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HomeMy WebLinkAbout2001-5-6353ORDINANCE NO. 2001-5-6353 AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF PADUCAH, KENTUCKY, AUTHORIZING AND APPROVING THE ISSUANCE OF GENERAL OBLIGATION BONDS, SERIES OF 2001 (CONVENTION AND ARTS CENTER PROJECTS) IN THE APPROXIMATE AMOUNT OF $9,290,000 (WHICH AMOUNT MAY BE INCREASED OR DECREASED BY UP TO $710,000) FOR THE PURPOSE OF FINANCING CERTAIN PUBLIC PROJECTS, CONSISTING OF THE EXPANSION OF THE JULIAN CARROLL CONVENTION CENTER AND THE CONSTRUCTION OF THE FOUR RIVERS CENTER FOR THE PERFORMING ARTS FOR THE USE AND BENEFIT OF THE CITIZENS OF THE CITY; AUTHORIZING THE LEVY OF A DIRECT ANNUAL TAX ON ALL TAXABLE PROPERTY WITHIN THE CITY, IN ADDITION TO ALL OTHER TAXES, IN AN AMOUNT SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS WHEN AND AS THE SAME BECOME DUE; AUTHORIZING THE ESTABLISHMENT OF CERTAIN FUNDS TO PROVIDE FOR THE COLLECTION OF THE PROCEEDS OF THE TAX AND PROJECT REVENUES AND THE PAYMENT OF THE BONDS; AUTHORIZING THE PUBLICLY ADVERTISED, COMPETITIVE SALE -- OF SAID BONDS AND THE DISBURSEMENT OF THE PROCEEDS THEREOF; AND AUTHORIZING CERTAIN OTHER ACTIONS WITH REGARD TO THE FINANCING AND THE ACQUISITION, CONSTRUCTION, AND EQUIPPING OF THE PROJECTS GENERALLY. WHEREAS, the City of Paducah, Kentucky, acting by and through its City Commission (the "City") has determined that it is necessary and desirable and in the best interest of the citizens of the City, that the City cooperate with the County of McCracken, Kentucky (the "County"), the Paducah -McCracken County Tourist and Convention Commission (the `Bureau"), the Paducah -McCracken County Convention Corporation (the "Corporation") and the Four Rivers Center for the Performing Arts, Inc. ("Four Rivers") in financing the expansion of the Julian Carroll Convention Center (the "Convention Project") and the construction of the new Four Rivers Center for the Performing Arts (the "Arts Project"); said Convention Project and Arts Project being sometimes hereinafter referred to collectively as the "Projects", and WHEREAS, the City has and the County have jointly determined that their contributions to the Projects may most efficiently be effected through the issuance by the City of approximately $9,290,000 of its General Obligation Bonds, Series of 2001, dated June 1, 2001 (the "Bonds"), and WHEREAS, the City proposes to enter a certain Interlocal Cooperation Compact (the "Compact") with the County, the Bureau and the Corporation, and separate Bond Proceeds Disbursement Agreements, one with the Corporation and one with Four Rivers, whereunder the rights and duties of the City, the County, the Bureau, the Corporation and Four Rivers are spelled out in detail and provisions made for the repayment and retirement of the Bonds, and WHEREAS, in order to assure the payment of the Bonds, it is necessary that the City authorize the levy of a tax sufficient for that purpose; provided, however, that it is not now anticipated that the City will ever be required to actually levy and collect said Bond Tax, as hereinafter identified, as a result of the availability of certain Project Revenues, as hereinafter defined; NOW, THEREFORE, BE AND IT IS HEREBY ORDAINED BY THE CITY COMMISSION OF THE CITY OF PADUCAH, KENTUCKY, AS FOLLOWS: Section 1. PREAMBLE INCORPORATED, ORDINANCE AS CONTRACT, DEFINITIONS. That the Preamble to this Ordinance is hereby incorporated within the body of this Ordinance as fully as if copied in full herein. That this Ordinance shall constitute a contract between the City and the Registered and Beneficial Owners of the Bonds herein authorized and no change, alteration, or amendment in the provisions hereof shall be made subsequent to the delivery of said Bonds. For the purposes of this Ordinance and the Bonds the following terms shall have the meanings hereinafter set forth: "Act" or "Convention Act" means KRS 91A350 through 91A.392, as amended. "Adjustments" means the calculation of the actual dollar amounts or Contributions due from the Bureau, the City and the County each year to pay the principal and interest requirements of the Bonds after the application of the Pledged Tax for the period in question. "Arts Allocation" means that portion of the proceeds of the Bonds allocated to Four Rivers for construction of the Arts Project; said portion in no event to exceed $3,000,000, with Project Fund investment earnings being applied to the Convention Allocation. "Arts Center" or "Arts Project" means the new center for the performing arts to be constructed by Four Rivers Center for the Performing Arts, Inc. and financed from the Arts Allocation and other funds available to Four Rivers. "Bond Act" means Sections 66.011 through 66.171 of the Kentucky Revised Statutes. "Bond Counsel" means Henry M. Reed 111, Louisville, Kentucky. "Bond Fund" or "Sinking Fund" or "Series 2001 Sinking Fund" means the "City of Paducah General Obligation Bond and Interest Redemption Fund of 2001" established by this Bond Ordinance. "Bond Ordinance" means this Ordinance passed and adopted by the City Commission authorizing the issuance of the Bonds and setting forth the contractual obligations of the City. 59 "Bond Tax" means the direct, annual ad valorem tax on all property within the City of Paducah, Kentucky which is subject to taxation for City purposes, occupational license fees (if any), insurance premium taxes and any and all other receipts of taxes, excises, permits, licenses, fines or other sources of revenue of, or of revenue distributions to, the City and which shall be levied only if the Project Revenues prove insufficient to adequately provide for the retirement of the Bonds. "Bonds" means approximately $9,290,000 principal amount of the City's General Obligation Bonds, Series of 2001, authorized pursuant to the provisions of KRS 66.011 through 66.171; (subject to the Permitted Adjustment) notwithstanding anything contained herein to the contrary, said Bonds, at the election of the City, may be issued in two or more Series. "Bond Registrar" means Fifth Third Bank, Cincinnati, Ohio acting in its capacity as the registrar of the Bonds and Paying Agent for the Bonds. i "Bureau's Contribution" means 33 1/3% of the Overage. "Bureau's Share" means 50% of the aggregate Room Tax; provided, however, said amount shall be reduced by the deduction of the Bureau's Contribution. "City" means the City of Paducah, Kentucky acting by and through its City Commission. "City's Contribution" means 33 1/3% of the Overage. "Code" means the Internal Revenue Code of 1986, as amended, and the Regulations promulgated thereunder. "Commission" or "Bureau" means the Paducah -McCracken County Tourist and Convention Commission established pursuant to KRS 918.350 (2) and doing business as the "Paducah -McCracken County Convention and Visitors Bureau." "Construction Depository" means the City or such financial institution as it shall designate which will act as depository for the Project Fund. "Convention Allocation" means that portion of the proceeds of the Bonds allocated to the Corporation for the construction of the Convention Project; said portion being $6,000,000, plus the Escrowed Tax, plus earnings from the investment of monies on deposit in the Project Fund. "Convention Center" means the Julian Carroll Convention Center as same presently exists and as same is subsequently improved. "Convention Project" means the improvements and additions to the existing Convention Center financed from the Convention Allocation and other funds available to the Corporation. "Corporation" means the Paducah -McCracken County Convention Center Corporation, a non-profit, charitable corporation established at the direction of the City and County to act as their agency and instrumentality for the purpose of promoting convention and trade shows generally. "Corporation Contract" means the agreement between the City and the Corporation whereunder the Corporation shall agree to construct the Convention Project upon its receipt of the Convention Allocation, and agree to operate, maintain and insure the Convention Center with the Corporation's Share. "Corporation's Share" means 16 2/3% of the aggregate Room Tax which shall be applied at the sole discretion of the Corporation to the operation, maintenance and insurance of the Convention Center. "Costs" means all costs incident to the acquisition, construction and equipping of the Projects and the costs of issuance of the Bonds; "Costs of Issuance" means those expenses incident to the issuance of the Bonds, including, but not being limited to, the fees of the rating agency, Financial Advisor, Bond Counsel, Bond Registrar and Paying Agent. "Costs of Issuance Fund" means the separate account established with the Bond Registrar from the proceeds of the Bonds from which the Costs of Issuance are to be paid. "County" means the County of McCracken, Kentucky acting by and through its Fiscal Court "County's Guarantee" means the annual amount due as a principal and interest payment on its Note which shall equal 50% of the annual principal interest requirements on the Bonds. "County's Contribution" means 33 1/3% of the Overage. "Date of Delivery" means the date on which the Bonds are delivered to the purchaser thereof. "Debt Service" means the aggregate annual principal and interest requirements of the Bonds. "Escrowed Tax" means that portion of the Pledged Tax authorized under KRS 91A.392 due and owing to the County as of March 31,2001. L-101 "Financial Advisor" means J.J.B. Hilliard, W.L. Lyons, Inc., Louisville, Kentucky. "Four Rivers Contract" means the agreement between the City and Four Rivers whereunder Four Rivers shall agree to construct, operate, maintain and insure the Arts Center upon its receipt of the Arts Allocation. "Interlocal Act" means KRS 65.210 through 65.300. "Investments" means those investments permitted under KRS 66.480. "KRS" means the Kentucky Revised Statutes, as amended. "Note" means the General Obligation Note issued by the County in favor of the City in the principal amount equal to 50% of the principal amount of Bonds issued by the City. "Overage" means the excess of Debt Service over and above the proceeds of the Pledged Tax; calculated on an annual basis. "Parity Bonds" means additional bonds of the City secured by the same Pledged Tax and the County's, City's and Bureau's Contributions as to the Bonds. "Pledged Tax" means 33 1/3% of the aggregate Room Tax. "Principal Due Date" means June 1 of each year when principal matures on the City's Bonds. "Project Fund" means the separate account established with the Construction Depository into which the proceeds of the Bonds shall be deposited after the deduction of the Costs of Issuance and applied to the acquisition, construction and equipping of the Projects. "Project Revenues" means (a) the Pledged Tax, (b) the County's Contribution, (c) the Bureau's Contribution and (d) the City's Contribution. "Reconciliation Date" means each November 15 and May 15 at which times the City and County shall calculate the receipts of the Pledged Tax for the period preceding the Interest Due Date and calculate the Contributions, if any, required of the City, the County and the Bureau. "Room Tax" or "Tax" means the special transient room tax authorized to be levied by the County in accordance with KRS 91A.390 and 91A.392, in the aggregate authorized amount of 6%. "Sinking Fund" or "Bond Fund" means the "Series 2001 Sinking Fund" established with the Bond Registrar as a trust fund into which the proceeds of the Project Revenues and Bond Tax, if necessary, shall be deposited and applied only to the payment of the Bonds. "Term" or "Term of Bonds" means the period beginning with the dated date of the Bonds and running until the last principal maturity of the Bonds is paid and retired, including all interest thereon. Section 2. SUMMARY OF FINANCING PLAN AS SET FORTH IN INTERLOCAL COOPERATION COMPACT. The rights and duties of the City, the County, the Bureau, the Corporation and Four Rivers as set forth in the Compact and Bond Proceeds Disbursement Agreements are generally summarized as follows: (A) The Compact provides that 33 1/3% of the Room Tax shall be pledged to the payment of the Bonds (the "Pledged Tax") and establishes the difference between Debt Service on the Bonds and the Pledged Tax as the "Overage" for which the City, the County and the Bureau will be equally responsible each year. (B) The City will issue its Bonds and apply the proceeds to the Convention Allocation and Arts Allocation in accordance with the terms of this Ordinance, the Compact and the Agreements. The City will contribute, to the extent required, 33 1/3% of the Overage each year. (C) The County will authorize and issue its General Obligation Note payable to the City in an amount equal to fifty percent (50%) of the principal amount City's Bonds and bearing interest at the same rates; provided, however, that the County shall be entitled to credits on its annual payment to the extent of (a) the Pledged Tax (b) the Bureau's Contribution and (c) the City's Contribution or a net County Contribution equal to 33 1/3% of the Overage. The County shall collect and account for the Room Tax and Contributions from the Bureau and apply same in accordance with the terms of this Ordinance and the Compact; the City's Contribution, if any, shall be paid directly into the Sinking Fund. (D) The Bureau will agree to the issuance of the Bonds by the City and the allocation of the proceeds as set forth in the Compact. 61 The Bureau will pay 33 1/3% of the Overage each year as its Contribution. The Bureau will maintain its various programs for the promotion of tourism and conventions and provide for the payment of its Contribution from the Bureau's 50% Share of the Room Tax. (E) The Corporation will construct the Convention Project upon its receipt of the Convention Allocation and thereafter operate, maintain and insure the Convention Center utilizing its 16 2/3% Share of the Room Tax. (F) Four Rivers will construct the Arts Project from the Arts Allocation and other funds available to it and will be solely responsible for the operation, maintenance and insurance of said Arts Project upon its completion. Section 3. AUTHORIZATION OF BONDS. That for the purposes set forth in the Preamble to this Ordinance there are hereby authorized to be issued $9,290,000 principal amount of the City's General Obligation Bonds, Series of 2001 (Convention and Arts Center Projects), dated June 1, 2001 (the "Bonds"). Said Bonds shall bear interest from their date, payable December 1, 2001, and semi-annually thereafter at rates established through the public sale thereof and shall mature or be subject to mandatory redemption as to principal on June 1 in each of the years as follows: Principal Maturity Principal Amount Principal Maturity Principal Amount 2002 $ 205,000 2014 340,000 2003 210,000 2015 360,000 2004 220,000 2016 380,000 2005 230,000 2017 400,000 2006 235,000 2018 420,000 2007 245,000 2019 440,000 2008 260,000 2020 465,000 2009 270,000 2021 495,000 2010 280,000 2022 520,000 2011 295,000 2023 550,000 2012 310,000 2024 580,000 2013 325,000 2025 610,000 2026 645,000 Notwithstanding the authorization of $9,290,000 of said Bonds, the City may elect to issue up to $710,000 more or less of said Bonds (the "Permitted Adjustment"'). Section 4. FORM AND EXECUTION OF BONDS; BOOK -ENTRY -ONLY -SYSTEM, OPTIONAL AND MANDATORY REDEMPTION, AUTHENTICATION (A) The Bonds shall be issued in fully registered and Book -Entry form and shall be prepared by Bond Counsel following their sale. The Bonds shall be executed with the facsimile signature of the Mayor, attested by the facsimile signature of the City Clerk and imprinted with a facsimile of the corporate seal of the City. The Bonds shall be payable at the principal office of the Paying Agent. No Bond shall be valid or binding upon the City unless and until it is validated by the manual signature of a duly authorized representative of the Paying Agent/Bond Registrar. (B) In the event the purchaser of the Bonds so elects, the Bonds may be issued as Term Bonds in which event the Paying Agent shall select by lot a principal maturity originally scheduled to mature on the principal due date as reflected by the successful bid and shall notify the Registered Owners of Bonds so selected for mandatory redemption not less than thirty (30) days prior to the principal due date by regular United States Mail. (C) The Bonds shall utilize the Book -Entry -Only -System facilitated by The Depository Trust Company, New York, New York ("DTC"). The City's Director of Finance is authorized to execute on behalf of the City a blanket "Letter of Representations" and such "Operational Arrangements" as DTC may require in order to implement the Book -Entry -Only -System (D) The Bonds maturing on or after June 1, 2012 shall be subject to prior redemption at the option of the City on any date falling on or after June 1, 2011 in any order of maturities (less than all of a single maturity to be selected by lot) upon thirty (30) days' written notice to the Registered Owner, upon terms of the face amount, plus accrued interest to the redemption date, but without redemption premium. 62 Section 5. COMPLIANCE WITH CONSTITUTION-, DESIGNATION OF PUBLIC PROJECTS; AUTHORIZATION OF BOND TAX, PLEDGE OF BOND TAX TO PAYMENT OF BONDS, DESIGNATION AS GENERAL OBLIGATION BONDS. (A) That the debt represented by the Bonds is hereby determined to be within the maximum indebtedness of the City permitted under Section 158 of the Constitution of Kentucky. (B) That the City is authorized to contract the indebtedness represented by the Bonds pursuant to Section 159 of the Constitution of Kentucky and provide for the collection of an annual tax sufficient to pay the interest on said Bonds and establish the hereinafter identified Sinking Fund to provide for the payment of the principal thereof. (C) That pursuant to Section 157 of the Constitution of Kentucky and Section 66.111 of the Bond Act there is hereby authorized to be levied, and the City hereby covenants to so levy and collect, each year that the Bonds remain ' outstanding the Bond Tax in an amount sufficient to provide for the full payment of the principal and interest requirements of said Bonds; said Bond Tax to be levied only if the Project Revenues are not sufficient to pay the principal and interest requirements of the Bonds as the same become due. (D) That by the adoption of this Ordinance the City covenants with Owners of the Bonds that it shall levy each year the Bond Tax in a sufficient amount and appropriate in its annual budget, together with other monies available to it, including the Project Revenues, an amount of funds sufficient to pay the "debt charges" on the Bonds as defined in Section 66.011 (4) of the Bond Act. (E) That the Bond Tax shall include the ad valorem property taxes permitted under Section 157 of the Constitution of Kentucky, occupational license fees (if any), insurance premium taxes, excises and any other receipts from taxes, excises permits, licenses, fines or other sources of revenue of, or of revenue distributions to, the City. (F) That the City hereby declares and determines that the Projects constitute "public projects" within the meaning of Section 66.011 (17) of the Bond Act and hereby determines that the acquisition, improvement, operation and maintenance of the Projects are useful in the attraction and promotion of tourism and conventions. (G) That the Bond Tax, to the extent required, shall, as received, be deposited in the Sinking Fund for the Bonds and applied solely to the payment of the principal and interest requirements of and administrative expenses for the Bonds. Section 6. EXECUTION OF DOCUMENTS AUTHORIZED. That in order to effect the financing plan evidenced by the Bonds the Mayor, City Clerk and Finance Director are hereby authorized to execute those documents necessary to provide for the issuance of said Bonds and the payment thereof, provided, in each instance the particular document in question shall be subject to the review and approval of the City Attorney and City Manager. (A) the Bonds and such bond closing documents as Bond Counsel may require, and (B) the Interlocal Cooperation Compact among the City, the County, the Bureau and the Corporation relating to financing the Projects generally and the allocation of the Room Tax. (C) the Bond Proceeds Disbursement Agreement with the Corporation relating to the Convention Allocation and the construction of the Convention Project. (D) the Bond Proceeds Disbursement Agreement with Four Rivers relating to the Arts Allocation and the construction of the Arts Project. (E) the Continuing Disclosure Agreement with the Bond Registrar in order to comply with Rule 15c2-12 of the Securities and Exchange Commission in providing financial information with regard to the Bonds on a continuing basis. (F) the Bond Registrar/Paying Agent Agreement with Fifth Third Bank, Cincinnati, Ohio regarding the administration of payment of the Bonds and the interest thereon. (G) such other documents as are required to implement the acquisition, construction and equipping of the Projects, and the issuance of the Bonds generally. Section 7. RATIFICATION OF EMPLOYMENT OF FINANCIAL ADVISOR, ADVERTISED SALE OF BONDS; ACCEPTANCE OF BID. (A) That the employment of J.J.B. Hilliard, W.L. Lyons, Inc., Louisville, Kentucky, as Financial Advisor to the. City and Henry M. Reed III. Louisville, Kentucky as Bond Counsel is hereby authorized, ratified and approved. The Financial Advisor shall prepare an "Official Statement" for distribution to prospective purchasers to the Bonds which shall contain all pertinent information concerning the City, the Projects and the Bonds. (B) That said Bonds shall be sold at public sale after advertising according to law, and the City Clerk is hereby authorized and directed to make such advertising. The specific terms, bidding conditions and restrictions governing 63 the sale of said Bonds shall be as set forth in the forms of "Notice of Bond Sale," "Official Terms and Conditions of Bond Sale" and "Official Bid Form" which shall be prepared by Bond Counsel. Upon the receipt of the sealed, competitive bids after the required advertisement, the Mayor and Finance Director, in conjunction with the Financial Advisor, shall calculate the best purchase offer and the exact principal amount of Bonds to be awarded, after calculating the Permitted Adjustment, if any, and accept the offer to purchase said Bonds on behalf of the City; provided, however, that the City Commission shall ratify and confirm such acceptance by Municipal Order. Section 8. ESTABLISHMENT OF FUNDS. That there are hereby authorized to be established the following funds or accounts which shall be maintained so ! �1 long as the Bonds remain outstanding and unpaid: (A) The Compact shall provide that a Room Tax Revenue Account shall be maintained by the County under its control and all receipts from the Room Tax shall be deposited in said Account as same as received, transfers shall be made to the Series 2001 Sinking Fund from said Revenue Account on the fifteenth (15th) days of each November and May to the extern of the Pledged Tax. (B) The Compact shall provide that an Adjustment Account shall be maintained by the County under its control and on the fifteenth (15a') days of November and May of each year the County, in conjunction with the City's Finance Director and Treasurer of the Bureau, shall calculate the Overage of excess Debt Service over the Pledged Tax, which shall be paid 33 1/3% each by the City, the County and the Bureau and transferred to the Series 2001 Sinking Fund. (C) The Series 2001 Sinking Fund which shall receive the transfers from the Revenue Account and Adjustment Account and; only if necessary, receipts of the Bond Tax herein authorized, to the extent required for the Bonds. Said Sinking Fund monies shall be used only for the payment of the principal and interest requirements of the Bonds. Upon the delivery of the Bonds the accrued interest from the date of the Bonds to the date of their delivery shall be deposited in said Fund. In the event that the annual receipts of the Pledged Tax increase to the extent that the Overage no longer exists, then upon the establishment of a balance equal to the maximum annual Debt Service in the Series 2001 Sinking Fund, amounts in excess of said balance may at the direction of the City's Finance Director be applied (a) to the redemption of Bonds prior to their stated maturities (b) to the purchase of Bonds on the open market at prices not to exceed the then current pre -payment penalty or (c) to the purchase of the Investments permitted under this Ordinance to be deposited in escrow (subject to compliance with the Code) in order to defease all or any portion of the Bonds then outstanding. (D) The Project Fund shall be established with the Construction Depository and shall receive the proceeds of the Bonds remaining after the deduction of the Costs of Issuance and accrued interest and be applied to the acquisition,- construction and equipping of the Projects (including reimbursement to the City or County for any funds advanced in anticipation of the issuance of the Bonds). Withdrawals may be made on order of the City's Finance Director in accordance with the respective Bond Proceeds Disbursement Agreement. Upon completion of the Convention Project any surplus remaining on deposit in the Project Fund shall be transferred to the Sinking Fund; subject to the Arts Allocation. The Escrowed Tax shall be transferred to the Project Fund upon delivery of the Bonds. (E) Costs of Issuance Fund which shall receive from the proceeds of the Bonds the amounts necessary to pay the Costs of Issuance of the of Bonds upon the delivery of said Bonds. The Bond Registrar shall remit the required payments in the amounts and to the parties specified in writing by the Mayor or Finance Director upon the delivery of the Bonds. Any amounts remaining in the Costs of Issuance Fund following the payment of all such Costs of Issuance shall be transferred to the Project Fund. (F) Monies on deposit in the Funds enumerated in subsections (A) through (E) of this Section shall be invested in the Investments permitted and any earnings carried to the credit of the Fund from which the investment 'vas made. Section 9. REGISTRATION OF BONDS: DUTIES OF BOND REGISTRAR AND PAYING AGENT. Fifth Third Bank, Cincinnati, Ohio, is hereby designated as the Bond Registrar and Paying Agent for the Bonds. The Bond Registrar and Paying Agent shall receive compensation for its services in accordance with its agreement with the City. (A) The duties of the Bond Registrar shall be as follows: (i) To register all Bond Certificates in the name of the Registered Owner thereof in accordance with the provisions of the Code; (ii) Should the Book -Entry -Only -System no longer be utilized, upon being supplied with properly authenticated assignment satisfactory to said Bond Registrar (in the sole discretion of said Bond Registrar), to transfer the ownership of Bond Certificates from one Registered Owner to another within three (3) business days of the receipt of proper authentication by said Bond Registrar; (iii) To cancel and destroy (or remit to the City for destruction) all exchanged or matured Bond Certificates, and to maintain adequate records relative thereto; (B) The duties of the Paying Agent shall be as follows: 64 (i) To maintain the Series 2001 Sinking Fund established under this Ordinance and to invest the same in accordance with the provisions hereof, in accordance with the directions of the City's Finance Director, (ii) To remit, but only to the extent that all required funds are made available to the Paying Agent by the City, semiannual interest payments direct to the Registered Owner of each Bond by regular United States Mail; said interest payments shall be deposited in the United States Mail no later than each interest due date. (iii) Matured or redeemed Bonds shall be payable upon presentation to the Paying Agent. For interest payment purposes, the Paying Agent'shall be entitled (iv) to rely on its records as Bond Registrar as to the ownership of each Bond as of the 15th day of the month preceding an interest due date and the Paying Agent's checks shall be drawn and mailed accordingly; (iii) To notify each Registered Owner to be prepaid and to redeem Bonds prior to their stated maturity upon their presentation in accordance with the provisions of this Ordinance upon being supplied with sufficient i funds, and (iv) To supply the City with a written accounting evidencing the payment of interest and principal within thirty days following each due date. The Bond Registrar/Paying Agent shall be entitled to the advice of counsel and shall be protected for any acts taken by it in good faith and reliance upon such advice. The Bond Registrar/ Paying Agent shall not be liable for any action taken or omitted to be taken by it in good faith and believed by it to be within its discretion or the power conferred upon it by this Ordinance or any agreement with the City, or be responsible for the consequences of any oversight or error of judgment. The Bond Registrar/Paying Agent may at any time resign from its duties set forth in this Ordinance or in any agreement with the City by filing its resignation with the City Clerk and notifying the Registered Owners of the Bonds herein authorized. Thereupon, the City, shall designate a successor Bond Registrar/Paying Agent which shall be an incorporated bank or trust company. Notwithstanding the foregoing in the event of the resignation of the Bond Registrar/Paying Agent, provisions shall be made for the orderly transition of the books, records and accounts relating to the Bonds to the successor Bond Registrar/Paying Agent in order that there will be no delinquencies in the payment of interest or principal due on the Bonds. Section 10. TAX COVENANTS. The City shall at all times do and perform all acts and things permitted by law and necessary or desirable in order to assure that interest paid by the City on the Bonds shall be excludable from the gross income of the recipients thereof for Federal income tax purposes under any valid provision of the Internal Revenue Code of 1986, as amended, and the Regulations promulgated thereunder. The City shall not permit at any time or times any of the proceeds of the Bonds to be used directly or indirectly to acquire any securities or obligations the acquisition of which would cause such Bonds to be "arbitrage bonds" as defined in Section 148 of the Code, as then in effect. The City further covenants that prior to the issuance of said Bonds and as a condition precedent to such issuance, the City shall certify by issuance of a certificate of the Mayor or Finance Director, supplemental to this Ordinance, that on the basis of the facts, estimates and circumstances in existence on the date of issue of said Bonds, it is not expected that the proceeds of said Bonds will be used in a manner which would cause such obligations to be "arbitrage bonds" under the Code. Notwithstanding the fact that the City will issue in excess of $5,000,000 of its tax exempt obligations during the calendar year ending December 31, 2001 making the Series 2001 Sinking Fund and Project Fund Investments subject to the "rebate requirements" of the Code, Bond Counsel has advised that Project Fund earnings will be exempt from rebate if Bond proceeds are expended (calculated from the date the Bonds are delivered) 10% within six months; 45% within twelve months; 75% within eighteen months and 100% within twenty-four months. The City covenants and agrees that if the spenddown limitations are not observed, and any Fund or account generates earnings from "non -purpose investments" in excess of the amount which said investments would have earned at a rate equal to the "yield" on the Bonds, plus any income attributable to such excess, there shall be established a separate and special fund with the Paying Agent to be designated as the "Excess Earnings and Rebate Fund," which shall be utilized for the collection and payment of any excess generated from investments and the remittance thereof to the United States on or before a date five years and thirty days from the date said Bonds are delivered, and once every five years thereafter until the final retirement of the Bonds; the last installment, to the extent required, to be made no later than sixty days following the date on which funds sufficient for the complete retirement of the Bonds are deposited with the Paying Agent or any escrow agent. j The City Commission, by the adoption of this Ordinance, hereby designates the Bonds as "qualified tax-exempt obligations" within the meaning of the Code Section 265(b)(3) and certifies that the City does not reasonably anticipate that the total principal amount of qualified tax-exempt obligations which it will issue during the calendar year ending December 31, 2001, will exceed $10,000,000. Section 11. RIGHT TO ISSUE PARITY BONDS RESERVED. That the right is hereby reserved in the City to issue additional bonds ranking on the basis of parity with the Bonds herein authorized for the purposes of completing the Projects or financing future additions and improvements thereto; said Parity Bonds shall be payable from and secured by the Pledged Tax and Project Revenues. Notwithstanding anything contained herein to the contrary, prior to the issuance of any Parity Bonds, the City, the County, the Bureau and the Corporation shall formally amend the Compact in order to provide additional Contributions, if necessary. 65 Nothing contained herein shall prevent the City from issuing its general obligation bonds in the future for purposes other than the Projects upon such terms as it shall, in its sole discretion, determine. Section 12. CONTRACTUAL NATURE OF ORDINANCE. This Ordinance shall constitute a contract between the City and all who may become the Registered Owners of the Bonds, and any bonds subsequently issued ranking on a parity therewith, and after the issuance and delivery of such Bonds, no change, variation or alteration of any kind in the provisions of this Ordinance shall be made in any manner except for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective or inconsistent provisions contained herein. Section 13. SEVERABILITY. If any section, paragraph or clause hereof shall be held invalid, the invalidity of said section, paragraph or clause shall no affect any of the remaining provisions of this Ordinance. Section 14. CONFLICTS REPEALED. All ordinances, resolutions, orders or parts thereof in conflict with the provisions of this Ordinance are hereby repealed and this Ordinance shall take effect and be in force upon its adoption. Given first reading on May 8, 2001. Given second reading and passed and adopted on May 22, 2001. ATTEST: PES CERTIFICATE I, Lenita Smith, hereby certify that I am the duly authorized and acting City Clerk of the City of Paducah, Kentucky, and that the foregoing is a true and correct copy of an Ordinance of the City Commission introduced and given first reading on the 8a` day of May, 2001 and given second reading and passed and adopted at a regular meeting held on the 22°d day of May, 2001 by a vote of five (5) voting for the motion to adopt said Ordinance and none voting against said motion. A copy of said Ordinance is of record in my office and is available for inspection. Dated this 22 day of May, 2001. CITY OF PADUCAH, KENTUCKY r