HomeMy WebLinkAboutRefunding and Improvement Bonds
Augusta Richmond GA
DOCUMENT NAME M t- fO"6 I n~ ()\ n d T M f'eW. ""^+ l?o MIs
DOCUMENTTYPE: hesoI0+{~Y\
YEAR:
1996
BOX NUMBER: :;l
FILE NUMBER: /2 ~ Lf 5
NUMBER OF PAGES:
21
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A RESOLUTION TO SPECIFY THE PRINCIPAL AMOUNTS OF AND RATES OP ~
INTEREST THE RICHMOND COUNTY WATER AND SEWERAGE REVENUE REFUNDING
AND IMPROVEMENT BONDS, SERIES 1996A, RICHMOND COUNTY TAXABLE WATER
AND SEWERAGE REVENUE REFUNDING BONDS, SERIES 1996B AND RICHMOND
COUNTY WATER AND SEWERAGE REVENUE REFUNDING BONDS, SERIES 1997,
SHALL BEAR; TO SPECIFY THE SERIES 1996A BONDS, SERIES 1996B BONDS
AND SERIES 1997 BONDS 1fBICH SHALL BE TERM BONDS SUBJECT TO
MANDATORY REDEMPTION AND TO STATE THE PROVISIONS APPLICABLE
THERETO; TO PROVIDE FOR BOND INSURANCE; TO DESIGNATE THE
REPRESENTATrvE OF THE ORIGINAL PURCHASER OF THE SERIES 1996A BONDS,
SERIES 1996B BONDS AND SERIES 1997 BONDS; TO AMEND THE DATED DATE
OF THE SERIES 1996A BONDS AND THE SERIES 1996B BONDS; TO AMEND THE
OPTIONAL REDEMPTION PROVISIONS APPLICABLE TO THE SERIES 1997 BONDS;
TO PROVIDE FOR THE ISSUANCE AND DELrvERY OP THE SERIES 1996A BONDS,
THE SERIES 1996B BONDS AND THE SERIES 1997 BONDS; TO RATIFY,
REAFFIRM, AMEND AND SUPPLEMENT THE BOND RESOLUTION ADOPTED OCTOBER
21, 1996, AUTHORIZING THE ISSUANCE OF SAID SERIES 1996A BONDS,
SERIES 1996B BONDS AND SERIES 1997 BONDS; AND FOR OTHER PURPOSES:
1fBEREAS, Richmond County (the "Consolidated Government"),
pursuant to that certain resolution adopted October 21, 1996 (the
"1996 Resolution"), has authorized the issuance of not to exceed
$69,670,000 aggregate principal amount of its Water and Sewerage
Revenue Refunding and Improvement Bonds, Series 1996A, dated
November 15, 1996 (the "Series 1996A Bonds") in the form of fully
registered bonds without coupons, transferable to subsequent owners
as hereinafter provided, in the denomination of $5,000 or any
integral multiple thereof, numbered from R-1 upwards, bearing
interest from date at such rate or rates not exceeding 6.55 percent
in any year, all interest payable April 1, 1997 and semiannually
thereafter on the 1st days of April and October in each year, and
the principal maturing (or being subject to mandatory sinking fund
redemption) on the 1st day of October, in each of the years 1997 to
2028, inclusive, and in such principal amounts such that the
maturing annual debt service in any sinking fund year will not
exceed $5,873,890; and
WHEREAS, the Consolidated Government, pursuant to the 1996
ReSOlution, has authorized the issuance of not to exceed $3,760,000
aggregate principal amount of its Taxable Water and Sewerage
Revenue Refunding Bonds, Series 1996B, dated November 15, 1996 (the
"Series 1996B Bonds") in the form of fully registered bonds without
coupons, transferable to subsequent owners as hereinafter provided,
in the denomination of $5,000 or any integral multiple thereof,
numbered from R-1 upwards, bearing interest from date at such rate
or rates not exceeding 8.05 percent in any year, all interest
payable April 1, 1997 and semiannually thereafter, on the 1st days
of April and October in each year, and the principal maturing (or
being subject to mandatory sinking fund red~mption) on the 1st day
of October, in each of the years 1997 to 2007, inclusive, and in
such principal amounts such that the maturing annual debt service
in any sinking fund year will not exceed $863,565; and
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WHEREAS, the Consolidated Government, pursuant to the 1996
Resolution, has authorized the issuance of not to exceed $6,210,000
aggregate principal amount of its Water and Sewerage Revenue
Refunding Bonds, Series 1997, dated as of the first day of the
month in which the Series 1997 Bonds are issued and delivered (the
"Series 1997 Bonds" and, together with the Series 1996A Bonds and
the Series 1996B Bonds, the "Series 1996/1997 Bonds") in the form
of fully registered bonds without coupons, transferable to
subsequent owners as hereinafter provided, in the denomination of
$5,000 or any integral multiple thereof, numbered from R-1 upwards,
bearing interest from date at such rate or rates not exceeding 6.50
percent in any year, all interest payable April 1, 1997 and
semiannually thereafter on the 1st days of April and October in
each year, and the principal maturing (or being subject to
mandatory sinking fund redemption) on the 1st day of October, in
each of the years 1997 to 2021, inClusive, and in such principal
amounts such that the maturing annual debt service in any sinking
fund year will not exceed $504,960; and
WHEREAS, The Robinson-Humphrey Company, Inc., Atlanta, Georgia
(the "Underwriter") has offered to purchase the Series 1996/1997
Bonds pursuant to a Bond Purchase Agreement, dated the date hereof,
as follows: (a) the Series 1996A Bonds at a purchase price of
$62,394,566.40 plus accrued interest to date of delivery less
original issue discount of $1,658,185.85, (b) the Series 1996B
Bonds at a purchase price of $3,730,972.80 plus accrued interest to
date of delivery less original issue discount of $874.20, and (c)
the Series 1997 Bonds at a purchase price of $5,864,374.80 plus
accrued interest to date of delivery less original issue discount
of $130,852.80, and the rates of interest set by the Underwriter do
not exceed the maximum rates of interest for any year over the life
of the Series 1996A Bonds, the Series 1996B Bonds and the Series
1997 Bonds as set forth in the 1996 Resolution and the Series 1996A
Bonds, the Series 1996B Bonds and the Series 1997 Bonds shall bear
interest from date at the rates per annum hereinafter set forth,
and the sale of the Series 1996A, Series 1996B Bonds and Series
1997 Bonds at such prices will provide the Consolidated Government
with sufficient funds to finance the cost of the overall
undertaking now contemplated by the Consolidated Government as set
forth in the 1996 Resolution; and
WHEREAS, it was provided in the 1996 Resolution authorizing
the issuance of the Series 1996/1997 Bonds that subsequent to the
sale of the Series 1996/1997 Bonds the Consolidated Government
would adopt a supplemental resolution specifying, among other
things, the aggregate principal amount of each series of bonds, the
interest rate or rates that the bonds would bear, the principal
amount to mature in each year and the maturities of said bonds
which will be designated as term bonds and subject to mandatory
redemption, would designate the representative of the original
purchaser of said bonds and would provide for the actual issuance
and delivery of the bonds to the purchaser upon payment of the
agreed purchase price therefor by said purchaser; and
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WHBREAS, the Bonds should now be printed and thereafter
executed, issued and delivered; and
WHEREAS, in order to receive a more favorable rating and more
favorable interest rates on the Series 1996/1997 Bonds, the
Consolidated Government will obtain a municipal bond new issue
insurance policy (the "Bond Insurance Policy") for the Series
1996/1997 Bonds from Financial Guaranty Insurance Company, a New
York stock insurance company (the "Bond Insurer"); and
WHEREAS, the Consolidated Government desires to change the
dated date of the Series 1996A Bonds and the Series 1996B Bonds
from November 15, 1996 to December 1, 1996; and
WHEREAS, the Consolidated Government desires to indicate more
specifically the optional redemption provisions applicable to the
Series 1997 Bonds set forth in the 1996 Resolution; and
HOW, THEREFORE, BB IT RESOLVED by the Augusta-Richmond County
commission of Richmond County and it is hereby resolved by
authority of same, that $62,880,000 aggregate principal amount of
Richmond County Water and Sewerage Revenue Refunding and
Improvement Bonds, Series 1996A, shall be issued and mature on
October 1 of the years set forth below and shall bear interest from
date at the rate per annum set forth below opposite each principal
maturity:
Ye..a.I: Amount RaU Ye..a.I: Amount RaU
1997 $ 265,000 3.60% 2006 $ 1,260,000 6.00 %
1998 350,000 3.80 2007 1,335,000 6.00
1999 365,000 4.00 2008 1,415,000 4.90
2000 375,000 4.10 2009 1,485,000 5.00
2001 395,000 4.20 2010 1,560,000 5.10
2002 410,000 4.30 2012 3,355,000 5.00
2003 1,100,000 4.40 2017 10,000,000 5.125
2004 1,155,000 4.50 2022 13,305,000 5.25
2005 1,205,000 4.60 2028 23,545,000 5.25
and all interest shall be payable April 1, 1997 and semiannually
thereafter on the 1st days of April and October in each year.
BB IT FURTHER RESOLVED by the authority aforesaid and it is
hereby resolved by authority of same, that $3,760,000 aggregate
principal amount of Richmond County Taxable Water and Sewerage
Revenue Refunding Bonds, Series 1996B, shall be issued and mature
on October 1 of the years set forth below and shall bear interest
from date at the rate per annum set forth below opposite each,
principal maturity:
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1997
1998
1999
2000
2001
2002
Amount
$655,000
585,000
605,000
610,000
640,000
665,000
Rate
5.60%
5.80
5.90
6.10
6.20
6.25
and all interest shall be payable April 1, 1997 and semiannually
thereafter on the 1st days of April and October in each year.
BE IT FURTHER RESOLVED by the authority aforesaid and it is
hereby resolved by authority of same, that $5,910,000 aggregate
principal amount of Richmond County Water and Sewerage Revenue
Refunding Bonds, Series 1997, shall be issued and mature on
October 1 of the years set forth below and shall bear interest from
date at the rate per annum set forth below opposite each principal
maturity:
xe.su: Amount Rate xe.su: Amount Ra.t..e.
1997 $100,000 3.60% 2006 $ 190,000 4.70 %
1998 140,000 3.80 2007 200,000 4.80
1999 145,000 4.00 2008 210,000 4.90
2000 150,000 4.10 2009 220,000 5.00
2001 155,000 4.20 2010 230,000 5.10
2002 160,000 4.30 2012 500,000 5.00
2003 170,000 4.40 2017 1,490,000 5.125
2004 175,000 4.50 2021 1,490,000 5.25
2005 185,000 4.60
and all interest shall be payable April 1, 1997 and semiannually
thereafter on the 1st days of April and October in each year.
BE IT FURTHER RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of same, that the $3,355,000 aggregate
principal amount of the Series 1996A Bonds maturing October 1, 2012
are hereby made subject to mandatory redemption prior to maturity
on October 1, 2011 in the principal amount of $1,635,000 (leaving
$1,720,000 to mature October 1, 2012), in part, by lot in such
manner as may be designated by the Bond Registrar, at par plus
accrued interest to the redemption date.
BB IT FURTHER RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of same, that the $10,000,000
aggregate principal amount of the Series 1996A Bonds maturing
October 1, 2017 are hereby made subject to mandatory redemption
prior to maturity on October 1, 2013 and on each succeeding October
1 to and including October 1, 2016, in part, by lot in such manner
as may be designated by the Bond Registrar, at par plus accrued
interest to the redemption date, in the following principal amounts
on October 1, in the years as follows:
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2013
2014
2015
2016
Amount
$1,805,000
1,895,000
1,995,000
2,100,000
(Leaving $2,205,000 to mature October 1, 2017)
BB IT FURTHER RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of same, that the $13,305,000
aggregate principal amount of the Series 1996A Bonds maturing
October 1, 2022 are hereby made subject to mandatory redemption
prior to maturity on October 1, 2018 and on each succeeding October
1 to and including October 1, 2021, in part, by lot in such manner
as may be designated by the Bond Registrar, at par plus accrued
interest to the redemption date, in the following principal amounts
on October 1, in the years as follows:
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2018
2019
2020
2021
Amount
$2,320,000
2,440,000
2,570,000
2,705,000
(Leaving $3,270,000 to mature October 1, 2022)
BB IT FURTHER RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of same, that the $23,545,000
aggregate principal amount of the Series 1996A Bonds maturing
October 1, 2028 are hereby made subject to mandatory redemption
prior to maturity on October 1, 2023 and on each succeeding October
1 to and including October 1, 2027, in part, by lot in such manner
as may be designated by the Bond Registrar, at par plus accrued
interest to the redemption date, in the following principal amounts
on October 1, in the years as follows:
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2023
2024
2025
2026
2027
Amount
$3,440,000
3,620,000
3,810,000
4,010,000
4,220,000
(Leaving $4,445,000 to mature October 1, 2028)
BB IT FURTHER RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of same, that the $500,000 aggregate
principal amount of the Series 1997 Bonds maturing October 1, 2012
are hereby made subject to mandatory redemption prior to maturity
on October 1, 2011, in the principal amount of $245,000 (leaving
$255,000 to mature October 1, 2012), in part, by lot in such manner
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as may be dsignated by the Bond Registrar, at par plus accrued
interest to the redemption date.
BE IT FURTHER RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of same, that the $1,490,000 aggregate
principal amount of the Series 1997 Bonds maturing October 1, 2017,
are hereby made subject to mandatory redemption prior to maturity
on October 1 , 2013 , and on each succeeding October 1, to and
including October 1, 2016, in part, by lot in such manner as may be
designated by the Bond Registrar, at par plus accrued interest to
the redemption date, iri the following principal amounts on October
1, in the years as follows:
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2013
2014
2015
2016
Amount
$270,000
285,000
295,000
310,000
(Leaving $330,000 to mature October 1, 2017)
BE IT PURTHER RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of same, that the $1,490,000 aggregate
principal amount of the Series 1997 Bonds maturing October 1, 2021
are hereby made subject to mandatory redemption prior to maturity
on October 1, 2018, and on each succeeding October 1, to and
including October 1, 2020, in part, by lot in such manner as may be
designated by the Bond Registrar, at par plus accrued interest to
the redemption date, in the following principal amounts on October
1, in the years as follows:
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2018
2019
2020
Amount
$345,000
365,000
380,000
(Leaving $400,000 to mature October 1, 2021)
and the Series 1996/1997 Bonds subject to mandatory redemption as
aforesaid shall be redeemed in the same manner and procedure as set
forth in Article III, Section 2 of the 1996 Resolution pertaining
to the optional redemption of said Series 1996/1997 Bonds.
BE IT FURTHER RESOLVED by
hereby resolved by authority of
1996/1997 Bonds as set forth
amended so as to set forth the
to mandatory redemption and the
each year.
the authority aforesaid, and it is
same, that the forms of the Series
in the 1996 Resolution shall be
bonds which are term bonds subject
principal amounts to be redeemed in
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BB IT PURTHER RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of the same, that the Consolidated
Government hereby accepts and approves the offer of the Underwriter
to purchase the Series 1996/1997 Bonds pursuant to the terms and
conditions set forth in the Bond Purchase Agreement, dated
December 3, 1996, by and between the Consolidated Government and
the Underwriter in the form presented at its meeting on December 3,
1996 and hereby authorizes and directs the Mayor of the
Consolidated Government to execute and deliver such Bond Purchase
Agreement for and on behalf of the Consolidated Government with
such changes as the Mayor deems necessary and the Clerk of the
Consolidated Government be and is hereby authorized and directed to
attest the same.
BB IT PURTHER RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of same, that for the purpose of this
resolution and the 1996 Resolution authorizing the issuance of the
Series 1996/1997 Bonds, the terms "original purchaser, "
"representative of the original purchaser" and "designated
representative of the original purchaser" of the Series 1996/1997
Bonds shall be construed to mean the Underwriter, its successors or
assigns.
BB IT PURTHER RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of same, that all of the Series
1996/1997 Bonds be delivered against payment to the original
purchaser on the date and at the place as may be mutually agreed
upon by the designated representative of the original purchaser and
the Consolidated Government.
BB IT PURTHER RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of same, that Article I of the Bond
Resolution is hereby amended to provide for the following
definitions:
"Bond Insurer" shall mean Financial Guaranty Insurance Company,
a New York stock insurance company, or any successor thereto.
"Bond Insurance Policy" shall mean the municipal bond new issue
insurance policy issued by the Bond Insurer that guarantees payment
of principal of and interest on the Series 1996/1997 Bonds.
BB IT FURTHER RESOLVED, by the authority aforesaid, and it is.
hereby resolved by authority of the same, that the following
provisions shall apply with respect to the Bond Insurer (the
capitalized terms herein having the same meanings as in the 1996
,Resolution unless otherwise specified):
1. The Bond Insurer shall be provided with the following
information:
( i)
Within 120 days after the end of the Consolidated
Government's Fiscal Year, budget for the new year,
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196895.1
(ii)
(iii)
(iv)
(v)
annual audited financial statements, a statement
of the amount on deposit in the Debt Service
Reserve Account as of the last valuation, and, if
not presented in the audited financial statements,
a statement of the revenues pledged to the payment
of the Series 1996/1997 Bonds in each such Fiscal
Year;
Official statement or other disclosure, if any,
prepared in connection with the issuance of
additional debt, whether or not it is on parity
with the Series 1996/1997 Bonds within 30 days
after the sale thereof;
Notice of any draw upon or deficiency due to
market fluctuation in the amount, if any, on
deposit in the Debt Service Reserve Account:
Notice of the redemption, other than mandatory
sinking fund redemption, of any of the Series
1996/1997 Bonds, or of. any advance refunding of
the Series 1996/1997 Bonds, including the
principal amount, maturities and CUSIP numbers
thereof;
Simultaneously with the delivery of the annual
audited financial statements:
(A) The number of System users as of the end
of the Fiscal Year;
(B) Notification of the withdrawal of any
System user comprising 5 percent of more
of System sales measured in terms of
revenue dollars since the last reporting
date;
(C) Any significant plant retirements or
expansions planned or undertaken since
the last reporting date;
(D) Maximum and average daily usage for the
Fiscal Year;
(E) Updated capital plans for expansion and
improvement projects;
(F) Results of annual engineering
inspections, if any, occurring at the end
of the Fiscal Year; and
Such additional information as the Bond Insurer
may reasonably request from time to time.
So long as the Bond Insurer is not in default in its
payment obligations under the Bond Insurance POlicy, any
credit instrument provided in lieu of a cash deposit into
the Debt Service Reserve Account shall conform to the
\ (vi)
2.
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8.
9.
requirements set forth in Exhibit A hereto in addition to
those requirements set forth in the 1996 Resolution. If
the requirements of Exhibit A and the 1996 Resolution
conflict, the requirements set forth in Exhibit A shall
control.
3.
Article III, section 2 of the 1996 Resolution is hereby
amended by adding the following sentence as the last
paragraph thereof: Notice of any redemption of Series
1996/1997 Bonds shall either (i) explicitly state that
the proposed redemption is conditioned on there being on
deposit in the applicable fund account on the redemption
date sufficient money to pay the full redemption price of
the Series 1996/1997 Bonds to be redeemed or (ii) be sent
only if sufficient money to pay the full redemption price
of the Series 1996/1997 Bonds to be redeemed is on
deposit in the applicable fund or account.
4.
To the extent there are no other available funds held
under the 1996 Resolution, the Bond Registrar and Paying
Agent shall use the remaining funds in the Construction
Fund to pay principal of and interest on the Series
1996/1997 Bonds in the event of a payment default.
Any acceleration of the Series 1996/1997 Bonds or any
annulment thereof shall be subject to the prior written
consent of the Bond Insurer (if the Bond Insurer has not
failed to comply with its payment obligations under the
Bond Insurance Policy).
5.
6.
The Bond Insurer shall receive immediate notice of any
payment default and notice of any other default known to
the Bond Registrar or paying Agent within 30 days of
their knowledge thereof.
7.
For all purposes of the 1996 Resolution provisions
governing events of default and remedies, except the
gi ving of notice of default to bondholders, the Bond
Insurer shall be deemed to be the sole holder of the
Series 1996/1997 Bonds for so long as the Bond Insurer
has not failed to comply with its payment obligations
under the Bond Insurance Policy.
No resignation or removal of the Paying Agent shall
become effective until a successor has been appointed and
has accepted the duties of Paying Agent. The Bond
Insurer shall be furnished with written notice of the
resignation or removal of the Paying Agent and Bond
Registrar and the appointment of any successor thereto.
The Bond Insurer shall be included as a party in interest
and as a party entitled to (i) notify the Consolidated
Government or any applicable receiver of the occurrence
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196895.1
of an event of default and (ii) request the receiver to
intervene in judicial proceedings that affect the Series
1996/1997 Bonds or the security therefor. The receiver
shall be required to accept notice of default from the
Bond Insurer.
10. So long as the Bond Insurer is not in default in its
payment obligations under the Bond Insurance POlicy, any
amendment or supplement to the 1996 Resolution and all
other principal financing documents shall be subject to
the prior written consent of the Bond Insurer. Any
rating agency rating the Series 1996/1997 Bonds must
receive notice of each amendment and a copy thereof at
last 15 days in advance of its execution or adoption.
The Bond Insurer shall be provided with a full transcript
of all proceedings relating to the execution of any such
amendment or supplement.
11. So long as the Bond Insurer is not in default in its
payment obligations under the Bond Insurance POlicy, only
cash, direct non-callable obligations of the United
States of America and securities fully and
unconditionally guaranteed as to the timely payment of
principal and interest by the United States of America,
to which direct obligation or guarantee the full faith
and credit of the United States of America has been
pledged, Refcorp interest strips, CATS, TIGRS, STRPS, or
defeased municipal bonds rated AAA by S&P or Aaa by
Moody's (or any combination thereof) shall be used to
effect defeasance of the Series 1996/1997 Bonds unless
the Bond Insurer otherwise approves. In the event of an
advance refunding, the Consolidated Government shall
cause to be delivered a verification report of an
independent nationally recognized certified public
accountant. If a forward supply contract is employed in
connection with the refunding, (i) such verification
report shall expressly state that the adequacy of the
escrow to accomplish the refunding project relies solely
on the initial escrowed investments and the maturing
principal thereof and interest income thereon and does
not assume performance under or compliance with the
forward supply contract, and (ii) the applicable escrow
agreement shall provide that in the event of any
discrepancy or difference between the terms of the
forward supply contract and the escrow agreement and the
1996 Resolution, the terms of the escrow agreement and
the 1996 Resolution shall be controlling.
12. (i) If, on the third day preceding any Interest Payment
Date for the Series 1996/1997 Bonds, there is not
on deposit with the Sinking Fund Custodian
sufficient moneys available to pay all principal of
and interest on the Series 1996/1997 Bonds due on
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such date, the Sinking Fund CUstodian shall
immediately notify the Bond Insurer and state
street Bank and Trust Company, N.A., New York, New
York or its successor as its Fiscal Agent (the
MFiscal Agent") of the amount of such deficiency.
If, by said Interest Payment Date, the Consolidated
Government has not provided the amount of such
deficiency, the Bond Registrar shall simultaneously
make available to the Bond Insurer and to the
Fiscal Agent the registration books for the series
1996/1997 Bonds maintained by the Bond Registrar.
In addition:
(A)
(B)
196895.1
The Bond Registrar and Paying Agent shall
provide the Bond Insurer with a list of the
Bondholders entitled to receive principal or
interest payments from the Bond Insurer under
the terms of the Bond Insurance Policy and
shall make arrangements for the Bond Insurer
and its Fiscal Agent (1) to mail checks or
drafts to Bondholders entitled to receive full
or partial interest payments from the Bond
Insurer and (2) to pay principal of the Series
1996/1997 Bonds surrendered to the Fiscal
Agent by the Bondholders entitled to receive
full or partial principal payments from the
Bond Insurer; and
The Bond Registrar and Paying Agent shall, at
the time they make the registration books
available to the Bond Insurer pursuant to (A)
above, notify Bondholders entitled to receive
the payment of principal of or interest on the
Series 1996/1997 Bonds from the Bond Insurer
(1) as to the fact of such entitlement, (2)
that the Bond Insurer will remit to them all
or part of the interest payments coming due
subject to the terms of the Bond Insurance
POlicy, (3) that, except as provided in
paragraph (ii) below, in the event that any
Bondholder is entitled to receive full payment
of principal from the Bond Insurer, such
Bondholder must tender his Series 1996/1997
Bond with the instrument of transfer in the
form provided on the Series 1996/1997 Bond
executed in the name of the Bond Insurer, and
(4) that, except as provided in paragraph (ii)
below~ in the event that such Bondholder is
entitled to receive partial payment of
principal from the Bond Insurer, such
Bondholder must tender his Series 1996/1997
Bond for payment first to the Paying Agent,
which shall note on such Series 1996/1997 Bond
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196895.1
the portion of principal paid by the Paying
Agent, and then, with an acceptable form of
assignment executed in the name of the Bond
Insurer, to the Fiscal Agent, which will then
pay the unpaid portion of principal to the
Bondholder subject to the terms of the Bond
Insurance Policy.
(ii) In the event that the Bond Registrar or Paying
Agent has notice that any payment of principal
of or interest on a series 1996/1997 Bond has
been recovered from a Bondholder pursuant to
the United states Bankruptcy Code by a trustee
in bankruptcy in accordance with the final,
nonappealable order of a court having
competent jurisdiction, the Bond Registrar and
Paying Agent shall furnish to the Bond Insurer
their records evidencing the payments of
principal of and interest on the Series
1996/1997 Bonds which have been made by the
Bond Registrar or Paying Agent and
subsequently recovered from Bondholders, and
the dates on which such payments were made.
13. The notice addresses for the Bond Insurer and the Fiscal
Agent are:
Financial Guaranty Insurance Company
115 Broadway
New York, New York 10006
Attention: General Counsel
state street Bank and Trust Company, N.A.
61 Broadway
New York, New York 10006
Attention: Corporate Trust Department
14.
So long as the Bond Insurer is not in default in its
payment obligations under the Bond Insurance Policy, for
all purposes, variable rate indebtedness shall be assumed
to bear interest at the highest of: (i) the actual rate
on the date of calculation, or if the indebtedness is not
yet outstanding, the initial rate (if established and
binding), (ii) if the indebtedness has been outstanding
for at least twelve months, the average rate over the
twelve months immediately preceding the date of
calculation, and (iii) (1) if interest on the indebtedness
is excludable from gross income under the applicable
provisions of the Internal Revenue Code, the most
recently published Bond Buyer 25 Bond Revenue Index (or
comparable index if no longer published) plus 50 basis
points, or (2) if interest is not so excludable, the
interest rate on direct u.s. Treasury Obligations with
comparable maturities plus 50 basis points; provided,
-12-
however, that for purposes of any rate covenant measuring
actual debt service coverage during a test period,
variable rate indebtedness shall be deemed to bear
interest at the actual rate per annum applicable during
the test period.
15. So long as the Bond Insurer is not in default in its
payment obligations under the Bond Insurance pOlicy,
utilization of the synthetic fixed rate under a Hedge
Agreement with respect to a swap for purposes of
performing any required calculations under the 1996
Resolution shall be permitted only if the 1996 Resolution
and the applicable swap satisfy the requirements of
Exhibit B hereto.
BB IT PURTHER RESOLVED, by the authority aforesaid, and it is
hereby resolved by authority of same, that Article III, Section 1
Paragraph (b) of the 1996 Resolution be deleted in its entirety and
in lieu thereof a new Paragraph (b) be substituted as follows:
(b) The Series 1997 Bonds may be
redeemed at the option of the Consolidated
Government in whole at any time or in part on
any Interest Payment Date, in any year not
earlier than October 1, 2006, from any moneys
which may be available for such purpose and
deposited with the Paying Agent on or before
the date fixed for redemption. The optional
redemption of Series 1997 Bonds shall be made
by the payment of the principal amount of the
Series 1997 Bonds to be redeemed and accrued
interest thereon to date of redemption,
together with a premium of 2 percent of such
principal amount if redeemed on or prior to
September 30, 2007; 1 percent of such
principal amount if redeemed thereafter and on
or prior to september 30, 2008; and at par
without a premium if redeemed thereafter and
before maturity.
BE IT PURTHER RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of same, that the following sentence
be added as the first sentence of the last paragraph of Article V,
Section 2, paragraph 6 of the 1996 Resolution:
"It is expressly provided that indebtedness of the
Consolidated Government to the Georgia Environmental
Facilities Authority, which ranks as to lien on the Pledged
Revenues junior and subordinate to the lien securing the
Series 1996/1997 Bonds authorized to be issued hereunder,
shall be paid from moneys remaining in the Revenue Fund after
the required payments have been made to Sinking Fund No. 2 and
196895.1
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prior to the payments made pursuant to this Paragraph 6 to the
utility General Fund".
BB IT PURTBER RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of same, that the following paragraph
be added as the last subparagraph of the definition of Permitted
Investments set forth in Article I of the 1996 Resolution:
(ix) any other investments if and to the extent the same
are at the time legal for investment of Consolidated
Government funds and are consented to by the Bond Insurer.
BB IT PURTRBR RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of same, that all of the terms,
conditions, provisions and covenants of the 1996 Resolution
authorizing the issuance of the Series 1996/1997 Bonds are hereby
ratified and reaffirmed and the 1996 Resolution is hereby amended
and supplemented as herein provided.
BB IT PURTBER RESOLVED by the authority aforesaid, and it is
hereby resolved by authority of same, that any and all resolutions
or parts of resolutions in conflict with this resolution this day
adopted be and the same are hereby repealed.
196895.1
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EXHIBIT A
RESERVE ACCOUNT SURETY GUIDELINES
The Consolidated Government may satisfy the requirement (the
"Reserve Account Requirement") to deposit a specified amount in the
Debt Service Reserve Account (the "Reserve Account") by the deposit
of a surety bond, insurance policy or letter of credit as set forth
below. The following requirements are hereby incorporated in the
1996 Resolution in the event the Reserve Account Requirement with
respect to the Series 1996/1997 Bonds is fulfilled by a deposit of
a credit instrument (other than a credit instrument issued by the
Bond Insurer) in lieu of cash:
A. A surety bond or insurance policy issued to the entity serving
as trustee or paying agent (the "Fiduciary"), as agent of the
bondholders, by a company licensed to issue an insurance
policy guaranteeing the timely payment of debt service on the
Series 1996/1997 Bonds (a "municipal bond insurer") may be
deposited in the Reserve Account to meet the Reserve Account
Requirement if the claims paying ability of the issuer thereof
shall be rated "AAA" or "Aaa" by S&P or Moody's, respectively.
B. A surety bond or insurance policy issued to the Fiduciary, as
agent of the bondholders, by an entity other than a municipal
bond insurer may be deposited in the Reserve fund to meet the
Reserve Account Requirement if the form and substance of such
instrument and the issuer thereof shall be approved by the
Bond Insurer.
C. An unconditional irrevocable letter of credit issued to the
Fiduciary, as agent of the Bondholders, by a bank may be
deposited in the Reserve Account to meet the Reserve Account
Requirement if the issuer thereof is rated at least "AA" by
S&P. The letter of credit shall be payable in one or more
draws upon presentation by the beneficiary of a sight draft
accompanied by its certificate that it then holds insufficient
funds to make a required payment of principal or interest on
the Series 1996/1997 Bonds. The draws shall be payable within
two days of presentation of the sight draft. The letter of
credit shall be for a term of not less than three years. The
issuer of the letter of credit shall be required to notify the
Consolidated Government and the Fiduciary, not later than 12
months prior to the stated expiration date of the letter of
credit, as to whether such expiration date shall be extended,
and if so, shall indicate the new expiration date.
If such notice indicates that the expiration date shall not be
extended, the Consolidated Government shall deposit in the
Reserve Account an amount sufficient to cause the cash or
permitted investments on deposit in the Reserve Account
together with any other qualifying credit instruments, to
196895.1
196895.1
..
equal the Reserve Account Requirement on all outstanding
series 1996/1997 Bonds, such deposit to be paid in equal
installments on at least a semi-annual basis over the
remaining term of the letter of credit, unless the Reserve
Account credit instrument is replaced by a Reserve Account
credit instrument meeting the requirements in any of 1 through
3 above. The letter of credit shall permit a draw in full not
less than two weeks prior to the expiration or termination of
such letter of credit if the letter of credit has not been
replaced or renewed. The Authorizing Document shall, in turn,
direct the Fiduciary to draw upon the letter of credit prior
to its expiration or termination unless an acceptable
replacement is in place or the Reserve Account is fully funded
in its required amount.
D.
The use of any Reserve Account credit instrument pursuant to
this Paragraph shall be subject to receipt of an opinion of
counsel acceptable to the Bond Insurer and in form and
substance satisfactory to the Bond Insurer as to the due
authorization, execution, delivery and enforceability of such
instrument in accordance with its terms, subject to applicable
laws affecting creditors' rights generally, and, in the event
the issuer of such credit instrument is not a domestic entity,
an opinion of foreign counsel in form and substance
satisfactory to the Bond Insurer. In addition, the use of an
irrevocable letter of credit shall be subject to receipt of an
opinion of counsel acceptable to the Bond Insurer and in form
and substance satisfactory to the Bond Insurer to the effect
that payments under such letter of credit would not constitute
avoidable preferences under Section 547 of the u.S. Bankruptcy
Code or similar state laws with avoidable preference
provisions in the event of the filing of a petition for relief
under the u.S. Bankruptcy Code or similar state laws by or
against the issuer of the bonds (or any other account party
under the letter of credit).
E.
The obligation to reimburse the issuer of a Reserve Account
credit instrument for any fees, expenses, claims or draws upon
such Reserve Account credit instrument shall be subordinate to
the payment of debt service on the Series 1996/1997 Bonds.
The right of the issuer of a Reserve Account credit instrument
to payment or reimbursement of its fees and expenses shall be
subordinated to cash replenishment of the Reserve Account,
and, subject to the second succeeding sentence, its right to
reimbursement for claims or draws shall be on a parity with
the cash replenishment of the Reserve Account. The Reserve
Account credit instrument shall provide for a revolving
feature under which the amount available thereunder will be
reinstated to the extent of any reimbursement of draws or
claims paid. If the revolving feature is suspended or
terminated for any reason, the right of the issuer of the
Reserve Account credit instrument to reimbursement will be
further subordinated to cash replenishment of the Reserve
A-2
196895.1
Account to an amount equal to the difference between the full
original amount available under the Reserve Account credit
instrument and the amount then available for further draws or
claims. If (a) the issuer of a Reserve Account cadit
instrument becomes insolvent or (b) the issuer of a Reserve
Account credit instrument defaults in its payment obligations
thereunder or (c) the claims-paying ability of the issuer of
the insurance policy or surety bond falls below a S&P "AAA" or
a Moody's "Aaa" or (d) the rating of the issuer of the letter
of credit falls below a S&P "AA," the obligation to reimburse
the issuer of the Reserve Account credit instrument shall be
subordinate to the cash replenishment of the Reserve Account.
F.
If (a) the revolving reinstatement feature described in the
preceding paragraph is suspended or terminated or (b) the
rating of the claims paying ability of the issuer of the
surety bond or insurance policy falls below a S&P "AAA" or a
Moody's "Aaa" or (c) the rating of the issuer of the letter of
credit falls below a S&P "AA," the Consolidated Government
shall either (i) deposit into the Reserve Account an amount
sufficient to cause the cash or permitted investments on
deposit in the Reserve Account to equal the Reserve Account
Requirement on all outstanding Series 1996/1997 Bonds, such
amount to be paid over the ensuing five years in equal
installments deposited at least semi-annually or (ii) replace
such instrument with a surety bond, insurance policy or letter
of credit meeting the requirements in any of 1 through 3 above
within six months of such occurrence. In the event (a) the
rating of the claims-paying ability of the issuer of the
surety bond or insurance policy falls below "A" or (b) the
rating of the issuer of the letter of credit falls below "A"
or (c) the issuer of the Reserve Account credit instrument
defaults in its payment obligations or (d) the issuer of the
Reserve Account credit instrument becomes insolvent, the
Consolidated Government shall either (i) deposit into the
Reserve Account an amount sufficient to cause the cash or
permitted investments on deposit in the Reserve Account to
equal the Reserve Account Requirement on all Outstanding
Series 1996/1997 Bonds, such amount to be paid over the
ensuing year in equal installments on at last a monthly basis
or (ii) replace such instrument with a surety bond, insurance
policy or letter of credit meeting the requirements of 1
through 3 above within six months of such occurrence.
G.
Where applicable, the amount available for draws or claims
under the Reserve Account credit instrument may be reduced by
the amount of cash or permitted investments deposited in the
Reserve Account pursuant to clause ( i) of the preceding
subparagraph F.
H.
If the Consolidated Government chooses the above described
alternatives to a cash-funded Reserve Account, any amounts
owed by the Consolidated Government to the issuer of such
A-3
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196895.1
credit instrument as a result of a draw thereon or a claim
thereunder, as appropriate, shall be included in any
calculation of Debt Service Requirements required to be made
pursuant to the 1996 Resolution for any purpose, e.g., rate
covenant or additional bonds test.
I.
The Fiduciary shall ascertain the necessity for a claim or
draw upon the Reserve Account credit instrument and to provide
notice to the issuer of the Reserve Account credit instrument
in accordance with its terms not later than three days (or
such longer period as may be necessary depending on the
permitted time period for honoring a draw under the Reserve
Account credit instrument) prior to each Interest Payment
Date.
Cash on deposit in the Reserve Account shall be used (or
investments purchased with such cash shall be liquidated and
the proceeds applied as required) prior to any drawing on any
Reserve Account credit instrument. If and to the extent that
more than one Reserve Account credit instrument is deposited
in the Reserve Account, drawings thereunder and repayments of
costs associated therewith shall be made on a pro rata basis,
calculated by reference to the maximum amounts available
thereunder.
A-4
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EXHIBIT B
SWAP PROVIDER GUIDELINES
Any Swap entered into in connection with the issuance or
incurrence by the Consolidated Government of variable rate
indebtedness secured with the Series 1996/1997 Bonds by a parity
lien on the Pledged Revenues shall meet the following guidelines
and, for purposes of calculating UDebt Service" and establishing
compliance with financial covenants under the 1996 Resolution shall
be treated as follows:
A. Long--Dated Swaps--Term or Weighted Averaqe Maturity of Ten
Years or More.
1. The Swap provider must be rated at least A-/A3 or better
by Standard & Poor's and Moody's (the UInitial Rating
Requirement") .
2. Assuming satisfaction of the Initial Rating Requirement,
and thereafter as long as the long term indebtedness of
the Swap provider or the claims paying ability of the
Swap provider does not fall below Baa2 or BBB by either
Standard & Poor's or Moody's (the uMinimum Rating
Requirement"), all interest rate assumptions for purposes
of establishing or demonstrating compliance with a
financial covenant (~.g. rate covenant, reserve
requirement, additional bonds test, asset transfer test,
etc.) may be based upon the synthetic fixed interest rate
under the Swap.
Failure to maintain a Swap provider holding the Minimum
Rating Requirement or, if the Consolidated Government
elects, failure to replace any such Swap provider by
another Swap provider which holds the Initial Rating
Requirement within ten business days, will have the
following effects: (1) compliance with any required rate
covenant for the preceding Fiscal Year will be based on
the actual interest paid on the Variable Rate
Indebtedness during such Fiscal Year without regard to
the Swap; (2) in the case of any required Debt Service
Reserve Account, the amount required to be on deposit
therein will be re-calculated based on the formula
described in paragraph 14 of the provisions relating to
the Bond Insurer in this Resolution, calculated as of the
date of original issuance of the variable rate
indebtedness and any resulting deficiency will be
restored wi thin the same one year restoration period
established in the bond documentation for curing Debt
Service Reserve Account deficiencies; and (3) any
uforward-looking" financial covenant based upon uOebt
196895.1
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.
Service," "Annual Debt Service" or "Maximum Annual Debt
Service" will be based upon the formula described in
paragraph 14 of the provisions relating to the Bond
Insurer in this Resolution, calculated as of the date the
required calculation is made.
B. Short Dated Swaps Having Terms or Weighted Average Maturities
of Ten Years or Less, Whereupon Related Bonds Automatically
Convert to a Pre-Set Fixed Rate.
196895.1
The embedded Swap provider must meet the Initial Rating
Requirement. with respect to financial covenants, the
synthetic fixed rate based on the Swap may be utilized for
purposes of demonstrating or establishing compliance with the
applicable covenant. Failure to maintain a Swap provider
holding the Minimum Rating Requirement during the embedded
Swap period will require replacement of the Swap provider
within ten business days. Failure to replace will require re-
calculation of the applicable financial covenants in the
manner outlined in A.2 above.
B-2
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CLERK'S CERTIPICATE
GEORGIA, RICBKOND COUNTY
I, Lena Bonner, Clerk of the Augusta-Richmond County
commission (the "commission"), DO HEREBY CERTIPY that the foregoing
pages constitute a true and correct copy of the resolution adopted
by said Commission at an open public meeting duly called and
lawfully assembled at 2:00 p.m., on the 3rd day of December, 1996,
supplementing the resolution authorizing the issuance of
$62,880,000 Richmond County Water and Sewerage Revenue Refunding
and Improvement Bonds, Series 1996A, $3,760,000 Richmond County
Taxable Water and Sewerage Revenue Refunding Bonds, Series 1996B
and $5,910,000 Richmond County Water and Sewerage Revenue Refunding
Bonds, Series 1997, the original of said resolution being duly
recorded in the Minute Book of said commission, which Minute Book
is in my custody and control.
I do hereby further certify that the following members of said
Commission were present at said meeting:
Lee Beard
Wi 1 1 i::lrn KlInl kp r Tr
Ulmer Bridges
William H. Mays. III
Henry Brigham
James B. Powell
Jerry Brigham
Mo!';e.!'; Todd
Freddie Lee Handv
Rohe.rt 7,e.tte.rhe.rr
and that the following members were absent:
and that said resolution was duly adopted by a vote of
Aye
]0
Nay
Abstain
,;" .../ '
~SS my hand and the official seal of Richmond County this
day of December, 1996. ~ay#~
the
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