1987-01 Water and Sewer PlantRESOLUTION NO. 87-1
A RESOLUTION AUTHORIZING THE CONSTRUCTION AND
ACQUISITION OF ADDITIONS, EXTENSIONS AND
IMPROVEMENTS TO THE WATER AND SEWER SYSTEM AND
• THE REFUNDING OF CERTAIN OUTSTANDING OBLIGATIONS
OF THE CITY; PROVIDING FOR THE ISSUANCE OF NOT
EXCEEDING $9,885,000 WATER AND SEWER REFUNDING AND
IMPROVEMENT REVENUE BONDS, SERIES 1987 OF THE CITY TO
BE APPLIED TO PAY THE PRINCIPAL AND INTEREST IN
RESPECT TO SAID PRESENTLY OUTSTANDING OBLIGATIONS
AND THE COST OF SUCH ADDITIONS, EXTENSIONS AND
IMPROVEMENTS; PROVIDING FOR THE PAYMENT OF THE
REFUNDING BONDS FROM THE NET REVENUES OF SAID
WATER AND SEWER SYSTEM, TOGETHER WITH CERTAIN
OTHER REVENUES, AND INCLUDING COVENANTS AND
AGREEMENTS IN CONNECTION THEREWITH; PROVIDING FOR
THE ISSUANCE OF ADDITIONAL BONDS HEREUNDER IN
CERTAIN EVENTS; AND PROVIDING AN EFFECTIVE DATE.
FLORIDA:
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OKEECHOBEE,
Section 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is
enacted pursuant to Chapter 166, Part II, Florida Statutes, and other applicable provisions
of law.
Section 2. DEFINITIONS. The following terms shall have the following
meanings herein, unless the text otherwise expressly requires. Words importing singular
number shall include the plural number in each case and vice versa, and words importing
persons shall include firms and corporations.
"Act" shall mean Chapter 166, Part II, Florida Statutes, and other applicable
provisions of law.
"Additional Bonds" shall mean Bonds issued on a parity with the Series 1987
Bonds under Section 16R hereof.
"Amortization Installments" with respect to any Term Bonds of a series, shall
mean an amount or amounts so designated which is or are established for the Term Bonds
of such series, provided that (i) each such installment shall be deemed to be due on such
interest or principal maturity date of each applicable year as is fixed by resolution of the
Issuer and shall be a multiple of $5,000 principal amount, and (ii) the aggregate of such
installments for such series shall equal the aggregate principal amount of Term Bonds of
such series authenticated and delivered on original issuance.
"Authorized Investments" shall mean any of the following if and to the extent
the same are at the time legal for investment of municipal funds: (a) direct obligations of
or obligations, the principal of and interest on which are unconditionally guaranteed by
the United States of America; (b) bonds, debentures, notes or other evidence of
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Rev.01/16/87
indebtedness payable in cash issued by any of the following agencies whose obligations
represent full faith and credit of the United States of America: the Export -Import Bank of
the United States, the Federal Financing Banks, Farmers Home Administration, Maritime
• Administration, Public Housing Authority and the Government National Mortgage
Association; (c) certificates of deposit properly secured at all times, by collateral security
described in (a) and (b) above; such agreements are only acceptable with commercial
banks, savings and loan associations, and mutual savings banks; (d) the following
investments fully insured by the Federal Deposit Insurance Corporation or the Federal
Savings and Loan Insurance Corporation: (1) certificates of deposit, (2) savings accounts,
(3) deposit accounts, or (4) depository receipts of a bank, savings and loan associations,
and mutual savings banks; (e) investments under the Investment of Local Government
Surplus Funds Act, being Part IV, Chapter 218, Florida Statutes (1985). _
"Bondholder" shall mean a registered owner of a Bond as shown on the
registration books of the Registrar.
"Bond Service Requirement" for any Fiscal Year, as applied to the Bonds of
any series, shall mean the sum of:
(1) the amount required to pay the interest becoming due on the Bonds
of such series during the Fiscal Year, except to the extent that such interest shall have
been provided by payments into the Sinking Fund out of bond proceeds for a specific
period of time or by payments of investment income into the Sinking Fund from the Bond
Service Account or any subaccounts therein.
(2) the amount required to pay the principal of Serial Bonds of such
series maturing in such Fiscal Year.
(3) the Amortization Installments for the maturities of Term Bonds of
such series for such Fiscal Year.
(4) in the event the Issuer has purchased or entered into an agreement
to purchase Federal Securities or Authorized Investments from moneys in the Bond
Service Account, then the income received or to be received on such Federal Securities or
Authorized Investments from the date of acquisition thereof to the date of maturity
thereof, unless otherwise designated for other purposes, shall be taken into consideration
in calculating the payments which will be required to be made into the Sinking Fund and
the Bond Service Account therein. Whenever such income is applied in calculating a Bond
Service Requirement for any purpose, such income shall also be excluded in the
computation of Gross Revenues for such purpose.
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"Bonds" shall mean the Issuer's Water and Sewer Refunding and Improvement
Revenue Bonds, Series 1987, herein authorized to be issued, together with any Additional
Bonds hereafter issued under the terms, conditions, and limitations contained herein.
• "Bond Year" for each series of Bonds, shall mean the one year period beginning
on the day after the expiration of the preceding bond year. The first bond year begins on
the date of delivery of the applicable series of Bonds and ends one year later.
"Code" shall mean the Internal Revenue Code of 1986, as amended, including
any temporary, proposed and final regulations promulgated pursuant thereto or pursuant
to any predecessor provisions of the Internal Revenue Code of 1954, as amended.
"Consulting Engineers" shall mean such qualified and recognized consulting
engineers, having a favorable repute for skill and experience in the construction and
operation of such facilities as the System, at the time retained by the Issuer to perform
the acts and carry out the duties as herein provided for Consulting Engineers.
"Cost of Operation and Maintenance" of the System shall mean the current
expenses, paid or accrued, of operation, maintenance and repair of the System as
calculated in accordance with sound accounting practice, but shall not include any
reserves for renewals and replacements, for extraordinary repairs or any allowance for
depreciation.
"Cost of the Project" shall have the meaning assigned thereto in Section 4 of
this Resolution.
State.
"County" shill mean Okeechobee County, Florida, a political subdivision of the
"Escrow Deposit Agreement" means that certain Escrow Deposit Agreement to
be entered into by and between the Issuer and a bank or trust company to be selected and
named Iby the Issuer prior to the delivery of the Series 1987 Bonds, in substantially the
form attached hereto as Exhibit "A".
"Federal Securities" shall mean only direct obligations of, or obligations fully
guaranteed as to principal and interest by, the United States of America.
"Fiscal Year" shall mean the period commencing on October 1 of each year
and ending on the succeeding September 30, or such other period as is at the time
prescribed by law.
"Franchise Revenues" shall mean the amounts due and payable to the Issuer
under franchises granted by the Issuer, more particularly described below, as such
franchises may be renewed or extended from time to time:
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0
1. Franchise granted to Okeairco, Inc. cable television of Okeechobee
for a community antenna television system, pursuant to an ordinance enacted on May 23,
1972;
• 2. Franchise granted to Florida Power do Light Company for electric
light and power facilities, pursuant to Ordinance No. 376 of the Issuer, enacted on August
5, 1975, as amended; and
3. Franchise granted to United Telephone Company of Florida for a
communications systems, pursuant to franchise agreement dated August 1, 1982:
"Government" shall mean the Farmers Home Administration of the United
States Department of Agriculture.
"Government Bonds" shall mean the Issuer's outstanding Water and Sewer
Revenue Bonds, Series 1972, initially issued in the amount of $400,000 together with the
Issuer's outstanding Water and Sewer Revenue Bonds, Series 1983B, initially issued in the
amount of $2,212,900, both of which are held by the Government.
"Gross Revenues" shall mean all income or earnings, including any income
from the investment of funds as herein provided, derived by the Issuer from the operation
of the System, excluding impact fees, if any.
"Guaranteed Entitlement Funds" shall mean the portion of the State revenue
sharing trust funds received by the Issuer from the Florida Department of Revenue and
designated as "Guaranteed Entitlement" under the provisions of Chapter 218, Part II,
Florida Statutes, as amended.
"Issuer" shall mean the City of Okeechobee, Florida.
"Maximum Bond Service Requirement" shall mean, as of any particular date of
calculation, the greatest amount of aggregate Bond Service Requirements for the then
current or any future Fiscal Year.
"Net Revenues" of the System shall mean the Gross Revenues after deduction
of the Cost of Operation and Maintenance.
"Nonpurpose Investments" means any security (within the meaning of the
Section 165(g)(2) (A) or (B) of the Code), any obligation (as defined in Section 1.103-
13(b)(4)(iii) of the U.S. Treasury Regulations), any annuity contract, or any investment
type property, expressly excluding any tax-exempt bond, which is acquired with the gross
proceeds of the Bonds, including amounts received (and including repayments of principal)
as a result of investing the original proceeds of the Bonds, and amounts to be used to pay
debt service on the Bonds, and which is not acquired in order to carry out the
. governmental purpose for which the Bonds were issued.
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"Payment Date" shall mean, with respect to payment to the Bondholders of
principal or interest on the Bonds, or with respect to the mandatory amortization of Term
Bonds, the date upon which payment of such principal, interest or Amortization
•Installment is required to be made by the paying agent.
,
Pledged Revenues shall mean the Net Revenues, and, until released as
permitted in Section 16U of this Resolution, the Public Service Tax Revenues, the
Franchise Revenues and the Guaranteed Entitlement Funds.
"Project" shall mean the construction and acquisition of additions, extensions
and improvements to the System pursuant to the plans and specifications of the
Consulting Engineers on file, or to be on file, with the Issuer.
"Public Service Tax Revenues" shall mean the proceeds of a tax levied and
collected by the Issuer on the purchase of electricity, bottled gas (natural or
manufactured), and local telephone service in the territorial limits of the Issuer, pursuant
to law and Ordinance No. 216, duly enacted by the Issuer on October 8, 1945, as the same
may be amended or supplemented from time to time.
"Put Bonds" shall mean the Term Bonds so designated by resolution or
ordinance of the Issuer at or prior to the time the Bonds of any series are sold.
"Rebate Amount" means an amount equal to the sum of (A) the excess of (i)
the amount earned on all Nonpurpose Investments (other than investments attributable to
an excess described in this subparagraph), over (ii) the amount which would have been
earned if such NonpurpQse Investments were invested at a rate equal to the yield on the
Bonds (determined on the basis of the issue price, within the meaning of Sections 1273 and
1274 of the Code), plus (B) any income attributable to the excess described in
subparagraph (A). In determining the aggregate amount earned on Nonpurpose
Investments for purposes of the foregoing, any gain or loss on the disposition of a
Nonpurpose Investment shall be taken into account, and unless the Issuer otherwise elects,
any amount earned on a Bona Fide Debt Service Fund (as defined in U.S. Treasury
Regulations Section 1.103-13(b)(12)) shall not be taken into account if the gross earnings
on such fund for the Bond Year is less than $100,000.
"Rebate Fund" means the fund established under Section 16C of this
Resolution to provide for payment of.the Rebate Amount.
Bonds.
"Refunded Bonds" shall mean the Series 1983A Bonds and the Government
"Registrar" shall mean the paying agent for the Bonds, as Bond Registrar, or
such other person, firm or corporation as may thereafter be from time to time designated
by the Issuer as the Registrar for the Bonds.
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"Serial Bonds" shall mean any Bonds for the payment of the principal of which,
at the maturity thereof, no Amortization Installments are required to be made prior to
the twelve-month period immediately preceding the stated date of maturity of such Serial
• Bonds.
"Series 1983A Bonds" shall mean the Issuer's outstanding Water and Sewer
Revenue iBonds, Series 1983A, initially issued in the amount of $1,000,000.
"Series 1987 Bonds" shall mean the first installment of the Bonds.
"System" shall mean the complete combined and consolidated water and sewer
system of the Issuer now owned by the Issuer, or hereafter constructed or acquired by the
Issuer, including the improvements, extensions and additions thereto to be constructed or
acquired either from the proceeds of the Series 1987 Bonds or Additional Bonds or from
any other sources, together with all lands or interests therein, including plants, buildings,
machinery, franchises, pipes, mains, fixtures, equipment and all property, real or personal,
tangible or intangible, now or hereafter owned or used in connection therewith, and
including any undivided or partial ownership interests therein.
"Term Bonds" shall mean the Bonds of a series all of which shall be stated to
mature on one date and which shall be subject to retirement by operation of the Bond
Amortization Account.
Section 3. FINDINGS. It is hereby ascertained, determined and
declared that:
A. The Issuer now owns, operates and maintains the System and is
empowered to maintain, operate, improve and extend such system and regulate and fix
reasonable rates and charges for the services furnished thereby.
B. The Issuer derives Gross Revenues from rates, fees and charges made
and collected for the services and facilities of the System supplying water and sanitary
sewerage services and the Pledged Revenues are not pledged or encumbered in any
manner, except for payment of the Refunded Bonds, which pledge and lien will be
defeased pursuant to the refunding program herein authorized.
C. It is necessary and desirable to acquire and construct the Project, in
order to preserve and protect the public health, safety and welfare of the inhabitants of
the Issuer.
D. The Issuer deems it necessary and in its best interest to provide for the
refunding of all the outstanding Refunded Bonds. The refunding program herein described
will benefit the Issuer by reducing the debt service to be paid from the Net Revenues of
• the System and permitting favorable revisions in restrictive covenants made to
Bondholders regarding the System and the investment of funds.
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E. The estimated maximum cost of such refunding as above described and
of the Project is $9,885,000, the actual cost to be determined upon sale of the Series 1987
Bonds and the Additional Bonds, if any. Such cost shall be paid from the proceeds derived
• from the sale of the Series 1987 Bonds, and, if necessary, with certain other funds
available to the Issuer. An amount sufficient to effect the refunding will be paid over to
the Government to redeem the Government Bonds, and will be deposited in an irrevocable
escrow account established for the holders of the Series 1983A Bonds which will be
invested in Federal Securities. The principal amounts of and interest earnings from such
Federal Securities will be sufficient to make timely payments of all presently outstanding
principal, interest, redemption premiums and other costs and obligations incurred in
respect to the Series 1983A Bonds.
F. The estimated Pledged Revenues will be sufficient to pay all of the
principal of and interest on the Series 1987 Bonds, as the same become due, and to make
all required sinking fund, reserve and other payments required under this Resolution.
G. The principal of and interest on the Bonds and all required sinking fund,
reserve and other payments shall be made solely from the Pledged Revenues as herein
provided. The Issuer shall never be required to levy ad valorem taxes on any property
therein to pay the principal of and interest on the Bonds or to make any of the required
sinking fund, reserve or other payments, and any failure to pay the Bonds shall not give
rise to a lien upon any property of or in the Issuer, except the Pledged Revenues.
Section 4. AUTHORIZATION OF CONSTRUCTION AND ACQUISITION
OF PROJECT AND REFUNDING OF REFUNDED BONDS. (A) There is hereby autho-
rized the construction and acquisition of the Project in accordance with the reports of the
Consulting Engineers presently on file with the Issuer and pursuant to the plans and
specifications of such Consulting Engineers on file with the Issuer as the same may be
revised from time to time. The "Cost of the Project", in addition to the items set forth in
the plans and specifications, may include, but need not be limited to, the acquisition of
any lands or interest therein or any other properties deemed necessary or convenient
therefor; engineering, legal and financing expenses; expenses for estimates of costs and of
revenues; expenses for plans, specifications and surveys; the fees of fiscal agents,
financial advisors or consultants; administrative expenses relating solely to the
construction and acquisition of the Project; interest upon the Series 1987 Bonds during the
period of construction of the Project and up to 12 months thereafter; the creation and
establishment of reasonable reserves for debt service; bond discount, if any, and such
• other costs and expenses, including legal fees and bond insurance premiums, as may be
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necessary or incidental to the financing herein authorized and the construction and
acquisition of the Project and the placing of same in operation.
(B) There is also hereby authorized the refunding of the outstanding
• Refunded Bonds by (i) payment in full to the Government at the closing for the Series
1987 Bonds of a sum sufficient to redeem the Government Bonds, and by (ii) payment in
full to the Escrow Holder under and pursuant to the Escrow Deposit Agreement at the
closing for the Series 1987 Bonds of a sum sufficient to defease the Series 1983A Bonds.
(C) The Escrow Deposit Agreement, in substantially the form attached
hereto as Exhibit "A," with such changes, alterations and corrections as may be approved
by the Mayor, such approval to be presumed by his execution thereof, is hereby approved
by the Issuer, and the Issuer hereby authorizes and directs the Mayor, and the City Clerk
of the Issuer to attest under the seal of the Issuer, the Escrow Deposit Agreement and to
deliver to the Escrow Holder the Escrow Deposit Agreement, all of the provisions of
which, when executed and delivered by the Issuer as authorized herein and by the Escrow
Holder duly authorized, shall be deemed to be a part of this instrument as fully and to the
same extent as if incorporated verbatim herein.
Section 5. RESOLUTION TO CONSTITUTE CONTRACT. In consider-
ation of the acceptance of the Bonds by the Bondholders from time to time, this
Resolution shall be deemed to be and shall constitute a contract between the Issuer and
such Bondholders. The covenants and agreements herein set forth to be performed by the
Issuer shall be for the equal benefit, protection and security of the legal Bondholders of
any and all of such Bonds, all of which shall be of equal rank and without preference,
priority or distinction of any of the Bonds over any other thereof, except as expressly
provided therein and herein.
Section 6. AUTHORIZATION OF BONDS. Subject and pursuant to the
provisions hereof, Bonds of the Issuer to be known as "Water and Sewer Refunding and
Improvement Revenue Bonds," the first installment of which is to be designated "Series
1987," are authorized to be issued in the aggregate principal amount of not exceeding
$9,885,000.
Section 7. DESCRIPTION OF BONDS. The Bonds shall be dated as of a
date or dates to be fixed by subsequent resolution of the Issuer, but not later than their
date of delivery, may be Serial Bonds, Term Bonds, or a combination thereof; shall be
designated "R-_" and numbered consecutively from one upward in order of
authentication; shall be in such denominations, shall bear interest at such rate or rates not
. exceeding the maximum legal rate allowable by law to be payable at such times, and shall
LKL-01/16/87-94A-2547 -8-
mature either annually or semi-annually on such dates and in such years and amounts, all
as shall be determined by subsequent resolution of the Issuer. The Bonds shall bear
interest from their date or from the most recent interest payment date to which interest
• has been paid, until payment of the principal sum.
The Bonds shall be issued in fully registered form, payable as to principal and
premium, if any, upon presentation and surrender thereof on the date fixed for maturity
or redemption thereof at the corporate trust office of the paying agent hereafter named.
Interest on each fully registered Bond shall be paid by check or draft mailed to the person
in whose name the Bond is registered, at his or her address as it appears on the Bond
Register maintained by the Bond Registrar, at the close of business on the 15th day of the .
month (whether or not a business day) next preceding the interest Payment Date (the
"Record Date"), irrespective of any transfer of such Bond subsequent to such Record Date
and prior to such interest Payment Date, unless the Issuer shall be in default in payment
of interest due on such interest Payment Date. In the event of any such default, such
defaulted interest shall be payable to the person in whose name such Bond is registered at
the close of business on a special record date for the payment of defaulted interest as
established by notice mailed by the Registrar to the registered owner of the Bonds not
less than fifteen days preceding such special record date. Such notice shall be mailed to
the person in whose name such Bond is registered at the close of business on the fifth (5th)
day preceding the date of mailing. All payments shall be made in accordance with and
pursuant to the terms o£ this Resolution and the Bonds and shall be payable in any coin or
currency of the United States of America which, at the time of payment, is legal tender
for the payment of public or private debts.
No Bond shall be valid or become obligatory for any purpose or be entitled to
any security or benefit under the Resolution until the certificate of authentication
endorsed on the Bond shall have been duly signed by the Bond Registrar.
If the date for payment of the principal of, premium, if any, or interest on the
Bonds shall be a Saturday, Sunday, legal holiday or a day on which the banking institutions
in the city where the corporate trust office of the paying agent is located are authorized
by law or executive order to close, then the date for such payment shall be the next
succeeding day which is not a Saturday, Sunday or legal holiday or a day on which such
banking institutions are authorized to close, and payment on such date shall have the same
force and effect as if made on the nominal date of payment.
The Bonds may be issued or exchanged for Bonds in coupon form, payable to
0 bearer, in such form, with such attributes and upon such conditions as the Issuer may
LKL-01/16/87-94A-2547 -9-
provide by supplemental resolutions, upon receipt of an opinion from a nationally
recognized bond counsel that such issuance or exchange will not cause interest on the
Bonds to be includable in gross income of the holder for federal income tax purposes.
Section 8. EXECUTION OF BONDS. The Bonds shall be executed in the
• name of the Issuer by the Mayor and attested by the City Clerk, and approved as to form
E
by the City Attorney, either manually or with their facsimile signatures, and the official
seal of the Issuer or a facsimile thereof shall be affixed thereto or reproduced thereon.
The facsimile signature of such officers may be imprinted or reproduced on the Bonds.
The Certificate of Authentication of the Bond Registrar shall appear on the Bonds, and no
bond shall be valid or obligatory for any purpose or be entitled to any security or benefit
under this Resolution unless such certificate shall have been duly executed on such Bond.
The authorized signature for the Bond Registrar shall be either manual or facsimile;
provided, however, that at least one of the signatures appearing on the Bonds, shall at all
times be a manual signature. In case any officer whose signature shall appear on any
Bonds shall cease to be such officer before the delivery of such Bonds, such signature or
facsimile shall nevertheless be valid and sufficient for all purposes the same as if he had
remained in office until such delivery. Any Bonds may be signed and sealed on behalf of
the Issuer by such person who at the actual time of the execution of such Bonds shall hold
the proper office with the Issuer, although at the date of enactment of this Resolution
such person may not have held such office or may not have been so authorized.
Section 9. NEGOTIABILITY. Subject to the provisions hereof
respecting registration and transfer, the Bonds shall be and shall have all the qualities and
incidents of negotiable instruments under the laws of the State of Florida, and each
successive holder, in accepting any of the Bonds, shall be conclusively deemed to have
agreed that the Bonds shall be and have all of such qualities and incidents of negotiable
instruments under the Uniform Commercial Code - Investment Securities of the State of
Florida.
Section 10. REGISTRATION, EXCHANGE AND TRANSFER. There shall
be a Bond Registrar for the Bonds which may be the Issuer or a designated bank or trust
company located within or without the State of Florida. The Bond Registrar shall
maintain the registration books of the Issuer and be responsible for the transfer and
exchange of the Bonds. The Issuer shall, prior to the proposed date of delivery of the
Bonds, by resolution designate the Bond Registrar and paying agent. The Bond Registrar
shall maintain the books for the registration of the transfer and exchange of the Bonds in
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compliance with the Florida Registered Public Obligations Act and the system of
registration as established by the Issuer pursuant thereto.
Bonds may be transferred upon the registration books, upon delivery to the
• Registrar, together with written instructions as to the details of the transfer of such
Bonds, along with the social security number or federal employer identification number of
such transferee and, if such transferee is a trust, the name and social security or federal
employer identification numbers of the settlor and beneficiaries of the trust, the date of
the trust and the name of the trustee. No transfer of any Bond shall be effective until
entered on the registration books maintained by the Bond Registrar.
Upon surrender for transfer or exchange of any Bond, the Issuer shall execute
and the Bond Registrar shall authenticate and deliver in the name of the registered owner
or the transferee or transferees, as the case may be, a new fully registered Bond or Bonds
of authorized denominations of the same maturity and interest rate for the aggregate
principal amount which the registered owner is entitled to receive at the earliest
practicable time in accordance with the provisions of this Resolution. The Issuer or the
Bond Registrar may charge the owner of such Bond for every such transfer or exchange an
amount sufficient to reimburse them for their reasonable fees and for any tax, fee, or
other governmental charge required to be paid with respect to such transfer, and may
require that such charge be paid before any such new Bond shall be delivered.
All Bonds presented for transfer, exchange, redemption or payment (if so
required by the Bond Registrar), shall be accompanied by a written instrument or
ii struments of transfer or authorization for exchange, in form and with guaranty of
signature satisfactory to the Bond Registrar, duly executed by the registered holder or by
his duly authorized attorney in fact or legal representative.
All Bonds delivered upon transfer or exchange shall bear interest from the
preceding interest payment date so that neither gain nor loss in interest shall result from
the transfer or exchange. New Bonds delivered upon any transfer or exchange shall be
valid obligations of the Issuer, evidencing the same debt as the Bond surrendered, shall be
secured by this Resolution and shall be entitled to all of the security and the benefits
hereof to the same extent as the Bonds surrendered.
The issuer and the Bond Registrar may treat the registered owner of any Bond
as the absolute owner thereof for all purposes, whether or not such Bonds shall be
overdue, and shall not be bound by any notice to the contrary.
Notwithstanding the foregoing provisions of this section, the Issuer reserves
the right, on or prior to the delivery of the Bonds to amend or modify the foregoing
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provisions relating to the registration of the Bonds by resolution or ordinance in order to
comply with all applicable laws, rules, and regulations of the United States and/or the
State of Florida relating thereto.
Section 11.
BONDS MUTILATED, DESTROYED, STOLEN
OR LOST.
In
•
case any Bond shall become
mutilated, or be destroyed, stolen or lost, the
Issuer may
in
its discretion issue and deliver a new Bond of like tenor as the Bond so mutilated,
destroyed, stolen or lost, in exchange and substitution for such mutilated Bond upon
surrender and cancellation of such mutilated Bond or in lieu of and substitution for the
Bond destroyed, stolen or lost, and upon the holder furnishing the Issuer proof of his
ownership thereof and satisfactory indemnity and complying with such other reasonable
regulations and conditions as the Issuer may prescribe and paying such expenses as the
Issuer may incur. All Bonds so surrendered shall be cancelled by the Registrar for the
Bonds. If any of the Bonds shall have matured or be about to mature, instead of issuing a
substitute Bond, the Issuer may pay the same, upon being indemnified as aforesaid, and if
such Bonds be lost, stolen or destroyed, without surrender thereof.
Any such duplicate Bonds issued pursuant to this section shall constitute
original, additional contractual obligations on the part of the Issuer whether or not the
lost, stolen or destroyed Bonds be at any time found by anyone, and such duplicate Bonds
shall be entitled to equal and proportionate benefits and rights as to lien on the source and
security for payment from the funds, as hereinafter pledged, to the same extent as all
other Bonds issued hereVnder.
Section 12. PROVISIONS FOR REDEMPTION. The Bonds shall be
redeemable as provided by subsequent resolution of the Issuer.
Bonds in denominations greater than an authorized denomination shall be
deemed to be an equivalent number of Bonds in the denomination of an authorized
denomination. If a Bond is of a denomination larger than an authorized denomination, a
portion of such Bond may be redeemed, in the amount of an authorized denomination or
integral multiples thereof.
Notice of such redemption, identifying the Bonds or portions thereof called for
redemption which notice shall include the CUSIP numbers as well as other identifying and
relevant descriptive details (i) shall be filed with the paying agents and any Registrar; and
(ii) shall be mailed by the Registrar, registered or certified mail or overnight delivery
service, postage prepaid, to all registered owners of the Bonds and to the four depositories
and to one or more of the national call information services, to be redeemed not more
. than forty-five (45) days and not less than thirty (30) days prior to the date fixed for
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redemption at their addresses as they appear on the registration books to be maintained in
accordance with the provisions hereof. In the case of an advance refunding of the Bonds,
a second redemption notice shall be sent not less than thirty (30) days prior to the
Alik redemption date scheduled under an advance refunding previously noticed. Failure to give
IRW
such notice by mailing to any owner of Bonds or to any depositary or national call
information service, or any defect therein, shall not affect the validity of any proceeding
for the redemption of other Bonds.
Notice having been mailed and filed in the manner and under the conditions
hereinabove provided, the Bonds or portions of Bonds so called for redemption shall, on
the redemption date designated in such notice, become and be due and payable at the
redemption price provided for redemption of such Bonds or portions of Bonds on such date.
Redemption Payments should include the CUSIP number of the Bonds to which they apply.
On the date so designated for redemption, notice having been mailed and filed and moneys
for payment of the redemption price being held in separate accounts in trust for the
holders of the Bonds or portions thereof to be redeemed, all as provided in this Resolution,
interest on the Bonds or portions of Bonds so called for redemption shall cease to accrue,
such Bonds and portions of Bonds shall cease to be entitled to any lien, benefit or security
under this Resolution, and the holders or Registered Owners of such Bonds or portions of
Bonds, shall have no rights in respect thereof except to receive payment of the
redemption price thereof.
Upon surrender of any Bond for redemption in part only, the Issuer shall issue
and deliver to the holder thereof, the costs of which shall be paid by the holder, a new
Bond or Bonds of authorized denominations in aggregate principal amount equal to the
unredeemed portion surrendered.
Section 13. FORM OF BONDS. The text of the Bonds, the Certificate of
Authentication and the Assignment shall be in substantially the forms attached hereto as
Exhibit "B", with such omissions, insertions and variations as may be necessary and
desirable and authorized and permitted by this Resolution or by any subsequent ordinance
or resolution adopted prior to the issuance thereof.
Section 14. BONDS NOT DEBT OF ISSUER. The Bonds shall not be or
constitute general indebtedness of the Issuer within the meaning of any constitutional or
statutory provision or limitation, but shall be payable solely from and secured by a prior
lien upon and pledge of the Pledged Revenues herein provided. No Bondholder shall ever
have the right to compel the exercise of the ad valorem taxing power of the Issuer or
• taxation in any form of any real property therein to pay such bonds or the interest thereon
LKL-01/16/87-94A-2547 -13-
or be entitled to payment of such principal and interest from any other funds of the Issuer
except from the Pledged Revenues in the manner provided herein.
Section 15. PLEDGED REVENUES. Until payment has been provided for
• as herein permitted, the payment of the principal of and interest on the Bonds shall be
secured forthwith equally and ratably by an irrevocable lien on the Pledged Revenues
prior and superior to all other liens or encumbrances on such Pledged Revenues and the
Issuer does hereby irrevocably pledge such Pledged Revenues to the payment of the
principal of and interest on the Bonds, the reserves therefor, and for all other required
payments. The Pledged Revenues (other than the Net Revenues) are subject to the
Issuer's optional release thereof upon compliance with Section 16U of this Resolution.
Section 16. COVENANTS OF THE ISSUER. Until all principal of and
interest on the Bonds shall have been paid or provided for as herein permitted, the Issuer
covenants with the Bondholders as follows:
A. REVENUE FUND. The entire Gross Revenues shall upon receipt thereof
be deposited in the "Water and Sewer System Revenue Fund" (hereinafter called "Revenue
Fund"), hereby created and established. Such Revenue Fund shall constitute a trust fund
for the purposes herein provided and shall be kept separate and distinct from all other
funds of the Issuer and used only for the purposes and in the manner herein provided.
B. DISPOSITION OF REVENUES. All funds at any time remaining on
deposit in the Revenue Fund shall be disposed of on or before the twentieth day of each
month, commencing in the month immediately following the delivery of the Series 1987
Bonds, only in the following manner and in the following order of priority:
(1) Funds shall first be used for deposit into a fund to be known as the
"Operation and Maintenance Fund", which is hereby established, of such sums as are
necessary for the Cost of Operation and Maintenance, for the next ensuing month.
(2) From the moneys remaining in the Revenue Fund, the Issuer shall
next deposit into a separate fund, which is hereby created and designated Water and
Sewer Revenue Bonds Sinking Fund (hereinafter called "Sinking Fund"), such sums as will
be sufficient to pay (a) one-sixth (1/6) of all interest becoming due on the Bonds on the
next semi-annual interest payment date; (b) commencing in the first month which is
twelve (12) months or six (6) months prior to the first annual or semi-annual maturity
date, respectively, of any Serial Bonds, one -twelfth (1/12) or one-sixth (1/6), respectively,
of the amount of Serial Bonds which will become due and payable on the next annual or
semi-annual principal maturity date, respectively, and (c) one -twelfth (1/12) of the
. Amortization Installment required to be made on the next annual payment date or one-
LKL-01/16/87-94A-2547 -14-
sixth (11/6) of the Amortization Installment required to be made on the next semi-annual
payment date into a "Bond Amortization Account", which is hereby created and
established in the Sinking Fund. Such payments shall be credited to a separate special
Aft account for each series of Term
Bonds outstanding, and if there
shall be
more than one
MW
stated maturity for Term Bonds
of a series, then into a separate
special
account in the
Sinking Fund for each such separate maturity of Term Bonds. The funds and investments
in each such separate account shall be pledged solely to the payment of principal of the
Term Bonds of the series or maturity within a series for which it is established and shall
not be available for payment, purchase or redemption of Term Bonds of any other series
or within a series, or for transfer to the Sinking Fund to make up any deficiencies in
required payments therein. The Amortization Installments may be due either annually or
semi-annually, but in any event, the required payments as set forth above shall be made
monthly commencing in the first month which is six (6) months or twelve (12) months, as
the case may be, prior to the date on which the Amortization Installment is required to be
made pursuant to (c) above.
Upon the sale of any series of Term Bonds, the Issuer shall by resolution,
establish the amounts and maturities of such Amortization Installments for each series,
and if there shall be more than one maturity of Term Bonds within a series, the
Amortization Installments for the Term Bonds of each maturity. In the event the moneys
deposited for retirement of a maturity of Term Bonds are required to be invested, in the
manner provided below,. the Amortization Installments may be stated in terms of either
the principal amount of the investments to be purchased on, or the cumulative amounts of
the principal amount of investments required to have been purchased by, the payment
date of such Amortization Installment.
Moneys on deposit in each of the separate special accounts in the Bond
Amortization Account shall be used for the open market purchase or the redemption of
Term Bonds of the series or maturity of Term Bonds within a series for which such
separate special account is established or may remain in said separate special account and
be invested until the stated date of maturity of the Term Bonds. The resolution
establishing the Amortization Installments for any series or maturity of Term Bonds may
limit the use of moneys to any one or more of the uses set forth in the preceding sentence
and may specify the type or types of investments permitted hereunder to be purchased.
(3) Moneys remaining in the Revenue Fund shall next be applied by the
Issuer to maintain a Reserve Account, which Reserve Account is hereby created and
• established, in a sum equal to and sufficient to pay the Maximum Bond Service
LKL-01/16/87-94A-2547 -15-
Requirement on all outstanding Bonds becoming due in any ensuing Fiscal Year, all or a
portion of which such sum may be initially provided from the proceeds of the sale of the
Bonds and/or other moneys of the Issuer. The Issuer shall thereafter deposit into said
Reserve Account an amount equal to one -twelfth (1/12) of twenty per cent (20%) of the
difference between the amount, if any, so deposited upon the delivery of the Bonds and
the amount of the :Maximum Bond Service Requirement on all outstanding Bonds becoming
due in any ensuing Fiscal Year. No further payments shall be required to be made into
such Reserve Account when there has been deposited therein and as long as there shall
remain on deposit therein a sum equal to the Maximum Bond Service Requirement on all
outstanding Bonds becoming due in any ensuing Fiscal Year.
Any withdrawals from the Reserve Account shall be subsequently restored
from the first moneys available in the Revenue Fund after all required current payments
into the Sinking Fund and into the Reserve Account, including all deficiencies for prior
payments, have been made in full.
Moneys in the Reserve Account shall be used only for the purpose of the
payment of maturing principal (including Amortization Installments) of or interest on the
Bonds when the moneys in the Sinking Fund are insufficient therefor, and for no other
purpose. Upon the issuance by the Issuer of any Additional Bonds under the terms,
limitations and conditions provided in this Resolution, the payments into the Reserve
Account shall be increased so that the amount on deposit therein shall be equal to the
Maximum Bond Service -Requirement on all Bonds outstanding and to be outstanding.
Whenever the amount on deposit in the Reserve Account exceeds the
Maximum Bond Service Requirement on all Bonds then outstanding, the excess may be
withdrawn and deposited into the Sinking Fund.
The Issuer shall not be required to make any further payments into the Sinking
Fund or into the Reserve Account when the aggregate amount of moneys in the Sinking
Fund and the Reserve Account are at least equal to the aggregate principal amount of
Bonds then outstanding, plus the amount of interest then due or thereafter to become due
on the Bonds then outstanding.
Notwithstanding the foregoing provisions, in lieu of the required deposits of
Revenues into the Reserve Account, the Issuer may cause to be deposited into the
Reserve Account a surety bond or an insurance policy issued by a reputable and
recognized insurer for the benefit of the Bondholders in an amount equal to the difference
between the Maximum Bond Service Requirement and the sums then on deposit in the
. Reserve Account, if any, which surety bond or insurance policy shall be payable (upon the
LKL-01/16/87-94A-2547 -16-
giving of notice as required thereunder) on any interest payment date on which a
deficiency exists which cannot be cured by funds in any other account held pursuant to
this Resolution and available for such purpose. The insurer providing such surety bond or
insurance policy shall be an insurer whose municipal bond insurance policies insuring the
• payment, when due, of the principal of and interest on municipal bond issues results in
such issues being rated in the highest rating category by either Standard be Poor's
Corporation or Moody's Investors Service, Inc., or their successors or any insurer who
holds the highest policyholder rating accorded insurers by A.M. Best do Co. or any
comparable service. If a disbursement is made from a surety bond or an insurance policy
provided pursuant to this paragraph, the Issuer shall be obligated to either reinstate the
maximum limits of such surety bond or insurance policy immediately following such
disbursement or to deposit into the Reserve Account, as herein provided in this paragraph
for restoration of withdrawals from the Reserve Account, funds in the amount of the
disbursement made under such policy, or a combination of such alternatives.
(4) The Issuer shall next apply and deposit the moneys in the Revenue
Fund into the Rebate Fund to pay the Rebate Amount, in accordance with Section 16C of
this Resolution.
(5) The Issuer shall next apply and deposit the moneys in the Revenue
Fund into a special account to be known as the "Renewal and Replacement Fund", which
fund is hereby created. The Issuer shall deposit into such Renewal and Replacement Fund
an amount equal to one -twelfth (1/12) of five per centum (5%) of the Gross Revenues of
the System for the previous Fiscal Year, or such other amount as is certified as necessary
for the purposes of the Renewal and Replacement Fund by the Consulting Engineer and as
approved by the City Council. The moneys in said Renewal and Replacement Fund shall
be used only for the purpose of paying the cost of extensions, enlargements or additions to
or the replacement of capital assets of the system and emergency repairs thereto. Such
moneys on deposit in such Fund shall also be used to supplement the Reserve Account if
necessary in order to prevent a default in the payment of the principal of and interest on
the obligations.
(6) To the extent junior lien bonds are issued and outstanding (which
subordinated bonds the Issuer reserves the right to issue), the Issuer shall next apply
moneys in the Revenue Fund to the payment of principal of, redemption premium, if any,
and interest on such subordinated debt of the Issuer.
(7) The balance of any moneys remaining in the Revenue Fund after
is
the above required payments have been made may either be deposited into either the
LKL-01/16/87-94A-2547 -17-
Renewal and Replacement Fund or the Sinking Fund, or may be used for the purchase or
redemption of Bonds, or may be used by the Issuer for any lawful purpose of the Issuer.
C. REBATE FUND; REBATE ADMINISTRATOR. (1) A Rebate Fund is
_ hereby established. There shall be deposited into the Rebate Fund the Rebate Amount (as
set forth in the certificate of the certified public accountant described herein) from the
Revenue Fund or from other funds of the Issuer, within five days following receipt of the
certificate mentioned herein. Funds on deposit in the Rebate Fund shall be used only to
pay the Rebate Amount and for no other purpose (except as provided in subsection
16C(2)(A) hereof) until the Last Rebate Payment (hereinafter defined). Any deficiency in
the Rebate Fund, as determined by the Rebate Administrator, hereinafter designated,
upon consultation with a certified public accountant, Bond Counsel or such other
consultant as deemed appropriate by the Rebate Administrator to assure compliance with
applicable provisions of the Code, U.S. Treasury Regulations and any promulgations of the
Internal Revenue Service, shall be payable from the following sources in the order listed,
or at the option of the Issuer, from the source designated in writing by the Issuer to the
Rebate Administrator: (i) moneys on deposit in the Construction Fund; (ii) moneys on
deposit in the Revenue Fund; or (iii) from other lawfully available funds of the Issuer paid
pursuant to this subsection. Such amounts shall be deposited to the Rebate Fund within
five days of notice from the Rebate Administrator to the Issuer stating the amount of
such deficiency and requesting the Issuer to designate the source of payment as aforesaid.
All earnings from sums on deposit in the Rebate Fund shall be retained therein and shall
be applied as described below.
(2) Funds on deposit in the Rebate Fund shall be applied as follows:
(A) If (I) the gross proceeds of the Bonds (excluding any amounts
on deposit in a bona fide debt service fund) are fully spent for the governmental purpose
for which the Bonds were issued within six months from the date of issuance of the Bonds,
or if (II) the Issuer is a small governmental unit as provided in Section 148(f)(4)(C) the
Code, then the Rebate Amount may be applied to pay qualified Costs of the Project,
provided such amounts are applied for such purpose within the six month period mentioned
herein (to the extent attributable to Section 16C(2)(A)(I), or
(B) If the condition set forth in the above paragraph is not met,
the Rebate Administrator shall give the Issuer written direction to withdraw an amount
from the Rebate Fund and pay such amount, as follows:
(I) The amount which the Rebate Administrator shall
• direct to be withdrawn from the Rebate Fund shall be (i) in the case of any rebate
LKL-01/16/87-94A-2547 -18-
payment other than the Last Rebate Payment, an amount equal to 90 percent of the
Rebate Amount with respect to the Bonds at the time of such payment, and (ii) in the case
of the Last Rebate Payment, an amount sufficient to pay the remaining balance of the
Rebate Amount, including such amounts, if any, not previously paid together with earnings
• thereon.
(II) The Rebate Administrator shall give the Issuer written
direction to pay the amount specified in the preceeding paragraph to the United States
Treasury as follows:
(1) The first rebate payment shall be paid on the
i
earlier of (A) the date not later than 60 days after the date on which the last bond of the
Bonds is redeemed, or (B) the date not later than 30 days after the expiration date of the
fifth Bond Year.
(2) Subsequent rebate payments shall be made no
later than 30 days after the expiration date of the fifth Bond Year, and thereafter no
later than 30 days after each fifth anniversary of such date.
(3) The last rebate payment shall be made no later
than 60 days after the date on which the last bond of the Bonds is redeemed (the "Last
Rebate Payment").
The Rebate Administrator may in its sole discretion make rebate payments earlier or
more frequently or in greater amounts (not to exceed the Rebate Amount as of the date
of payment, unless the Issuer consents thereto in writing) than as herein provided. The
Rebate Administrator shall make the rebate payments in the amounts, at the times and to
the address, all as specified in Section 148(f) of the Code and in Section 1.103-15AT,
Temporary U.S. Treasury Regulations, to the extent applicable, and in accordance with
any promulgation in regard thereto by the Internal Revenue Service. Notwithstanding
anything in this Section 16C of the Resolution to the contrary, the Issuer and Rebate
Administrator shall not be required to comply with any of the requirements hereof for
which an opinion of nationally recognized bond counsel states that the failure to so
comply will not cause the interest on the Bonds, or a particular series thereof, to be
includable in gross income of the Bondholders.
(3) The Issuer shall by resolution designate to act as Rebate
Administrator for the Bonds a certified public accountant, a bank or trust company, or
any other agent of the Issuer sufficiently knowledgeable in financial calculations to
perform the obligations of the Rebate Administrator hereunder. The Rebate
• Administrator is hereby authorized to hire counsel, accountants or experts which the
LKL-01/16/87-94A-2547 -19-
Rebate Administrator, in its sole discretion, determines advisable to determine the
amount, due dates and any other requirements pertaining to the Rebate Fund. The Rebate
Administrator will not be liable for any loss occasioned by its reliance on the instructions
• of such experts. The duties and responsibilities of the Rebate Administrator may be
performed by more than one party.
(4) The Rebate Administrator shall obtain or provide:
(1) The first rebate certificate of a certified public accountant
as required herein, on the date which is the earlier of (A) the date 20 days after the date
on which the last bond of the Bonds is redeemed, or (B) the date 20 days after the
expiration date of the fifth Bond Year.
(2) Subsequent rebate certificates of a certified public
accountant as required herein, on the date 20 days after the expiration date of the fifth
Bond Year, and thereafter on the date 20 days after each fifth anniversary of such date.
(3) The last rebate certificate of a certified public accountant as
required herein, on the date 20 days after the date on which the last bond of the Bonds is
redeemed.
The certificate of certified public accountant shall establish compliance with this
subsection 16C during the applicable Bond Year. Such certificate may be based upon the
Rebate Administrator's provision to the certified public accountant of a statement setting
forth the aggregate amount earned on all Nonpurpose Investments in which gross proceeds
of the Bonds are invested. Such certificate of a certified public accountant shall be in a
form acceptable to the Rebate Administrator and shall set forth the Rebate Amount,
calculated in accordance with Section 148(f) of the Code, Temporary U.S. Treasury
Regulations, Section 1.103-15AT, and in accordance with any promulgation in regard
thereto by the Internal Revenue Service. Notwithstanding anything in this Section 16C of
the Resolution to the contrary, the rebate certificate may be provided by a certified
public accountant, by an accounting firm, or by any other agent of the Issuer sufficiently
knowledgeable in financial calculations to provide such certificate.
(c) The Rebate Administrator shall provide the Issuer written investment
instructions such that the Issuer will not make or direct any Person to make on its behalf
a Prohibited Payment, as defined in Temporary U.S. Treasury Regulations, Section 1.103-
15AT(d)(6). As set forth therein, a Prohibited Payment is the payment, or agreement to
pay, to a party other than the United States an amount that is required to be paid to the
United States by entering into a transaction that reduces the Rebate Amount because
0 such transaction results in a smaller profit or a larger loss than would have resulted if the
LKL-01/16/87-94A-2547 -20-
transaction had been at arms length and had the yield on the Bonds not been relevant to
either party.
(d) The Issuer shall provide the Rebate Administrator all such certifications,
instructions or consents as may be required for the Rebate Administrator to administer
• the Rebate Fund in accordance with this subsection 16C.
D. INVESTMENT OF FUNDS. The Operation and Maintenance Fund, the
Sinking Fund, the Reserve Account, the Renewal and Replacement Fund, the Revenue
Fund, the Construction Fund, the Rebate Fund, the Excise Revenues Fund and any other
special funds herein established and created shall constitute trust funds for the purposes
provided herein for such funds. All such funds shall be continuously secured in the same
manner as state and municipal deposits are required to be secured by the laws of the State
of Florida. Moneys on deposit in any of such funds and accounts may be invested and
reinvested in Authorized Investments.
Investments made with moneys in the Construction Fund, the Revenue Fund,
the Operation and Maintenance Fund, the Sinking Fund (except the Bond Amortization
Account therein), the Rebate Fund, the Excise Revenues Fund must mature not later than
the date that such moneys will be needed. Investments made with moneys in the accounts
in the Bond Amortization Account, in the Reserve Account and in the Renewal and
Replacement Fund must mature, in the case of the accounts in the Bond Amortization
Account not later than the stated date of maturity of the Term Bonds to be retired from
the sub -accounts in the Bond Amortization Account from which the investment is made,
in the case of the Reserve Account not later than the final maturity of any Bonds then
outstanding; and in the case of the Renewal and Replacement Fund, not later than such
date as shall be determined by the Issuer. Any and all income received by the Issuer from
all such investments shall be deposited into the Revenue Fund, except however, that
investment income earned in the Bond Amortization Account may be retained thereon or
deposited into the Sinking Fund and used to pay maturing principal of and interest on the
Bonds, at the option of the Issuer.
The Rebate Fund shall be invested in accordance with Section 16C of this
Resolution and the earnings thereon shall be retained therein and used for the purposes
designated in such section.
The cash required to be accounted for in each of the foregoing funds and
accounts established herein may be deposited in a single bank account, and funds allocated
to the various accounts established herein may be invested in a common investment pool,
. provided that adequate accounting records are maintained to reflect and control the
LKL-01/16/87-94A-2547 -21-
restricted allocation of the cash on deposit therein and such investments for the various
purposes of such funds and accounts as herein provided.
The designation and establishment of the various funds in and by this
• Resolution shall not be construed to require the establishment of any completely
independent, self -balancing funds as such term is commonly defined and used in
governmental accounting, but rather is intended solely to constitute an earmarking of
certain revenues and assets of the System for certain purposes and to establish certain
priorities for application of such revenues and assets as herein provided.
E. OPERATION AND MAINTENANCE. The Issuer will maintain the
System and all parts thereof in good condition and will operate the same in an efficient
and economical manner, making such expenditures for equipment and for renewals, repairs
and replacements as may be proper for the economical operation and maintenance
thereof.
F. RATE ORDINANCE. The Issuer has enacted or will enact a rate
ordinance and thereby will fix, establish and maintain such rates and will collect such
fees, rentals and other charges for the services and facilities of the System and revise the
same from time to time whenever necessary, as will always provide Gross Revenues in
each Fiscal Year sufficient to pay one hundred per centum (100%) of the Cost of
Operation and Maintenance of the System in such Fiscal Year, one hundred twenty-five
(125%) of the Bond Service Requirement becoming due in such Fiscal Year on the
outstanding Series 1987 Bonds and on all outstanding Additional Bonds, including all
Pledged Revenues not released under Section 16U of this Resolution, plus one hundred per
centum (100%) of all reserve and other payments required to be made pursuant to this
Resolution, including all Pledged Revenues not released under Section 16U of this
Resolution. Such rates, fees, rentals and other charges shall not be reduced so as to be
insufficient to provide Gross Revenues for such purposes.
G. BOOKS AND RECORDS. The Issuer shall keep books and records of the
System, which such books and records shall be kept separate and apart from all other
books, records and accounts of the Issuer, and Bondholders shall have the right at all
reasonable times to inspect all records, accounts and data of the Issuer relating thereto.
H. ANNUAL AUDIT. The Issuer shall also, at least once a year, cause the
books, records and accounts relating to the System to be properly audited by a recognized
independent firm of certified public accountants and shall make generally available the
report of such audits to any Bondholder.
LKL-01/16/87-94A-2547 -22-
1. NO MORTGAGE OR SALE OF THE SYSTEM. The Issuer irrevocably
covenants, binds and obligates itself not to sell, lease, encumber or in any manner dispose
of the System as a whole until all of the Bonds shall have been paid in full as to both
principal and interest, or payment shall have been duly provided for under this Resolution.
• The foregoing provision notwithstanding, the Issuer may sell or dispose of, for
fair market value, any properties or parts of the System which the Consulting Engineer
shall certify in writing are not necessary for the continued operation of the System and
that the sale or disposal of which will not adversely affect the Gross Revenues to be
derived from the System to such an extent that the Issuer will fail to comply with the
covenants contained herein, including Section 16F hereof.
The proceeds derived from any sale or disposal of any properties or parts of
the System as provided for in the above paragraph shall, in the discretion of the Issuer, be
(1) deposited in the Renewal and Replacement Fund and used exclusively for the purpose
of paying the cost of extensions, enlargements or additions to, or the replacement of
capital assets of the System and for unusual or extraordinary repairs thereto, or for the
construction or acquisition of additions, extensions and improvements to the System, or
(2) for the purchase or retirement of the Bonds then outstanding. However, if the
Consulting Engineer certifies that proceeds are necessary for the purposes stated in part
(1) above, such proceeds shall remain in the Renewal and Replacement Fund until such
certified requirements are satisfied, and the proceeds shall not be used for any other
purpose allowed by this Resolution.
J. INSURANCE. The Issuer will make adequate provision to maintain fire
and windstorm insurance on all buildings and structures and properties of the System
which are subject to loss through fire or windstorm, public liability insurance, and other
insurance of such types and in such amounts as are normally carried in the operation of
similar public and private utility systems within the State of Florida. Any such insurance
shall be placed with nationally recognized and reputable insurors or under State approved
and authorized self insurance programs or any combination of both and shall be carried for
the benefit of the Bondholders. All monies received for losses under any such insurance,
except public liability, are hereby pledged by the Issuer as security for the Bonds, until
and unless such proceeds are used to remedy the loss or damage for which such proceeds
are received, either by repairing the property damaged or replacing the property
destroyed within ninety (90) days from the receipt of such proceeds.
K. NO FREE SERVICE. The Issuer will not render or cause to be rendered
. any free services of any nature by its System, nor will any preferential rates be
LKL-01/16/87-94A-2547 -23-
established for users of the same class. This covenant shall not prevent individual
contracts with other governmental entities for the wholesale delivery of services of the
System. The Issuer, including its departments, agencies and instrumentalities, shall avail
• itself of the facilities or services provided by the System or any part thereof, and the
same rates, fees or charges applicable to other customers receiving like services under
similar circumstances shall be charged to the Issuer and any such department, agency or
instrumentality. Such charges shall be paid as they accrue, and the Issuer shall transfer
from its general funds sufficient sums to pay such charges. The revenues so received shall
be deemed to be Gross Revenues derived from the operation of the System and shall be
deposited and accounted for in the same manner as other Gross Revenues derived from
such operation of the System.
L. MANDATORY CONNECTION. To the full extent permitted by law the
Issuer will adopt and keep in force and effect an ordinance requiring that all improved
premises with respect to which water or sewer services from the System are available
shall connect such premises to the System and shall obtain available water and sewer
services only from the System.
M. ENFORCEMENT OF COLLECTIONS. The Issuer will diligently enforce
and collect all fees, rentals or other charges for the services and facilities of the System
and take all steps, actions and proceedings for the enforcement and collection of such
fees, rentals or other charges which shall become delinquent to the full extent permitted
or authorized by the Act and by the laws of the State of Florida.
The Issuer will, under reasonable rules and regulations, shut off and discon-
tinue the supplying of the water service and the sewer service of the System for the non-
payment of fees, rentals or other charges for said water service or said sewer service, or
either of them, and will not restore said water service or sewer service, or either of them,
until all delinquent charges for both water service and sewer service, together with
interest and reasonable penalties, have been paid in full.
N. REMEDIES. Any Bondholder, or any trustee acting for the Bondholders
may, either at law or in equity, by suit, action, mandamus or other proceedings in any
court of competent jurisdiction, protect and enforce any and all rights, including the right
to the appointment of a receiver, existing under the laws of the State of Florida, or
granted and contained herein, and may enforce and compel the performance of all duties
herein required or by any applicable statutes to be performed by the Issuer or by any
officer thereof.
LKL-01/16/87-94A-2547 -24-
Nothing herein, however, shall be construed to grant to any Bondholders any
Lien on any real property of the Issuer.
O. CONSULTING ENGINEERS. The Issuer will retain an independent
• consulting
engineer or engineering firm having a favorable reputation for
skill
and
experience
for the design, construction and operation of systems of comparable
size
and
character as the System, for the purpose of providing the Issuer competent engineering
counsel in connection with the making of the capital improvements. The Issuer may,
however, employ additional engineers at any time with relation to specific engineering
and operation problems arising in connection with the System.
P. NO COMPETING SYSTEM. To the full extent permitted by law the
Issuer will not grant or cause, consent to, or allow the granting of any franchise or permit
to any person, firm, corporation or body or agency or instrumentality whatsoever for the
furnishing of water or sanitary sewerage services to or within the service area of the
System, if determined by the Consulting Engineers to be materially competitive with the
System and adversely affecting the Gross Revenues derived from the operation thereof.
Q. ISSUANCE OF OTHER OBLIGATIONS. The Issuer will not issue any
other obligations, except under the conditions and in the manner provided herein, payable
from the Pledged Revenues, nor voluntarily create or cause to be created any debt, lien,
pledge, assignment, encumbrance or other charge having priority to or being on a parity
with the lien of the Series 1987 Bonds and the interest thereon upon the Pledged
Revenues. Any other obligations issued by the Issuer in addition to the Series 1987 Bonds
or Additional Bonds provided for in subsection 16R below, payable from the Pledged
Revenues shall contain an express statement that such obligations are junior and
subordinate in all respects to the Bonds as to lien on and source and security for payment
from the Pledged Revenues.
R. ISSUANCE OF ADDITIONAL BONDS. Additional Bonds, payable on a
parity from the Pledged Revenues with the Series 1987 Bonds, shall be issued only for the
purposes of refunding a part of the outstanding Bonds or financing the cost of extensions,
additions and improvements to the System and for the acquisition and construction of, and
extensions, additions and improvements to, sewer and/or water systems which are to be
consolidated with the System and operated as a single combined utility. Additional Bonds,
other than for refunding purposes, shall be issued only upon compliance with all of the
following conditions:
(1) There shall have been obtained and filed with the City Clerk of the
. Issuer a certificate of a qualified and recognized firm of independent certified public
LKL-01/16/87-94A-2547 -25-
accountants stating: (a) that the books and records of the Issuer relative to the System
have been audited by such firm; (b) the amount of the Pledged Revenues derived for the
Fiscal Year preceding the date of issuance of the proposed Additional Bonds or for any 12
consecutive months during the 18 months immediately preceding the date of the issuance
• of the Additional Bonds with respect to which such certificate is made, adjusted as herein
below provided; (c) that the aggregate amount of such Pledged Revenues, as adjusted, for
the period for which such Pledged Revenues are being certified is equal to not less than
125% of the Maximum Bond Service Requirement becoming due in any Fiscal Year
thereafter on (i) all Bonds then outstanding, and (ii) on the Additional Bonds with respect
to which such certificate is made.
(2) Net Revenues certified pursuant to (b) in the previous paragraph shall be
adjusted for purposes of this Subsection by removing therefrom any Pledged Revenues
previously released pursuant to Section 16U of this Resolution. Upon recommendation of
the Consulting Engineers, the Net Revenues certified pursuant to (b) in the previous
paragraph may be adjusted for purposes of this Subsection as follows: (a) to reflect, for
the period for which such Net Revenues are being certified, any rate increases which shall
have been promulgated subsequent to the date of commencement of such period and prior
to the date of such certificate; (b) to reflect any increase in such Net Revenues caused by
any new projects of the System which shall have been placed into use and operation
subsequent to the date of commencement of such period and prior to the date of such
certificate; (c) to include the estimated average annual Net Revenues to be derived from
the operation of the praject to be acquired out of the proceeds of the Additional Bonds
with respect to which such certificate is made and (d) to include the estimated average
annual Net Revenues to be derived from the operation of any other project of the System
under construction on the date of such certificate or completed but not placed into use
and operation on the date of such certificate. No adjustment pursuant to either clause (c)
or clause (d) above, shall be made unless Net Revenues for the twelve-month period under
(b) in the previous paragraph shall have been equal to or greater than 1.00 times the
maximum Bond Service Requirement for all Bonds then outstanding and the Additional
Bonds with respect to which such certificate is made, after taking into consideration any
permissible adjustments under clauses (a) and (b) of this Subsection.
(3) Each ordinance or resolution authorizing the issuance of Additional
Bonds will recite that all of the covenants herein contained will be applicable to such
Additional Bonds.
(4) The Issuer shall not be in default in performing any of the covenants and
. obligations assumed hereunder, and all payments herein required to have been made into
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the accounts and funds, as provided hereunder, shall have been made to the full extent
required.
S. COMPLETION OF THE ISSUER. The Issuer will complete the Project in
• an economical and efficient manner and with all practicable dispatch. Thereafter, the
I
Issuer; will maintain the System in good condition and continuously operate the same in an
efficient manner and at a reasonable cost.
T. APPLICATION OF REFUNDED BONDS FUNDS AND ACCOUNTS. All
moneys in the funds and accounts created by the ordinance which authorized the issuance
of the Refunded Bonds may, in the discretion of the Issuer, be transferred to and
deposited in the like funds and accounts created by this Resolution or may be used by the
Issuer, in whole or in part, to effect the refunding of the Refunded Bonds, as evidenced by
a certificate of the
City
Administrator directing such
transfer and use. All funds
and
accounts created by
this
Resolution may be held by
more than one depositary in
the
discretion of the Issuer.
U. RELEASE OF CERTAIN PLEDGED REVENUES. The Public Service Tax
Revenues, the Franchise Revenues and the Guaranteed Entitlement Funds, or any of such
revenue sources, may, at the option of the Issuer, be released from the pledge and lien of
this Resolution and of the Bonds then outstanding, effective upon adoption by the Issuer of
a resolution or resolutions designating and declaring the revenue source or sources
released, attaching the sworn certificate of an independent certified public accountant
described in this Subsection 16U and directing the giving of notice in the manner
described in this Subsection 16U.
In the event the annual Net Revenues, together with any of the Pledged
Revenues proposed to be retained as initially pledged, for the most recent Fiscal Year or
for any twelve consecutive months out of the most recent eighteen months, shall be
certified by the sworn certificate of an independent certified public accountant to equal
at least 125% of the Maximum Bond Service Requirement for Bonds then outstanding,
then the lien of the holders of such Bonds on the revenue source or sources designated for
release shall be forthwith released and extinguished upon adoption of said resolution.
Nothing in this Resolution shall prevent the reinstatement of the pledges of any revenue
source or sources after release thereof, by subsequent resolution adopted by the issuer at
any time at the option of the Issuer. The Issuer shall, not later than fifteen days after
adoption of any such resolution of release, mail to each holder of Bonds and cause to be
published in a financial newspaper or journal published in the City of New York, New
• York, a notice to the effect that the above described condition has been met, that a sworn
LKL-01/16/87-94A-2547 -27-
certificate of an independent certified public accountant is on file with the Bond
Registrar, and that the lien of the holders of Bonds on the designated revenue source or
sources and the pledge thereof to the Bonds is released and extinguished.
All such sworn certificates of the independent certified public accountant may
• be inspected during business hours by any holder of Bonds, and the Issuer shall mail copies
of all such certificates to any holder of Bonds requesting the same.
V. PUBLIC SERVICE TAX REVENUES, THE FRANCHISE REVENUES AND
THE GUARANTEED ENTITLEMENT FUNDS. The Issuer covenants and agrees to
establish a special fund to be known as the "Excise Revenues Fund" which shall be used
exclusively for the purpose of receiving all of the proceeds of the Public Service Tax
Revenues, the Franchise Revenues and the Guaranteed Entitlement Funds as soon as the
same are collected by the Issuer. Whenever by reason of the insufficiency of moneys on
deposit in the Revenue Fund, the Issuer is not able to make promptly the current monthly
payments required to be made pursuant to the provisions of Section 16B above, there shall
be paid into the Revenue Fund from the moneys on deposit in the Excise Revenues Fund
whatever sums are necessary to cure such existing deficit. All or a portion of the Pledged
Revenues on deposit in the Excise Revenues Fund are subject to release in certain events
as set forth in Section 16U of this Resolution.
W. LEVY OF PUBLIC SERVICE TAXES; COLLECTION OF FRANCHISE
REVENUES AND GUARANTEED ENTITLEMENT FUNDS. The Issuer has covenanted
that it will not repeal the ordinance now in effect levying the Public Service Tax and will
not amend or modify said ordinance in any manner so as to impair or adversely affect the
power and obligation of the Issuer to levy and collect the Public Service Tax Revenues as
presently in effect or to impair or adversely affect in any manner the pledge of the
proceeds of the Public Service Tax Revenues in the ordinance or the right of the holders
of the Bonds. The Issuer further covenants that it will not repeal, amend or modify the
ordinances or agreements pursuant to which the Franchise Revenues are to be collected
and received in any manner so as to reduce or impair, or adversely affect, the undertaking
of the Issuer to apply the Franchise Revenues as provided herein. The Issuer further
covenants that it will not take any action which will jeoparidze the receipt of the
Guaranteed Entitlement Trust Funds in any way as to reduce or impair, or adversely
affect, the undertaking of the Issuer to apply the Guaranteed Entitlement Trust Funds as
provided herein.
Section 17. APPLICATION OF PROCEEDS OF THE SERIES 1987
• BONDS. All moneys received from the sale of the Series 1987 Bonds shall be deposited
LKL-01/16/87-94A-2547 -28-
by the Issuer in a special account in a bank or trust company and applied by the Issuer as
follows:
(A) All accrued interest shall be deposited in the Sinking Fund and used
solely for the purpose of paying interest on the Series 1987 Bonds.
• (B) A sum which together with, at the discretion of the Issuer, moneys
on deposit in the Reserve Account for the Refunded Bonds, will be equal to the Maximum
Bond Service Requirement on the Series 1987 Bonds becoming due in any Fiscal Year may
be deposited into the Reserve Account, at the option of the Issuer.
(C) To the extent not reimbursed or paid by the original purchaser of
the Series 1987 Bonds, the Issuer shall pay all costs and expenses in connection with the
preparation, issuance and sale of the Series 1987 Bonds.
(D) A sum sufficient to pay all principal of and interest and premium,
if any, on the Government Bonds on the date of payment shall be paid over to the
Government.
(E) A sum specified in the Escrow Deposit Agreement which together
'with the other funds described in the Escrow Deposit Agreement to be deposited in
escrow, will be sufficient to pay, as of any date of calculation, the principal of, interest
on, premium, if any, and other costs and obligations incurred with respect to the Series
1983A Bonds as the same shall become due or are redeemed, as provided by subsequent
resolution of the Issuer and to pay the expenses specified in the Escrow Deposit
Agreeement, shall be deposited into the Escrow Account established in the Escrow
Deposit Agreement, in the amounts sufficient for such purposes.
Such funds shall be kept separate and apart from all other funds of the Issuer
and the moneys on deposit therein shall be withdrawn, used and applied by the Issuer
solely for the purposes set forth herein and in the Escrow Deposit Agreement.
Simultaneously with the delivery of the Series 1987 Bonds to the purchaser
thereof, the Issuer shall enter into an Escrow Deposit Agreeement, in substantially the
form attached hereto as Exhibit "A", with a bank or trust company approved by the Issuer.
Such Escrow Deposit Agreement shall provide for the deposit of sums into the Escrow
Account and for the investment of such moneys in appropriate Federal Securities so as to
produce sufficient funds to make all of the payments described in the first paragraph of
this Subsection 17E. At the time of execution of the Escrow Deposit Agreement, the
Issuer shall furnish to the Escrow Holder named therein appropriate documentation to
demonstrate that the sums being deposited and the investments to be made will be
. sufficient for such purposes.
LKL-01/16/87-94A-2547 -29-
n
(F) The remainder of the proceeds shall be deposited in a special fund
which is hereby created, established and designated as the "Series 1987 Water and Sewer
System Construction Fund" (herein called the "Construction Fund"). There shall be paid
• into the Construction Fund the balance of the moneys remaining after making all the
deposits and payments provided for in paragraphs A to E above.
Such fund shall be accounted for separately from all other accounts of the
Issuer, and the moneys on deposit therein shall be withdrawn, used and applied by the
Issuer solely to the payment of the Cost of the Project and purposes incidental thereto, as
hereinabove described and set forth. If for any reason such proceeds or any part thereof
are not necessary for or are not applied to the payment of such cost, then the unapplied
proceeds shall be applied and allocated by the Issuer into the Reserve Account to the
extent necessary to meet the maximum requirements thereof, and any balance thereafter
shall either be held in the Construction Fund to pay the cost of extensions, additions and
betterments to the System upon the certification of the Consulting Engineer that such
improvements are needed and are economically sound and feasible, or at the option of the
Issuer, may be deposited into the Renewal and Replacement Fund, or at the option of the
Issuer may be deposited into the Sinking Fund herein created. All such proceeds shall be
and constitute trust funds for such purposes, and there is hereby created a lien upon such
moneys until so applied in favor of the Bondholders.
Any funds on deposit in the Construction Fund which, in the opinion of the
Issuer, acting upon the recommendation of the Consulting Engineers, are not immediately
necessary for expenditure, as hereinabove provided, may be invested as provided in
Subsection 16D hereof.
All expenditures or disbursements from the Construction Fund shall be made
only after such expenditures or disbursements shall have been approved in writing by the
Consulting Engineers. The date of completion of the Project shall be determined by the
Consulting Engineers, who will certify such facts in writing to the Issuer.
Section 18. ARBITRAGE. The Issuer at all times while the Bonds are
outstanding will comply with the requirements of Section 148 of the Code and any valid
and applicable rules and regulations promulgated thereunder or under any predecessor
provisions of the Internal Revenue Code of 1954, as amended, including without
limitation, the requirements regarding payment of the Rebate Amount in accordance with
Section 16C of this Resolution.
Section 19. SALE OF THE BONDS. The Bonds shall be issued and sold in
. such manner and at such price or prices consistent with the provisions of the Act and the
LKL-01/16/87-94A-2547 -30-
requirements of this Resolution, all at one time or in installments, from time to tirre, as
the Issuer shall hereafter determine by resolution; provided that the first installment shall
be sold and delivered in an aggregate amount at least sufficient to effect the complete
AML refunding program described in Section 3 of this Resolution; provided, further, that no
NW
installment after the first installment shall be sold unless, at the time of sale, the Issuer
complies with all of the requirements of Section 16R of this Resolution treating such
installment then being sold as if it constituted Additional Bonds hereunder.
Section 20. MODIFICATION OR AMENDMENT. No material modifi-
cation or amendment of this Resolution or of any ordinance or resolution amendatory
hereof or supplemental hereto may be made without the consent in writing of (i) the
insuror under any insurance policy of the Issuer then in force which insures against non-
payment of principal of and redemption premium, if applicable, and interest on, the
Bonds, and (ii) the Registered Owners of two-thirds or more in the principal amount of the
Bonds then outstanding; providing, however, that no modification or amendment shall
permit a change in the maturity of the Bonds or reduction in the rate of interest thereon
or in the amount of the principal obligation thereof or affecting the promise of the Issuer
to pay the principal of and interest on the Bonds as the same shall become due from the
Pledged Revenues or reduce the percentage of Registered Owners required to consent to
1
any material modification or amendment hereof without the consent in writing of any
insuror and of all Registered Owners; provided further, however, that no such
modification or amendment shall allow or permit any acceleration of the payment of
principal of or interest on the Bonds upon any default in the payment thereof whether or
not the insuror and Registered Owners consent thereto.
Section 21. DEFEASANCE AND SUBROGATION. (a) If, at any time, the
Issuer shall have paid, or shall have made provision for payment of, the principal, interest,
redemption premiums, if any, and Rebate Amount, if any, with respect to the Bonds, then,
and in that event, the pledge of and lien on the Pledged Revenues and all covenants herein
in favor of the Bondholders shall be no longer in effect. For purposes of the preceding
sentence, deposit of Federal Securities or bank certificates of deposit fully secured as to
principal and interest by Federal Securities or non -callable tax-exempt bonds (or deposit
of any other securities or investments which may be authorized by law from time to time
and sufficient under such law to effect such a defeasance) in irrevocable trust with a
banking institution or trust company, for the sole benefit of the Bondholders, in respect to
which such Federal Securities or certificates of deposit or non -callable tax-exempt bonds,
0 the principal and interest received will be sufficient to make timely payment of the
LKL-01/16/87-94A-2547 -31-
principal of, interest on, redemption premiums, if any, expenses and any other obligations
of the Issuer incurred with respect to the outstanding Bonds, shall be considered "provision
for payment". Nothing herein shall be deemed to require the Issuer to call any of the
outstanding Bonds for redemption prior to maturity pursuant to any applicable optional
redemption provisions, or to impair the discretion of the Issuer in determining whether to
exercise any such option for early redemption.
(b) In the event any of the principal and redemption premium, if applicable,
and interest due on the Bonds shall be paid by an insuror pursuant to an insurance policy
which insures against non-payment thereof, the pledge of the Pledged Revenues and all
covenants, agreements and other obligations of the Issuer to the Registered Owners to
whom or for the benefit of whom the insuror has made such payments, shall continue to
exist and the insuror shall be subrogated to the rights of such Registered Owners to the
full extent of such payments. -
Section 22. PUBLICATION OF NOTICE OF REFUNDING. Within thirty
(30) days after the delivery of the Series 1987 Bonds, the Issuer shall cause to be published
one time in a newspaper published and of general circulation in the City of Okeechobee,
Florida, and a financial journal published in the Borough of Manhattan, City and State of
New York, a notice of the advance refunding of the Series 1983A Bonds.
Section 23. SEVERABILITY OF INVALID PROVISIONS. If any one or
more of the covenants, agreements or provisions herein contained shall be held contrary
to any express provisions of law or contrary to the policy of express law, though not
expressly prohibited, or against public policy, or shall for any reason whatsoever be held
invalid, then such covenants, agreements or provisions shall be null and void and shall be
deemed separable from the remaining covenants, agreements or provisions and shall in no
way affect the validity of any of the other provisions hereof or of the Bonds issued
hereunder.
Section 24. VALIDATION AUTHORIZED. The City Attorney is author-
ized to prepare and file, in his sole discretion, proceedings in the Circuit Court of the
Nineteenth Judicial Circuit of Florida in and for Okeechobee County, Florida for the
validation of the Series 1987 Bonds, and the proper officers of the Issuer are hereby
authorized to verify on behalf of the Issuer any pleadings in such proceedings.
Section 25. REPEALING CLAUSE. All ordinances or resolutions or parts
thereof of the Issuer in conflict with the provisions herein contained are, to the extent of
such conflict, hereby superseded and repealed.
• Section 26. EFFECTIVE DATE. This Resolution shall take effect
immediately upon adoption.
LKL-01/16/87-94A-2547 -32-
Adopted this 20,gday of 1987.
CITY OF OKEECHOBEE, FLORIDA
►moi, /!/. �:�. � � � .��
(SEAL)
Attest:
City Clerk
LKL-01/16/87-94A-2547 -33-