Registrar hereunder, and vested with all the duties, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Any such successor Registrar shall give notice thereof to the City and the registered owners of the Notes. The Registrar may be removed at any time by the City by an instrument in writing delivered to the Registrar. In case the Registrar shall be removed, or be dissolved, or shall be in the course of dissolution or liquidation, or otherwise become incapable of acting hereunder, or in case it shall be taken under the control of any public officer or officers, or of a receiver appointed by the court, a successor may be appointed by the City by an instrument in writing, a copy of which shall be delivered to the retiring Registrar, the successor Registrar and the registered owners of the Notes. Section 17. Resolution a Contract; Remedies of Owners of Notes. The provisions of this Resolution shall constitute a contract between the City and the owner or owners of the Notes, and after the issuance of any of the Notes, no change or alteration of any kind in the provisions of this Resolution may be made until all of the Notes shall have been paid in full as to both principal and interest. The owners of any of the Notes shall have the right in addition to all other rights, by mandamus or other suit or action in any court of competent jurisdiction, to enforce his or their rights against the City, the Governing Body and any other authorized body to fix and collect rates and charges fully adequate to carry out all of the provisions and agreements contained in this Resolution, and for the appointment of a receiver for the System in the event of a default in payment of principal or interest. Section 18. Continuing Disclosure Undertaking. The City Manager, the Acting City Manager or the Finance Director /City Treasurer of the City is hereby authorized, empowered and directed to execute and deliver the Continuing Disclosure Undertaking with respect to the Notes (the "Continuing Disclosure Undertaking') in substantially the form as the individual executing the Continuing Disclosure Undertaking on behalf of the City shall approve, his or her execution to constitute conclusive evidence of his or her approval of the form of such Continuing Disclosure Undertaking. When the Continuing Disclosure Undertaking is executed and delivered on behalf of the City as herein provided, the Continuing Disclosure Undertaking will be binding on the City and the officers, employees and agents of the City, and the officers, employees and agents of the City are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of the Continuing Disclosure Undertaking, as executed. Copies of the Continuing Disclosure Undertaking shall be placed in the official records of the City, and shall be available for public inspection at the offices of the City. Notwithstanding any other provision of this Resolution to the contrary, the sole remedies for failure to comply with the Continuing Disclosure Undertaking shall be the ability of any beneficial owner of any Note to seek mandamus or specific performance by court order, to cause the City to comply with its obligations under the Continuing Disclosure Undertaking. Section 19. Other Documents. The City Manager, the City Clerk, the Finance Director /City Treasurer and all other officers of the City are hereby authorized to execute all documents and certificates and to take all such actions as may be necessary in connection with the authorization issuance, sale and delivery of the Notes and the performance of the obligations of the City hereunder and to carry out and comply with the terms of this Resolution. Section 20. Severability of Invalid Provisions. If any section, paragraph or provision of this Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining sections, paragraphs and provisions of this Resolution. Section 21. Conflicting Ordinances, Resolutions and Orders Superseded. All ordinances, resolutions or orders, or parts thereof, heretofore enacted, adopted or entered, in conflict with the provisions of this Resolution shall be, and the same are hereby, superseded to the extent of such conflict, and this Resolution shall be in effect from and after its passage. Adopted May 27, 2008 Approved May 27, 2008 Recorded May 27, 2008 /s/ Frank Tower /s/ Pamela R. Ubrig City Clerk