Section 103-485; Ord. 17431; Authorizing the Issuance of Sewerage System Revenue Refunding Bonds, Series 2002


Ordinance No.     17431            Council Bill No.     B 298-02A   

AN ORDINANCE

authorizing the issuance of Sewerage System Revenue Refunding Bonds, Series 2002, of the City of Columbia, Missouri, for the purpose of refunding prior to maturity certain outstanding sewerage system revenue bonds of the City to achieve interest cost savings; prescribing the form and details of the bonds and the agreements made by the City to facilitate and protect their payment; and prescribing other related matters; and fixing the time when this ordinance shall become effective.

WHEREAS, the City of Columbia, Missouri (the “City”), is a municipal corporation and constitutional charter city, organized and existing under the constitution and laws of the State of Missouri; and

WHEREAS, the City now owns and operates a revenue producing sewerage system serving the City, its inhabitants and others within its service area, including connected and related appurtenances and facilities and extensions, improvements, additions and enlargements made or acquired by the City after the date of this Ordinance (the “System”); and

WHEREAS, the City is authorized under the provisions of Chapter 250 of the Revised Statutes of Missouri (the “Act”) to issue and sell revenue bonds for the purpose of paying all or part of the cost of extending and improving the System, with the cost of operation and maintenance of the System and the principal of and interest on revenue bonds payable solely from the Net Revenues (as defined below); and

WHEREAS, the City has, from time to time pursuant to the Act and approval by not less than a majority of the qualified voters of the City voting thereon, issued and sold its revenue bonds for the purpose of paying all or part of the cost of extending and improving the System, with the cost of operation and maintenance of the System and the principal of and interest on revenue bonds payable solely from the Net Revenues (as defined below); and

WHEREAS, by Ordinance No. 008290 passed on July 10, 1979 (the “Series 1979 Ordinance”), the City has issued its Sewerage System Revenue Bonds, Series 1979 (the “Series 1979 Bonds”), dated August 1, 1979, in the original principal amount of $3,500,000, of which $815,000 remains outstanding as of the date of adoption of this Ordinance; and

WHEREAS, by Ordinance No. 013333 passed on June 1, 1992 (the “Series 1992A Ordinance”), the City has issued its Sewerage System Revenue Bonds, Series 1992 (the “Series 1992A Bonds”), dated June 1, 1992, in the original principal amount of $8,515,000, of which $8,470,000 remains outstanding as of the date of adoption of this Ordinance; and

WHEREAS, by Ordinance No. 13351 passed on June 8, 1992 (the “Series 1992B Ordinance”),, the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1992B (the “Series 1992B Bonds”), dated June 1, 1992, in the original principal amount of $870,000, of which $600,000 remains outstanding as of the date of adoption of this Ordinance; and

WHEREAS, by Ordinance No. 13390 passed on July 20, 1992 (the “Series 1992 Refunding Ordinance”), the City has issued its Sewerage System Refunding Revenue Bonds, Series 1992 (the “Series 1992 Refunding Bonds”), dated August 1, 1992, in the original principal amount of $795,000, of which $100,000 remains outstanding as of the date of adoption of this Ordinance; and

WHEREAS, by Ordinance No. 16011 passed on May 20, 1999 (the “Series 1999A Ordinance”), the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1999 (the “Series 1999A Bonds”), dated June 1, 1999, in the original principal amount of $3,730,000, of which $3,405,000 remains outstanding as of the date of adoption of this Ordinance; and

WHEREAS, by Ordinance No. 016262 passed on November 18, 1999 (the “Series 1999B Ordinance”), the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1999B (the “Series 1999B Bonds”), dated December 1, 1999, in the original principal amount of $1,420,000, of which $1,300,000 remains outstanding as of the date of adoption of this Ordinance; and

WHEREAS, by Ordinance No. 016647 passed on November 2, 2000 (the “Series 2000B Ordinance”), the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 2000B (the “Series 2000B Bonds”), dated November 1, 2000, in the original principal amount of $2,445,000, of which $2,340,000 remains outstanding as of the date of adoption of this Ordinance; and

WHEREAS, by Ordinance No. 107089 passed on November 5, 2001 (the “Series 2001 Ordinance”), the City has issued its Special Obligation Capital Improvement Bonds, Series 2001A (the “Series 2001 Bonds”), dated as of the date of their original issuance and delivery, in the original principal amount of $2,685,000, of which $2,685,000 remains outstanding as of the date of adoption of this Ordinance; and

WHEREAS, by Ordinance No. 107274 passed on April 24, 2002 (the “Series 2002 Ordinance” and, collectively with the Series 1979 Ordinance, the Series 1992A Ordinance, the Series 1992B Ordinance, the Series 1992 Refunding Ordinance, the Series 1999A Ordinance, the Series 1999B Ordinance, the Series 2000B Ordinance and the Series 2001 Ordinance, referred to herein as the “Outstanding Parity Bond Ordinance”), the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 2002 (the “Series 2002 Bonds” and, collectively with the Series 1979 Bonds, the Series 1992A Bonds, the Series 1992B Bonds, the Series 1992 Refunding Bonds, the Series 1999A Bonds, the Series 1999B Bonds, the Series 2000B Bonds and the Series 2001 SOB Bonds, referred to herein as the “Outstanding Parity Bonds”), in the original principal amount of $2,230,000, of which $2,230,000 remains outstanding as of the date of adoption of this Ordinance; and

WHEREAS, the City, upon the issuance of the Bonds, will not have outstanding any other bonds or other obligations payable from the Net Revenues other than the Outstanding Parity Bonds and the Bonds; and

WHEREAS, under the provisions of the Outstanding Parity Bond Ordinance, the City may issue additional bonds payable out of the Net Revenues that are on a parity with the Outstanding Parity Bonds, for the purpose of refunding Outstanding Parity Bonds if certain conditions are met; and

WHEREAS, the City desires to refund the Outstanding Series 1992A Bonds (the “Prior Bonds”) in order to achieve certain debt service savings and to release the City from certain restrictive and burdensome covenants and restrictions imposed by the Prior Ordinance; and

WHEREAS, it is hereby found and determined that it is necessary and advisable and in the best interest of the City and its inhabitants that revenue bonds be issued and secured in the form and manner provided in this Ordinance to refund the Prior Bonds to achieve interest cost savings to the City, subject to the conditions of the Outstanding Parity Bond Ordinance; and

WHEREAS, the City Council of the City has heretofore determined that it is in the best interest of the City to sell said Bonds at a public sale and said bonds have been duly sold at public sale; and

WHEREAS, pursuant to advertisement, bids for the aforesaid Bonds were received on September 5, 2002 and the best offer therefor was submitted by Wachovia Bank, National Association, which bid should now be accepted; and

WHEREAS, it is hereby found and determined that it is necessary and advisable and in the best interest of the City and of its inhabitants that revenue bonds be issued and secured in the form and manner as hereinafter provided to provide funds for the purpose hereinafter set forth;

NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBIA, MISSOURI, AS FOLLOWS:

ARTICLE I

DEFINITIONS

Section 101.     Definitions of Words and Terms.  In addition to the foregoing and words and terms defined in the Recitals and elsewhere in this Ordinance, capitalized words and terms have the following meanings in this Ordinance:  

Accountant” means a certified public accountant or firm of such public accountants.

Annual Depreciation and Replacement Account Requirement” means the amount in Exhibit B.

Bond Counsel” means Thompson Coburn LLP, St. Louis, Missouri, or other attorney or firm of attorneys with a nationally recognized standing in the field of municipal bond financing selected by the City.

Bond Payment Date” means any date on which principal of or interest on any Bond is payable at the Maturity thereof or on any Interest Payment Date.

Bond Register” means the books for the registration, transfer and exchange of Bonds kept at the office of the Paying Agent.

Bond Year” means a one year period beginning October 2 of each year and ending on October 1 of the next succeeding year.

Bondowner,” “Owner” or “Registered Owner” when used with respect to any Bond means the Person in whose name such Bond is registered on the Bond Register.

Bonds” means the Sewerage System Revenue Refunding Bonds, Series 2002, of the City, in the aggregate principal amount of $7,940,000, authorized and issued pursuant to this Ordinance.

Business Day” means a day other than a Saturday, Sunday or holiday on which the Paying Agent shall be scheduled in the normal course of its operations to be open to the public for conduct of its banking operations.

Calculation Date” means the Business Day immediately preceding October 1 of each year.

Cede & Co.” means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to the Bonds.

City” means the City of Columbia, Missouri, and any successors and assigns.

Code” means the Internal Revenue Code of 1986, as amended, or any corresponding applicable provisions of succeeding law, and the applicable temporary, proposed and final regulations relating thereto.

Consultant” means the Consulting Engineer, an independent certified public accountant or a firm of independent certified public accountants.

Consulting Engineer” means each independent engineer or engineering firm with experience in designing and constructing wastewater treatment, sanitary sewerage or water pollution control facilities and retained by the City.

Continuing Disclosure Certificate” shall mean that certain Continuing Disclosure executed by the City and dated as of July 1, 2002, as originally executed and as it may be amended from time to time in accordance with the terms thereof.  

Costs of Issuance Account” means the account by that name created by this Ordinance.

Current Expenses” means all reasonable and necessary expenses of ownership, operation, maintenance and repair of the System and keeping the System in good repair and working order, determined in accordance with generally accepted accounting principles, including current maintenance charges, expenses of reasonable upkeep and repairs, salaries, wages, costs of materials and supplies, Paying Agent fees and expenses, annual audits, periodic Consultant’s reports, properly allocated share of charges for insurance, the cost of purchased water, gas and power, obligations (other than for borrowed money or for rents payable under capital leases) incurred in the ordinary course of business, liabilities incurred by endorsement for collection or deposit of checks or drafts received in the ordinary course of business, short-term obligations incurred and payable within a particular Fiscal Year, obligations incurred for the purpose of leasing (pursuant to a true or operating lease) equipment, fixtures, inventory or other personal property, and all other expenses incident to the ownership and operation of the System, but excluding interest paid on System Revenue Bonds, depreciation and amortization charges (including payments into the Depreciation and Replacement Account), and all general administrative expenses of the City not related to the operation of the System.

Debt Service Account” means the account by that name created in Section 402 of this Ordinance.

Debt Service Reserve Account” means the account by that name created in Section 402 of this Ordinance.

Debt Service Reserve Account Surety Bond” means, (i) initially, the Municipal Bond Debt Service Reserve Fund Policy issued by Financial Guaranty Insurance Company which unconditionally guarantees the payment of that portion of the principal of and interest on the Bonds which has become due for payment, but shall be unpaid by reason of nonpayment by the City, up to a maximum amount equal to the Debt Service Reserve Requirement Series 2002, and (ii) any other irrevocable insurance policy, letter of credit or surety bond satisfying the requirements described in Section 605 hereof which guarantees payments into the Debt Service Reserve Account or payment of the principal of and interest on the Bonds in an amount which, together with cash or Permitted Investments on deposit in the Debt Service Reserve Account, is equal to the Debt Service Reserve Requirement Series 2002.

Debt Service Reserve Fund Policy Agreement” means the Debt Service Reserve Fund Policy Agreement dated as of the date of issuance of the Bonds between Financial Guaranty Insurance Company, as the issuer of the initial Debt Service Reserve Account Surety Bond, and the City, relating, among other things, to the repayment of amounts drawn on such initial Debt Service Reserve Account Surety Bond.

Debt Service Reserve Requirement Series 2002” means the sum of $743,962.50.

Defeasance Securities” means:

(a)    Federal Securities;

(b)    obligations of the Resolution Funding Corporation or any successor, but only if the use of the obligations to pay and discharge Bonds pursuant to Article XI will cause the discharged Bonds to be rated in the highest long-term rating category by the Rating Agency; or

(c)    obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any state that:

(1)    are not callable at the option of the obligor prior to maturity or for which irrevocable instructions have been given by the obligor to call on the date specified in the instructions, and

(2)    are fully secured as to principal, redemption premium and interest by a fund, consisting of cash or Federal Securities, that:

(A)    may be applied only to the payment of principal, redemption premium and interest on the obligations, and

(B)    is sufficient, as verified by a nationally recognized independent certified public accountant, to pay the principal, redemption premium and interest on the obligations.

Depreciation and Replacement Account” means the fund or account created or ratified and confirmed by Section 401.

DTC” means The Depository Trust Company of New York, New York.

Federal Securities” means any direct obligation of, or obligation the timely payment of the principal of and interest on which is unconditionally guaranteed by, the United States of America and backed by its full faith and credit.

Fiscal Year” means the fiscal year of the City, currently the twelve-month period beginning October 1 and ending September 30.

Interest Payment Date” means the stated maturity of an installment of interest on any Bond.

Maturity” when used with respect to any Bond means the date on which the principal of such Bond becomes due and payable, whether at stated maturity or by call for redemption or otherwise, as therein and herein provided.

Maximum Depreciation and Replacement Account Requirement” means the amount in Exhibit B.

Net Revenues” means Revenues less Current Expenses.

Net Revenues Available for Debt Service” means, for the period of determination, Revenues less Current Expenses.

Operation and Maintenance Account” means the fund or account created or ratified and confirmed by Section 401.

Ordinance” means this Ordinance as from time to time amended in accordance with its terms.

Outstanding” means, as of the date of determination, all Bonds issued and delivered under this Ordinance, except:

(1)    Bonds cancelled by the Paying Agent or delivered to the Paying Agent for cancellation;

(2)    Bonds for the payment of the principal or redemption price of and interest on which money or Defeasance Securities are held under Section 1101;

(3)    Bonds in exchange for which, or in lieu of which, other Bonds have been registered and delivered pursuant to this Ordinance; and

(4)    Bonds allegedly mutilated, destroyed, lost, or stolen and paid under Section 208.

Owner” means the Bondowner.

Parity Bonds” means the Outstanding Parity Bonds and any parity bonds issued under Section 902 payable from the Net Revenues on a parity basis with the Bonds.

Parity Ordinances” means the Outstanding Parity Bond Ordinance and the Ordinances under which any other Parity Bonds are issued.

Participant” means any broker-dealer, bank or other financial institution for which DTC holds Bonds as securities depository.

Participating Underwriter” shall have the meaning ascribed thereto in the Continuing Disclosure Certificate.

Paying Agent” means UMB Bank, n.a., and any successors and assigns.

Permitted Investments” means any of the following securities and obligations, if and to the extent the same are at the time legal for investment of the City’s funds:

(a)    United States Government Obligations;

(b)    direct obligations of any agency or instrumentality of the United States of America;

(c)    bonds, notes or other obligations of the State of Missouri, or any political subdivision of the State of Missouri, rated by Standard & Poor's Ratings Services and Moody's Investors Service in the two highest rating categories;

(d)    repurchase agreements with any bank, bankholding company, savings and loan association, trust company, or other financial institution rated by Standard & Poor's Ratings Services and Moody's Investors Service in the two highest rating categories and organized under the laws of the United States or any state, that are continuously and fully secured by any one or more of the securities described in clause (a), (b) or (c) above and have a market value, exclusive of accrued interest, at all times at least equal to the principal amount of such repurchase agreement and are held in a custodial or trust account for the benefit of the City;

(e)    certificates of deposit, time deposits, or interest bearing accounts of any bank or savings and loan company organized under the laws of the United States or any state, provided that such certificates of deposit, time deposits or interest bearing accounts shall be either (1) continuously and fully insured by the Federal Deposit Insurance Corporation, or (2) to the extent not insured by the Federal Deposit Insurance Company, are fully insured by United States Government Obligations;

(f)    money market funds comprised of any of the investments set forth in paragraphs (a) through (e) above;

(g)     such other investments as the Director of Finance of the City is authorized to purchase as investment instruments pursuant to the City's investment policy.

Person” means any natural person, corporation, partnership, firms joint venture, association, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof or other public body.

Prior Bond Ordinance” means the Series 1992A Bond Ordinance.

Prior Bonds” means the Outstanding Series 1992A Bonds.

Purchaser” means, Wachovia Bank, National Association, the original purchaser of the Bonds.

Rebate Fund” means the fund by that name created in Section 401 hereof.

Record Date” for the interest payable on any interest payment date means the 15th day (whether or not a Business Day) of the calendar month next preceding such interest payment date.

Representation Letter” means any applicable Representation Letter from the City or the Paying Agent to DTC with respect to the Bonds.

Revenue Fund” means the fund or account created or ratified and confirmed by Section 401.

Revenues” means all income and revenues derived by the City from the System, including investment and rental income, net proceeds from business interruption insurance, sales tax revenues which have been annually appropriated by the City or which are limited solely to the payment of improvements to or expenses of the System and any amounts deposited in escrow in connection with the acquisition, construction, remodeling, renovation and equipping of facilities to be applied during the period of determination to pay interest on System Revenue Bonds, but excluding any profits or losses on the early extinguishment of debt or on the sale or other disposition of investments or fixed or capital assets not in the ordinary course of business.

SRF Indenture” means the Indentures securing the SRF Program Bonds.

SRF Program Bonds” means the Series 1992B Bonds, the Series 1999A Bonds, the Series 1999B Bonds, the Series 2000B Bonds and the Series 2002 Bonds.

State” means the State of Missouri.

Surplus Account” means the fund or account created or ratified and confirmed by Section 401.

System Revenue Bonds” means collectively the Bonds, the Parity Bonds and all other revenue bonds which are payable from the Net Revenues.

ARTICLE II

AUTHORIZATION OF BONDS

Section 201.     Authorization of Bonds.  There shall be issued and hereby are authorized and directed to be issued the Sewerage System Refunding Revenue Bonds, Series 2002, of the City in the principal amount of Seven Million Nine Hundred Forty Thousand Dollars ($7,940,000) (the “Bonds”), for the purpose of refunding the Prior Bonds.  The Bonds herein authorized shall be issued pursuant to Article VI, Section 27 of the Missouri Constitution, the provisions of Section 108.140 and Chapter 250 of the Missouri Revised Statutes, as amended, and all laws amendatory thereof and supplemental thereto, and other applicable provisions of law, elections held by the City, wherein more than a majority of the qualified voters voting thereon voted in favor of the issuance of the Prior Bonds as provided in the Prior Ordinances, and the provisions of the Outstanding Parity Bond Ordinance.

Section 202.     Security for Bonds.

(a)    The Bonds are special, limited obligations of the City payable solely from, and secured by a pledge of, the Net Revenues.  The taxing power of the City is not pledged to the payment of the Bonds.  The Bonds do not constitute a general obligation of the City or an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction.

(b)    The Bonds are issued on a parity with the Outstanding Parity Bonds.

Section 203.     Description of Bonds.  The Bonds shall consist of fully registered bonds without coupons in denominations of $5,000 or any integral multiple thereof, numbered from R-1 consecutively upward.  The Bonds shall be substantially in the form set forth in Exhibit A attached hereto, and shall be subject to registration, transfer and exchange as provided in Section 206 hereof.  The Bonds shall be dated as of September 15, 2002, shall become due on the following Maturity dates and shall bear interest at the rates per annum, as follows:



    Maturity    Principal    Annual Rate
     October 1    Amount    of Interest

    2003    185,000    2.000%
    2004    200,000    2.000%
    2005    495,000    2.000%
    2006    500,000    2.500%
    2007    515,000    2.500%
    2008    530,000    3.000%
    2009    540,000    3.000%
    2010    560,000    3.500%
    2011    570,000    3.500%
    2012    590,000    3.500%
    2013    610,000    3.625%
    2014    630,000    3.750%
    2015    650,000    4.000%
    2016    670,000    4.000%
    2017    695,000    4.000%

The Bonds shall bear interest at the above-specified rates (computed on the basis of a 360-day year of twelve 30-day months) from the date thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable semiannually on October 1 and April 1 in each year, beginning on April 1, 2003.

Each of the Bonds, as originally issued or issued upon transfer, exchange or substitution, shall be in substantially the form set forth in Exhibit A attached hereto

Section 204.     Designation of Paying Agent.  UMB Bank, N.A., St. Louis, Missouri, is hereby designated as the City’s paying agent for the payment of principal of and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds (herein called the “Paying Agent”).

The City will at all times maintain a Paying Agent meeting the qualifications herein described for the performance of the duties hereunder.  The City reserves the right to appoint a successor Paying Agent to perform the duties of paying agent and bond registrar by (1) filing with the bank or trust company then performing such function a certified copy of the proceedings giving notice of the termination of such bank or trust company and appointing a successor, and (2) causing notice to be given to each Bondowner.  No resignation or removal of the Paying Agent shall become effective until a successor has been appointed and has accepted the duties of the Paying Agent.  The City shall provide the issuer of each Debt Service Reserve Account Surety Bond with written notice of the resignation or removal of any Paying Agent and the appointment of a successor thereto, such notice, in the case of Financial Guaranty Insurance Company, to be sent to 125 Park Avenue, New York, New York, 10017, Attention:  Risk Management, or such other address as shall be specified in writing by Financial Guaranty Insurance Company.

Every Paying Agent appointed hereunder shall at all times be a commercial banking association or corporation or trust company located in the State of Missouri organized and doing business under the laws of the United States of America or of the State of Missouri, authorized under such laws to exercise trust powers and subject to supervision or examination by federal or state regulatory authority.

The Paying Agent shall be paid the usual fees for its services in connection therewith, which fees shall be paid as other expenses are paid.

Section 205.     Method and Place of Payment of Bonds.  The principal of and interest on the Bonds shall be payable in any coin or currency of the United States of America that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts.

The principal of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the payment office of the Paying Agent.

The interest payable on each Bond on any Interest Payment Date shall be paid to the Person in whose name such Bond is registered on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Paying Agent to such Registered Owner at the address shown on the Bond Register or (b) at such other address as is furnished to the Paying Agent in writing by such Registered Owner or (c) in the case of an interest payment to any Owner of $100,000 or more in aggregate principal amount of Bonds, by wire transfer to such Registered Owner upon written notice given to the Paying Agent by such Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the wire transfer address (which shall be in the continental United States) to which such Registered Owner wishes to have such wire directed.

Notwithstanding the foregoing provisions of this Section, any defaulted interest with respect to any Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified in this paragraph.  The City shall notify the Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Paying Agent) and shall deposit with the Paying Agent at the time of such notice an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment.  Following receipt of such funds the Paying Agent shall fix a special record date for the payment of such defaulted interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment (the “Special Record Date”).  The Paying Agent shall promptly notify the City of such Special Record Date and, in the name and at the expense of the City, shall cause notice of the proposed payment of such defaulted interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Owner of a Bond entitled to such notice at the address of such Owner as it appears on the Bond Register not less than 10 days prior to such Special Record Date.

The Paying Agent shall keep a record of payment of principal of and interest on all Bonds and shall at least annually forward a copy or summary of such records to the City.

Section 206.     Registration, Transfer and Exchange of Bonds.  The City covenants that, as long as any of the Bonds remain Outstanding, it will cause the Bond Register to be kept at the office of the Paying Agent for the registration, transfer and exchange of Bonds as herein provided.  Each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register kept by the Paying Agent.  Bonds may be transferred and exchanged only on the Bond Register maintained by the Paying Agent as provided in this Section.  Upon surrender of any Bond at the principal corporate trust office of the Paying Agent, the Paying Agent shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange.  Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Paying Agent, duly executed by the Registered Owner thereof or by the Registered Owner’s duly authorized agent.  All Bonds presented for transfer or exchange shall be surrendered to the Paying Agent for cancellation.

In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Paying Agent shall authenticate and deliver Bonds in accordance with the provisions of this Ordinance.  The City shall pay the fees and expenses of the Paying Agent for the registration, transfer and exchange of Bonds provided for by this Ordinance and the cost of printing a reasonable supply of registered bond blanks.  Any additional costs or fees that might be incurred in the secondary market, other than fees of the Paying Agent, are the responsibility of the Registered Owners of the Bonds.

The City and the Paying Agent shall not be required to register the transfer or exchange any Bond during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant to Section 205 hereof.

The City and the Paying Agent may deem and treat the Person in whose name any Bond shall be registered in the Bond Register as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on said Bond and for all other purposes.  All payments so made to any such Registered Owner or upon the Registered Owner’s order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City nor the Paying Agent shall be affected by any notice to the contrary.

At reasonable times and under reasonable regulations established by the Paying Agent, the Bond Register may be inspected and copied by the Owners (or a designated representative thereof) of 10% or more in principal amount of the Bonds then Outstanding or any designated representative of such Owners to be evidenced to the satisfaction of the Paying Agent.

Section 207.     Execution, Authentication and Delivery of Bonds.  Each of the Bonds, including any Bonds issued in exchange or as substitution for the Bonds initially delivered, shall be signed by the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of the City Clerk, and countersigned by the manual or facsimile signature of the Director of Finance of the City, and shall have the official seal of the City affixed thereto or imprinted thereon.  In case any officer whose signature appears on any Bonds shall cease to be such officer before the delivery of such Bonds, such signature shall nevertheless be valid and sufficient for all purposes, as if such person had remained in office until delivery.  Any Bond may be signed by such persons who at the actual time of the execution of such Bond shall be the proper officers to sign such Bond although at the date of such Bond such persons may not have been such officers.

The Mayor, City Clerk and Director of Finance are hereby authorized and directed to prepare and execute the Bonds as herein specified, and when duly executed, to deliver the Bonds to the Paying Agent for authentication.

The Bonds shall have endorsed thereon a certificate of authentication substantially in the form set forth in Exhibit A attached hereto, which shall be manually executed by an authorized officer or employee of the Paying Agent, but it shall not be necessary that the same officer or employee sign the certificate of authentication on all of the Bonds that may be issued hereunder at any one time.  No Bond shall be entitled to any security or benefit under this Ordinance or be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Paying Agent.  Such executed certificate of authentication upon any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Ordinance.  Upon authentication, the Paying Agent shall deliver the Bonds to the Purchaser of the Bonds, upon payment of the purchase price thereof.

Section 208.     Mutilated, Destroyed, Lost and Stolen Bonds .  If (a) any mutilated Bond is surrendered to the Paying Agent, or the City and the Paying Agent receive evidence to their satisfaction of the mutilation, destruction, loss or theft of any Bond, and (b) there is delivered to the City and the Paying Agent such security or indemnity as may be required by each of them, then, in the absence of notice to the City or the Paying Agent that such Bond has been acquired by a bona fide purchaser, the City shall execute and, upon the City’s request, the Paying Agent shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same Maturity and of like tenor and principal amount.

In case any such mutilated, destroyed, lost or stolen Bond has become or is about to become due and payable, the City, in its discretion may pay such Bond instead of issuing a new Bond.

Upon the issuance of any new Bond under this Section, the City may require the payment by the Registered Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent) connected therewith.

Every new Bond issued pursuant to this Section shall constitute a replacement of the prior obligation of the City, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds.

Section 209.     Cancellation and Destruction of Bonds Upon Payment.  All Bonds that have been paid or redeemed or that otherwise have been surrendered to the Paying Agent, either at or before Maturity, shall be cancelled by the Paying Agent immediately upon the payment and surrender thereof to the Paying Agent and subsequently destroyed in accordance with the customary practices of the Paying Agent.  The Paying Agent shall execute a certificate in duplicate describing the Bonds so cancelled and destroyed and shall file an executed counterpart of such certificate with the City.

Section 210.     Securities Depository .  

(a)    The Bonds shall be initially issued as separately authenticated fully registered bonds, and one Bond shall be issued in the principal amount of each stated maturity of the Bonds.  Upon initial issuance, the ownership of such Bonds shall be registered in the Bond Register in the name of Cede & Co., as nominee of DTC.  The Paying Agent and the City may treat DTC (or its nominee) as the sole and exclusive Owner of the Bonds registered in its name for the purposes of payment of the principal of, premium, if any, or interest on the Bonds, selecting the Bonds or portions thereof to be redeemed, giving any notice permitted or required to be given to Owners of Bonds under this Ordinance, registering the transfer of Bonds, and for all other purposes whatsoever; and neither the Paying Agent nor the City shall have any responsibility or obligation to any Participant, any person claiming a beneficial ownership interest in the Bonds under or through DTC or any Participant, or any other person which is not shown on the Bond Register as being a Owner of any Bonds, with respect to the accuracy of any records maintained by DTC or any Participant, with respect to the payment by DTC or any Participant of any amount with respect to the principal of, premium, if any, or interest on the Bonds, with respect to any notice which is permitted or required to be given to Owners of Bonds under this Ordinance, with respect to the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of the Bonds, or with respect to any consent given or other action taken by DTC as the Owner of the Bonds.  So long as any Bond is registered in the name of Cede & Co., as nominee of DTC, the Paying Agent shall pay all principal of, premium, if any, and interest on such Bonds, and shall give all notices with respect to such Bonds, only to Cede & Co. in accordance with the Representation Letter, and all such payments shall be valid and effective to fully satisfy and discharge the City’s obligations with respect to the principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid.  No person other than DTC, or the Paying Agent on behalf of DTC, shall receive an authenticated Bond for each separate stated maturity evidencing the obligation of the City to make payments of principal and interest.  Upon delivery by DTC to the Paying Agent of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the Bonds will be transferable to such new nominee in accordance with paragraph (d) hereof.

(b)    In the event the City determines that it is in the best interest of the Beneficial Owners that they be able to obtain Bond certificates, the City may notify DTC and the Paying Agent, whereupon DTC shall notify the Participants of the availability through DTC of Bond certificates.  In such event, the Bonds will be transferable in accordance with paragraph (d) hereof.  DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and the Paying Agent and discharging its responsibilities with respect thereto under applicable law.  In such event, the Bonds will be transferable in accordance with paragraph (d) hereof.  The City and the Paying Agent shall be entitled to rely conclusively on the information provided to each of them by DTC and its Participants as to the names of the beneficial owners of the Bonds.

(c)    The execution and delivery of the Representation Letter to DTC by the City Manager, Director of Finance, City Clerk or other authorized officer of the City, in the form presented to the City Council of the City herewith, with such changes, omissions, insertions and revisions as the officers of the City signing such Representation Letter shall deem advisable, is hereby authorized, and execution of the Representation Letter by such officers of the City shall be conclusive evidence of such approval.  The Representation Letter shall set forth certain matters with respect to, among other things, notices, consents and approvals by Owners of the Bonds and Beneficial Owners and payments on the Bonds.  The Paying Agent shall have the same rights with respect to its actions thereunder as it has with respect to its actions under this Ordinance.

(d)    In the event that any transfer or exchange of Bonds is permitted under paragraph (a) or (b) hereof, such transfer or exchange shall be accomplished upon receipt by the Paying Agent of the Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted transferee in accordance with the provisions of this Ordinance.  In the event Bond certificates are issued to holders other than Cede & Co., or its successor as nominee for DTC as holder of all of the Bonds, the provisions of this Ordinance shall also apply to all matters relating thereto, including, without limitation, the printing of such certificates and the method of payment of principal of and interest on such certificates.

Section 211.     Acceptance of Bid.  The Bonds, bearing interest as set forth in Section 201 hereof, shall be and are hereby awarded to the Purchaser at a purchase price of $7,913,479.50, plus accrued interest to the date of delivery of said Bonds, if any, and at a true interest cost of 3.594%, all in accordance with the terms of sale as set forth in the Notice of Bond Sale and in the Proposal for the Purchase of Sewerage System Refunding Revenue Bonds, Series 2002 of the City of Columbia, Missouri, as authorized in the resolution adopted by the City Council on September 5, 2002.

ARTICLE III

REDEMPTION OF BONDS

Section 301.     Redemption.  At the option of the City, the Bonds maturing on October 1, 2013 and thereafter are subject to optional redemption and payment prior to their Maturity, on October 1, 2012, and thereafter, in whole at any time or in part on any Interest Payment Date in any order of maturity selected by the City and by lot in multiples of $5,000 within a maturity, at a redemption price of 100% of the principal amount being redeemed, without premium, together with accrued interest thereon to the date of redemption.

Section 302.     Notice of Redemption.  Notice of the City’s intent to redeem Bonds (including, when only a portion of the Bonds are to be redeemed, the maturities of such Bonds and the principal amounts thereof) shall be given by or on behalf of the City by United States registered or certified mail, postage prepaid, to the Paying Agent, said notice to be mailed not less than forty-five (45) days prior to the date fixed for redemption.  Notice of the selection or call for redemption identifying the Bonds or portions thereof to be redeemed, shall be given by the Paying Agent on behalf of the City by mailing a copy of the redemption notice at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption by registered or certified mail to the Purchaser and by first class, registered or certified mail to the Owner of each Bond to be redeemed in whole or in part at the address shown on the registration books; and a second notice of redemption shall be sent by certified mail, return receipt requested, at such address to the Owner of any Bond who has not submitted his Bond to the Paying Agent for payment on or before the date sixty (60) days following the date fixed for redemption; provided, however, that neither any defect in giving such notice by mailing as aforesaid nor any defect in any notice so mailed shall affect the validity of any proceeding for the redemption of any Bond. Any notice mailed as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives the notice.

Each notice of redemption shall state (i) the complete official caption, including the Bond series, of the Bonds; (ii) the date of mailing of the notice of redemption, (iii) the date fixed for redemption; (iv) the redemption price or prices; (v) the CUSIP numbers of all Bonds being redeemed; (vi) in the case of a partial redemption of Bonds, the principal amount of each Bond being redeemed; (vii) the date of issue of the Bonds as originally issued; (viii) the rate or rates of interest borne by each Bond being redeemed; (ix) the maturity date of each Bond being redeemed; (x) the place or places where amounts due upon such redemption will be payable; (xi) the notice shall be void and of no effect in the event the Paying Agent does not have sufficient money to pay the redemption price of the Bonds on the redemption date; and (xii) the address and telephone number of the contact person at the office of the Paying Agent with respect to such redemption.  The notice shall require that such Bonds be surrendered at the principal corporate trust office of the Paying Agent for redemption at the redemption price and shall state that further interest on such Bonds will not accrue from and after the redemption date, provided the Paying Agent has on deposit sufficient funds to redeem the Bonds on such date.

Notice of such redemption shall also be sent by certified mail, return receipt requested, overnight delivery service or other secure means (including telecopier transmission), postage prepaid, to certain municipal registered securities depositories which are known to the Paying Agent to be holding Bonds and at least two of the national information services that disseminate securities redemption notices, when possible, at least two days prior to the mailing of notice required by the first paragraph above, but in any event at least thirty (30) days prior to the redemption date; provided that neither the failure to send such notice as aforesaid nor any defect in such notice shall affect the validity or sufficiency of the proceedings for the redemption of such Bonds.

Section 303.     Selection of Bonds to Be Redeemed .  Bonds shall be selected for redemption as follows:

(a)    Bonds shall be redeemed only in the principal amount of $5,000 or any integral multiple thereof.  When less than all of the Outstanding Bonds of any maturity are to be redeemed and paid prior to maturity, such Bonds shall be selected by the Paying Agent by lot in $5,000 units of face value in such equitable manner as the Paying Agent may determine.

(b)    In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than $5,000 are then Outstanding, then for all purposes in connection with such redemption each $5,000 of face value shall be treated as though it were a separate Bond of the denomination of $5,000.  If it is determined that one or more, but not all, of the $5,000 units of face value represented by any Bond is selected for redemption, then upon notice of intention to redeem such $5,000 unit or units, the Owner of such Bond or his attorney or legal representative shall forthwith present and surrender such Bond to the Paying Agent (1) for payment of the redemption price (including the premium, if any, and interest to the date fixed for redemption) of the $5,000 unit or units of face value called for redemption, and (2) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond.  If the Owner of any such Bond of a denomination greater than $5,000 shall fail to present such Bond to the Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the $5,000 unit or units of face value called for redemption (and to that extent only).

Section 304.     Effect of Call for Redemption .   Whenever any Bond is called for redemption and payment as provided in this Article, all interest on such Bond shall cease from and after the date for which such call is made, provided funds are available for its payment at the price hereinbefore specified.

ARTICLE IV
RATIFICATION OF FUNDS AND ACCOUNTS
Section 401.     Ratification of Funds and Accounts .

(a)    The separate funds and accounts created in, or ratified and confirmed by, the Series 1979 Ordinance known respectively as the:

(1)    Sewer Revenue Account (the “Revenue Fund”);

(2)    Sewer Operation and Maintenance Account (the “Operation and Maintenance Account”);

(3)    Principal and Interest Account for Sewerage System Revenue Bonds, Series 1979 (the “Series 1979 Debt Service Account”);

(4)    Reserve Account for Sewerage System Revenue Bonds, Series 1979 (the “Series 1979 Debt Service Reserve Account”);

(5)    Sewer Contingency Account (the “Depreciation and Replacement Account”); and

(6)    Sewer Surplus Account (the “Surplus Account”);

are ratified and confirmed.

(b)    The separate accounts created in Section 501 of the Series 1992A Ordinance known respectively as the:

(1)    Debt Service Account for Sewerage System Revenue Bonds, Series 1992 (the “Series 1992A Debt Service Account”); and

(2)    Debt Service Reserve Account for Sewerage System Revenue Bonds, Series 1992 (the “Series 1992A Debt Service Reserve Account”);

are ratified and confirmed.

(c)    The separate accounts acknowledged under Section 503 of the Series 1992B Ordinance known respectively as the:

(1)    Interest Account, Principal Account and Debt Service Account for the Series 1992B Bonds (collectively the “Series 1992B Debt Service Account”); and

(2)    Reserve Account for the Series 1992B Bonds (the “Series 1992B Debt Service Reserve Account”);

are acknowledged.

(d)    The separate accounts created in Section 501 of the Series 1992 Refunding Ordinance known respectively as the:

(1)    Debt Service Account for Sewerage System Refunding Revenue Bonds, Series 1992 (the “Series 1992 Refunding Debt Service Account”); and

(2)    Debt Service Reserve Account for Sewerage System Refunding Revenue Bonds, Series 1992 (the “Series 1992 Refunding Debt Service Reserve Account”);

are ratified and confirmed.

(e)    The separate accounts acknowledged under Section 403 of the Series 1999A Ordinance known respectively as the:

(1)    Interest Account, Principal Account and Debt Service Account for the Series 1999A Bonds (collectively the “Series 1999A Debt Service Account”); and

(2)    Reserve Account for the Series 1999A Bonds (the “Series 1999A Debt Service Reserve Account”);

are acknowledged.

(f)    The separate accounts acknowledged under Section 403 of the Series 1999B Ordinance known respectively as the:

(1)    Debt Service Account, Principal Account and Interest Account (the “Series 1999B Debt Service Account”); and

(2)    Reserve Account (the “Series 1999B Debt Service Reserve Account”);

are acknowledged.

(g)    The separate accounts acknowledged under Section 403 of the Series 2000B Ordinance known respectively as the:

(1)    Debt Service Account, Principal Account and Interest Account (the “Series 2000B Debt Service Account”); and

(2)    Reserve Account (the “Series 2000B Debt Service Reserve Account”);

are acknowledged.

(h)    The separate accounts created under Section 402 of the Series 2001 Ordinance known respectively as the:

(1)    Debt Service Account for Special Obligation Capital Improvement Bonds, Series 2001A (the “Series 2001A Debt Service Account”); and

(2)    Debt Service Reserve Account for Special Obligation Capital Improvement Bonds, Series 2001A (the “Series 2001A Debt Service Reserve Account”);

are ratified and confirmed.

(i)        The separate accounts acknowledged under Section 402 of the Series 2002 Ordinance known respectively as the:

(1)    Debt Service Account, Principal Account and Interest Account (the “Series 2002 Debt Service Account”, and collectively with the Series 2001A Debt Service Account, the Series 2000B Debt Service Account,  the 1999B Debt Service Account, the Series 1999A Debt Service Account, the Series 1992A Debt Service Account, the Series 1992B Debt Service Account, the Series 1992 Refunding Debt Service Account and the Series 1979 Debt Service Account, the “Outstanding Parity Bond Debt Service Account”); and

(2)    Reserve Account (the “Series 2002 Debt Service Reserve Account,” and collectively with the Series 2001A Debt Service Reserve Account, the Series 2000B Debt Service Reserve Account, the Series 1999B Debt Service Reserve Account, the Series 1999A Debt Service Reserve Account, the Series 1992A Debt Service Reserve Account, the Series 1992B Debt Service Reserve Account, the Series 1992 Refunding Debt Service Reserve Account and the Series 1979 Debt Service Reserve Account, the “Outstanding Parity Bond Debt Service Reserve Account”);

are acknowledged.

Section 402.     Establishment of Funds and Accounts.  There are hereby created and ordered to be established and maintained in the treasury of the City the following separate funds and accounts to be known respectively as the:

(a)    Debt Service Account for Sewerage System Revenue Refunding Bonds, Series 2002 (the “Debt Service Account”).

(b)    Debt Service Reserve Account for Sewerage System Revenue Refunding Bonds, Series 2002 (the “Debt Service Reserve Account”).

(c)    Costs of Issuance Account for Sewerage System Revenue Refunding Bonds, Series 2002 (the “Costs of Issuance Account”).

(d)    Rebate Fund for Sewerage System Revenue Refunding Bonds, Series 2002 (the “Rebate Fund”).

Section 403.     Administration of Funds and Accounts.  The funds and accounts described in clauses (a)(1), (2), (5) and (6) of Section 401 will be maintained and administered by, or on behalf of, the City under this Ordinance and the Outstanding Parity Bond Ordinance while any of the Bonds or the Outstanding Parity Bonds are outstanding.  The funds or accounts described in clauses (3) and (4) of Section 401(a) will be maintained and administered by the City while any of the Series 1979 Bonds remain Outstanding and unpaid.  The accounts described in Section 401(b) will be maintained and administered by the City while any of the Series 1992A Bonds are outstanding.  The accounts acknowledged in Section 401(c) will be maintained and administered by the Trustee designated in the Series 1992B Ordinance while any of the Series 1992B Bonds are outstanding.  The accounts described in Section 401(d) will be maintained and administered by the City while any of the Series 1992 Refunding Bonds are outstanding.  The accounts acknowledged in Section 401(e) will be maintained and administered by the Trustee designated in the Series 1999A Ordinance while any of the Series 1999A Bonds are outstanding.  The accounts described in Section 401(f) will be maintained and administered, by the Trustee designated in the Series 1999B Ordinance while any of the Series 1999B Bonds are outstanding.  The accounts described in Section 401(g) will be maintained and administered, by the Trustee designated in the Series 2000B Ordinance while any of the Series 2000B Bonds are outstanding.   The accounts described in Section 401(h) will be maintained and administered, by the Trustee designated in the Series 2001 Ordinance while any of the Series 2001 Bonds are outstanding.  The accounts described in Section 401(i) will be maintained and administered, by the Trustee designated in the Series 2002 Ordinance while any of the Series 2002 Bonds are outstanding. The accounts described in Section 402 will be maintained and administered by the City while any of the Bonds are outstanding.  The funds and accounts referred to in paragraphs (a) through (d) of Section 402 hereof shall be maintained and administered by the City or the Paying Agent, as the case may be, solely for the purposes and in the manner as provided in this Ordinance so long as any of the Bonds remain outstanding within the meaning of this Ordinance. The Director of Finance of the City may allocate such funds and accounts on the books and records of the City as deemed necessary or desirable to reflect the sources of revenues and projects to be funded from the Bonds.

ARTICLE V

APPLICATION OF BOND PROCEEDS

Section 501.     Disposition of Bond Proceeds .  The proceeds received from the sale of the Bonds, including any premium or accrued interest thereon, shall be deposited simultaneously with the delivery of the Bonds as follows:

(a)    The accrued interest and premium, if any, shall be deposited in the Debt Service Account.

(b)    The sum of $26,038.69 shall be paid to Financial Guaranty Insurance Company in payment of the premium for the issuance of the initial Debt Service Reserve Account Surety Bond.

(c)    The remaining proceeds of the Bonds shall be deposited in the Series 1992A Debt Service Account.

Section 502.     Disposition of Other Moneys.  Concurrently with the issuance and delivery of the Bonds, the City shall pay and credit from moneys on hand and available for such purposes, the following amounts:

(a)    There shall be deposited in the Series 1992A Debt Service Account pursuant to the Series 1992A Ordinance all moneys on deposit in 1992A Debt Service Reserve Account and other available funds of the City in an amount sufficient, together with all other moneys on deposit therein, to pay the Outstanding principal of, redemption premium and interest on the Series 1992A Bonds.

(b)    There shall be deposited in the Costs of Issuance Account from other available moneys of the City such amount sufficient, together with all other moneys deposited therein, to pay all costs of issuance with respect to the Bonds.

Section 503.     Application of Moneys in the Costs of Issuance Account.  Moneys in the Costs of Issuance Account shall be disbursed by the Paying Agent on orders of the printers and others employed to render professional services and other fees, costs and expenses incurred in connection with the issuance of the Bonds and in carrying out the duties, terms and provisions of this Ordinance.  Any surplus remaining in the Costs of Issuance Account on December 1, 2002 shall be transferred to and deposited in the Debt Service Account.

Section 504.     Application of Moneys in the Debt Service Account for the Prior Bonds . Moneys in the Series 1992A Debt Service Account shall be applied solely to the payment of the principal of, redemption premium, if any, and interest on the Series 1992A Bonds in accordance with the provisions of the Series 1992A Ordinance.  Any moneys remaining such account after payment of the Series 1992A Bonds on the Redemption Date shall be transferred to the Director of Finance of the City and shall be deposited in the Debt Service Account.

ARTICLE VI

APPLICATION OF REVENUES

Section 601.     Revenue Fund.  The City covenants and agrees that from and after the delivery of the Bonds, all Revenues derived and collected by the City will be deposited into the Revenue Fund when received.  The Revenues will be segregated from all other moneys, revenues, funds and accounts of the City.  The Revenue Fund will be administered and applied solely for the purposes and in the manner provided in this Ordinance and any Parity Ordinance.

Section 602.     Application of Moneys in Funds and Accounts.

(a)    The City will apply moneys in the Revenue Fund on the dates, in the amounts and in the order as follows:

(1)    on the first day of each month to the Operation and Maintenance Account an amount sufficient to pay the estimated cost of operating and maintaining the System during the month;

(2)    on the 25th day of each month, on a parity basis (i) to the Outstanding Parity Bond Debt Service Account the amount required by each Outstanding Parity Bond Ordinance to be deposited therein prior to the 25th day of the following month, and (ii) to the Debt Service Account the following amounts for credit to the Interest Account and the Principal Account:

(A)    to the Interest Account 1/6 of the amount of interest due on the Bonds on the next Interest Payment Date (or, with respect to the first Interest Payment Date, a pro rata portion of the amount of interest due on the Bonds on such Interest Payment Date); and

(B)    to the Principal Account 1/12 of the principal due on the Bonds on the next succeeding principal payment date, whether at maturity or upon mandatory sinking fund redemption (or, with respect to the first principal payment date, a pro rata portion of the principal due on the Bonds on such principal payment date);

(3)    on the dates required by the SRF Indenture to the Trustee, for deposit to the Administrative Expense Fund, the amount required to pay the Administrative Fee, the City’s Allocable Portion of the Trustee’s Fee and the City’s Allocable Portion of the Master Trustee’s Disclosure Fee (capitalized terms not otherwise defined in this Ordinance, shall have the meaning as set forth in the Series 2002 Bond Ordinance);

(4)    on the first day of each month, to the Outstanding Parity Bond Debt Service Reserve Account as required by each Outstanding Parity Bond Ordinance and to the Debt Service Reserve Account the amount required to first, repay to the issuer of any Debt Service Reserve Account Surety Bond the amount drawn thereon and interest accrued with respect thereto (which, with respect to the initial Debt Service Reserve Account Surety Bond, shall be in accordance with the terms of the Debt Service Reserve Fund Policy Agreement) and second, cause the amount on deposit in the Debt Service Reserve Account to equal the Debt Service Reserve Requirement Series 2002;

(5)    on the first day of each month, to the Depreciation and Replacement Account, (i) the amount required to be deposited pursuant to the Outstanding Parity Bond Ordinance, plus (ii) if the balance in the Depreciation and Replacement Account is less than the Maximum Depreciation and Replacement Account Requirement, 1/12 of the Annual Depreciation and Replacement Account Requirement; and

(6)    on the first day of each month the remaining balance to the Surplus Account.

(b)    If the amount in the Revenue Fund is not sufficient to make the payments at the time required to be made by the City to the Interest Account, the Principal Account and the Outstanding Parity Bond Debt Service Account, the City will apply the remaining balance in the Revenue Fund on a proportionate basis (based upon the outstanding principal amounts of the Bonds and the Outstanding Parity Bonds) to the Principal Account, the Interest Account and the Outstanding Parity Bond Debt Service Account.

(c)    If the amount in the Revenue Fund is not sufficient to make the payments at the time required to be made by the City to the Debt Service Reserve Account and to the Outstanding Parity Bond Debt Service Reserve Account, the City will divide the balance in the Revenue Fund between the Debt Service Reserve Account and the Outstanding Parity Bond Debt Service Reserve Account on a proportionate basis (based upon the outstanding principal amounts of the Bonds and the Outstanding Parity Bonds).

(d)    Except as provided in Section 603, moneys in the Depreciation and Replacement Account will be used by the City for the purpose of making replacements and repairs to the System in order to keep the System in good repair and working order and to assure the continued effective and efficient operation of the System.  This provision will not be construed to modify any more restrictive provision of the Outstanding Parity Bond Ordinance for the use of moneys in the Depreciation and Replacement Account.

(e)    Moneys in the Surplus Account are to be expended for the following purposes as determined by the City:

(1)    paying the cost of the operation, maintenance and repair of the System to the extent necessary after the application of the moneys held in the Operation and Maintenance Account and in the Depreciation and Replacement Account;

(2)    paying the cost of extending, enlarging or improving the System;

(3)    preventing default in, anticipating payments into or increasing the amounts in the accounts confirmed, acknowledged or established in Section 401 and 402, or establishing or increasing the amount of any debt service account or debt service reserve account created by the City for the payment of any System Revenue Bonds subsequently issued;

(4)    redeeming and paying prior to maturity, or, at the option of the City, purchasing in the open market at the best price obtainable not exceeding the call price (if any bonds are callable), the Bonds, the Outstanding Parity Bonds or any other System Revenue Bonds of the City hereafter issued under the conditions hereinafter specified and standing on a parity with the Bonds, including principal, redemption premium, if any, and interest; or

(5)    applying amounts for any other lawful purpose connected with the System as the City may direct from time to time.

(f)    All amounts paid and credited to the Operation and Maintenance Account will be expended solely for the purpose of paying the Current Expenses of the System.

(g)    No moneys derived by the City from the System will be diverted to the general governmental or municipal functions of the City.

Section 603.     Deficiency of Payments into Funds and Accounts.

(a)    If the Revenues are insufficient to make any payment on any date specified in this Article, the City will make good the amount of the deficiency by making additional payments out of the first available Revenues for application in the order specified in Section 602.

(b)    If the moneys in the Outstanding Parity Bond Debt Service Account, the Outstanding Parity Bond Debt Service Reserve Account, the Debt Service Account or the Debt Service Reserve Account are not sufficient to pay the principal of and interest on the Outstanding Parity Bonds and the Bonds as and when the same become due, the City will apply moneys in the Surplus Account and the Depreciation and Replacement Account on a proportionate basis (based upon the outstanding principal amounts of the Bonds and the Outstanding Parity Bonds) to the Debt Service Account and the Outstanding Parity Bond Debt Service Account to prevent any default in the payment of the principal of and interest on the Bonds and the Outstanding Parity Bonds.

Section 604.     Transfer of Funds to Paying Agent.  The Director of Finance is authorized and directed to make the payments to the Debt Service Account as provided in Section 602, and, to the extent necessary to prevent a default in the payment of the Bonds, from the Debt Service Reserve Account, the Surplus Account and the Depreciation and Replacement Account as provided in Sections 602 and 603, sums sufficient to pay the Bonds when due, and to forward amounts to the Paying Agent in a manner which ensures the Paying Agent will have sufficient available funds on or before the second Business Day immediately preceding the dates when payments on the Bonds are due.  Upon the payment of all principal and interest on the Bonds, the Paying Agent will return any excess funds to the City.  Except as otherwise provided in the Indenture, all moneys deposited by the City with the Paying Agent are subject to the provisions of this Ordinance.

Section 605.     Debt Service Reserve Account and Debt Service Reserve Account Surety Bond.   Moneys in the Debt Service Reserve Account  will be disbursed and expended by the City solely for the payment of the principal of, redemption premium, if any, and interest on the Bonds if sufficient moneys are not available in the Bond Fund.  

    Such account is required to be funded on the date of issuance and delivery of the Bonds in an amount equal to the Debt Service Reserve Requirement Series 2002.  The Debt Service Reserve Requirement Series 2002 shall be deemed to be met so long as there is on deposit in the Debt Service Reserve Account either, or any combination of, cash, Permitted Investments or a Debt Service Reserve Account Surety Bond meeting the requirements of this Section. Application has been made to Financial Guaranty Insurance Company to issue the initial Debt Service Reserve Account Surety Bond upon delivery of the Bonds.

    The City or the Paying Agent, as applicable, shall draw upon or make a claim under each Debt Service Reserve Account Surety Bond, in accordance with the terms and conditions thereof, as needed to pay the principal of and interest on the Bonds as and when due if funds are not otherwise available therefor and as required by the provisions set forth below.  Where the Debt Service Reserve Account contains both a Debt Service Reserve Account Surety Bond and cash or Permitted Investments, all cash and Permitted Investments shall be drawn down completely before a demand for payment is made upon the Debt Service Reserve Account Surety Bond.  In the event the Debt Service Reserve Account contains more than one Debt Service Reserve Account Surety Bond, there shall be a pro-rata draw on each of said Debt Service Reserve Account Surety Bonds unless otherwise provided in the Debt Service Reserve Account Surety Bonds.

    Each Debt Service Reserve Account Surety Bond shall be issued by issued by a bank or insurance company, as applicable, with a credit rating in one of the three highest rating categories of Standard & Poor's Rating Service or Moody's Investors Service, provided that the City shall provide to the Paying Agent a written confirmation that the terms of such Debt Service Reserve Account Surety Bond shall not adversely affect the rating of the Bonds.

    The City or the Paying Agent, as applicable, shall make a drawing on each Debt Service Reserve Account Surety Bond (A) whenever moneys are required for the purposes for which moneys in the Debt Service Reserve Account may be applied, and (B) prior to any expiration or termination thereof; provided, that no such drawing need be made if (i) other moneys or Permitted Investments and/or a substitute Debt Service Reserve Account Surety Bond meeting the requirements set forth in this section are available in the Debt Service Reserve Account such that the amount on deposit therein is equal to the Debt Service Reserve Requirement Series 2002, or (ii) moneys are no longer required to be held on deposit in the Debt Service Reserve Account.

ARTICLE VII
DEPOSIT AND INVESTMENT OF MONEYS
Section 701.     Investment of Moneys.

    (a)    Moneys in each of the other funds and accounts created or ratified and confirmed by this Ordinance may be invested by the City in Permitted Investments, but no investment will be made for a period extending longer than the date when the moneys invested may be needed. All earnings on any investments held in any fund or account will accrue to the applicable fund or account.  In determining the amount held in any fund or account under this Ordinance other than the Debt Service Reserve Account, obligations will be valued at the lower of cost or market value.  In determining the amount held in the Debt Service Reserve Account under this Indenture, obligations will be valued at the cost thereof and any Debt Service Reserve Account Surety Bond shall be valued at the maximum amount remaining to be drawn thereunder.  If the amount in any fund or account held within the Treasury of the City is greater than the required amount, the City may transfer the excess to the Revenue Fund.


(b)    If the Outstanding Parity Bonds are outstanding, any investments made pursuant to this Section are subject to the applicable restrictions in the Outstanding Parity Bond Ordinance.


ARTICLE VIII
PARTICULAR COVENANTS OF THE CITY
Section 801.     Efficient and Economical Operation .  The City will continuously own and will operate the System in an efficient and economical manner and will keep and maintain the System in good repair and working order.

Section 802.     Rate Covenant .  The City will fix, establish, maintain and collect rates and charges for the use and services furnished, by or through the System to produce income and revenues sufficient to (a) pay the costs of the operation and maintenance of the System; (b) pay the principal of and interest on the Bonds as and when due; (c) enable the City to have in each Fiscal Year Net Revenues Available for Debt Service of not less than an amount equal to the sum of (i) 110% of the amount required to be paid by the City in the Fiscal Year on account of both principal of and interest on all System Revenue Bonds at the time outstanding and (ii) the amount then owed to the issuer of any Debt Service Reserve Account Surety Bond in connection with any amount drawn thereon, and (d) provide reasonable and adequate reserves for the payment of the Bonds and the interest thereon and for the protection and benefit of the System as provided in this Ordinance.  The City will require the prompt payment of accounts for service rendered by or through the System and will promptly take whatever action is legally permissible to enforce and collect delinquent charges.

Section 803.     Reasonable Charges for all Services .  None of the facilities or services provided by the System will be furnished to any user (excepting the City itself) without a reasonable charge being made therefor.  If the income and revenues derived by the City from the System are insufficient to pay the reasonable expenses of operation and maintenance of the System and the principal of and interest on the Bonds when due, the City will pay into the Revenue Fund a fair and reasonable payment in accordance with effective applicable rates and charges for all services or other facilities furnished to the City or any of its departments by the System.

Section 804.     Annual Budget .  Prior to the commencement of each Fiscal Year, the City will cause a budget setting forth the estimated receipts and expenditures of the System for the next succeeding Fiscal Year to be prepared and filed with the City Clerk. The annual budget will be prepared in accordance with the laws of the State.

Section 805.     Annual Audit .

(a)    Promptly after the end of each Fiscal Year, the City will cause an audit of the System for the preceding Fiscal Year to be made by a certified public accountant or firm of certified public accountants employed for that purpose and paid from the Revenues.  The annual audit will cover in reasonable detail the operation of the System during the Fiscal Year.

(b)    Within 180 days after the end of the City’s Fiscal Year, a copy of the annual audit will be filed in the office of the City Clerk.  The annual audit will be open to examination and inspection during normal business hours by any taxpayer, any user of the services of the System, any Owner of the Bonds, or anyone acting for or on behalf of the taxpayer, user or Owner.

(c)    As soon as possible after the completion of the annual audit, the Governing Body will review the annual, audit, and if the annual audit reveals any breach of this Ordinance, the City agrees to promptly cure the breach.

Section 806.     Performance of Duties.  The City will faithfully and punctually perform all duties and obligations with respect to the operation of the System now or hereafter imposed upon the City by the Constitution and laws of the State, the provisions of the Outstanding Parity Bond Ordinance and the provisions of this Ordinance.

Section 807.     Tax Covenants.

(a)    The City will comply with all applicable provisions of the Code, including Sections 103 and 141 through 150, necessary to maintain the exclusion of interest on the Bonds from gross income for federal income tax purposes.  The City will not use or permit the use of any proceeds of the Bonds or any other funds of the City, nor take or permit any other action, or fail to take any action, which would adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes.  The City will adopt ordinances or resolutions and take other actions necessary to comply with the Code and with other applicable future law, in order to ensure that the interest on the Bonds will remain excluded from federal gross income.

(b)    The City (1) will use the proceeds of the Bonds as soon as practicable for the purposes for which the Bonds are issued, and (2) will not invest or directly or indirectly use or permit the use of any proceeds of the Bonds or any other funds of the City in any manner, or take or omit to take any action, that would cause the Bonds to be “arbitrage bonds” within the meaning of Section 148(a) of the Code.

(c)    The City will not use any portion of the proceeds of the Bonds, including any investment income earned on the proceeds, directly or indirectly, (1) in a manner that would cause any Bond to be a “private activity bond” within the meaning of Section 141(a) of the Code, or (2) to make or finance a loan to any person.

(d)    The City will pay to the Trustee, for deposit to the Rebate Fund, an amount equal to arbitrage rebate and the costs incurred in connection with determining arbitrage rebate, at the times required by the Arbitrage Instructions.  The provisions of this paragraph will survive the payment in full or defeasance of the Bonds.


ARTICLE IX

ADDITIONAL BONDS

Section 901.     Prior Lien Bonds.  The City will not issue any debt obligations payable out of the Net Revenues which are superior in lien, security or otherwise to the Bonds.

Section 902.     Parity Lien Bonds or Obligations.

(a)    The City will not issue any additional bonds or other long-term obligations payable out of the Net Revenues of the System which stand on a parity or equality with the Bonds unless the following conditions are met:

(1)    the City is not in default in the payment of principal or interest on the Bonds or any Parity Bonds or in making any deposit into the funds and accounts under this Ordinance or any Parity Ordinance; and

(2)    the City provides a certificate showing either of the following:

(A)    the average annual Net Revenues as set forth in the two most recent annual audits for Fiscal Years preceding the issuance of additional bonds, are at least equal to the sum of (i) 110% of the average annual debt service on the System Revenue Bonds, including the additional bonds proposed to be issued, to be paid out of the Net Revenues in all succeeding Fiscal Years and (ii) the amount then owed to the issuer of any Debt Service Reserve Account Surety Bond in connection with any amount drawn thereon.  If the City has made any increase in rates for the use and services of the System and the increase has not been in effect during all of the two Fiscal Years for which annual audits are available, the City may add the additional Net Revenues which would have resulted if the rate increase had been in effect for the entire period to the audited Net Revenues, as certified by the Consultant; or

(B)    the estimated average annual Net Revenues Available for Debt Service for the two Fiscal Years immediately following the Fiscal Year in which the improvements to the System being financed by the additional bonds are to be in commercial operation, as certified by the Consultant, is at least equal to the sum of (i) 110% of the average annual debt service on the System Revenue Bonds, including the additional bonds proposed to be issued, to be paid out of the Net Revenues Available for Debt Service in succeeding Fiscal Years following the commencement of commercial operation of the improvements and (ii) the mount then owed to the issuer of any Debt Service Reserve Account Surety Bond in connection with any amount drawn thereon.  In determining the amount of estimated Net Revenues Available for Debt Service for the purpose of this subsection, the Consultant may adjust the estimated net income and revenues by adding the estimated increase in Net Revenues Available for Debt Service resulting from any increase in rates for the use and services of the System approved by the City;

(C)    the City complies with the provisions of any Parity Ordinances relating to the issuance of Parity Bonds; and

(D)    if any amounts are past due and owing to the issuer of any Debt Service Reserve Account Surety Bond with respect to a draw thereon, the issuer of such Debt Service Reserve Account Surety Bonds shall have consented in writing to the issuance of such additional revenue bonds or other obligations on a parity with the Bonds.

(b)    If the conditions set forth in this Section are satisfied, the City (i) may issue additional revenue bonds or other obligations of the City on a parity with the Bonds and that enjoy complete equality of the lien on the Net Revenues with the Bonds, (ii) may make equal provision for paying the additional revenue bonds or other obligations from the Revenue Fund, and (iii) may secure the additional revenue bonds or other obligations by funding reasonable System debt service accounts and debt service reserve accounts from the Net Revenues.

Section 903.     Junior Lien Bonds.  Nothing in this Article prohibits or restricts the right of the City to issue additional revenue obligations, including revenue bonds, for the purpose of extending, improving, enlarging, repairing or altering the System, that are subordinate to the Bonds if at the time of the issuance of the additional revenue obligations the City is not in default in the performance of any covenant or agreement in this Ordinance.  If the City is in default in paying either interest on or principal of the Bonds, or if the Reserve Account is not fully funded, the City shall not make any payments on the subordinate revenue obligations until the default is cured.  Subject to the limitations in this Section, the City may make provision for paying the principal of and interest on the subordinate revenue bonds or obligations from moneys in the Revenue Fund.

Section 904.     Refunding Bonds.  The City may, without complying with the provisions of Section 902, refund any of the Bonds in a manner which provides debt service savings to the City, and the refunding bonds so issued will be on a parity with any of the Bonds that are not refunded and any Parity Bonds.  If any Parity Bonds are outstanding, the issuance of any refunding bonds is subject to the applicable restrictions in the Parity Ordinances.

Section 905.     Notice of Issuance .  The City shall provide the issuer of each Debt Service Reserve Account Surety Bond with written notice of the issuance of any bonds or other obligations on a parity with the Bonds, such notice, in the case of Financial Guaranty Insurance Company, to be sent to 125 Park Avenue, New York, New York, 10017, Attention:  Risk Management, or such other address as shall be specified in writing by Financial Guaranty Insurance Company.

ARTICLE X

DEFAULT AND REMEDIES

Section 1001.     Event of Default.  The City covenants and agrees that if it shall default in the payment of the principal of or interest on any of the Bonds as the same shall become due, and such default shall continue for a period of thirty (30) days, or if the City or its governing body or any of the officers, agents or employees thereof shall fail or refuse to comply with any of the provisions of the Constitution or statutes of the State, or of this Ordinance, at any time thereafter and while such default shall continue, the Owners of 25% in principal amount of the Bonds then Outstanding may, by written notice to the City filed in the office of the City or delivered in person to the Mayor or City Clerk of the City, declare the principal of all Bonds then Outstanding to be due and payable immediately, and upon any such declaration given as aforesaid, all of said Bonds shall become and be immediately due and payable, anything in this Ordinance or in the Bonds contained to the contrary notwithstanding.  This provision, however, is subject to the condition that if at any time after the principal of said Outstanding Bonds shall have been so declared to be due and payable, all arrears of interest upon all of said Bonds, except interest accrued but not yet due on such Bonds, and all arrears of principal upon all of said Bonds shall have been paid in full, and all other defaults, if any, by the City under the provisions of this Ordinance and under the provisions of the statutes of the State shall have been cured, then and in every such case the Owners of 50% in principal amount of the Bonds then Outstanding, by written notice to the City given as hereinbefore specified, may rescind and annul such declaration and its consequences, but no such rescission or annulment shall extend to or affect any subsequent default or impair any rights consequent thereon.

Section 1002.     Remedies.

(a)    The provisions of this Ordinance constitute a contract between the City and the Owners of the Bonds.  The Owner or Owners of not less than 10% in principal amount of the Bonds at the time Outstanding have the right for the equal benefit and protection of all Owners of Bonds similarly situated:

(1)    by any proceeding at law or in equity to enforce the rights of the Owner or Owners against the City and its officers, agents and employees, and to compel the performance by the City of its duties and obligations under this Ordinance, the Constitution and the laws of the State;

(2)    by any proceeding at law or in equity to require the City, its officers, agents and employees to account as if they were the trustees of an express trust; and

(3)    by any proceeding at law or in equity to enjoin any act or thing which is unlawful or in violation of the rights of the Owners of the Bonds.

(b)    Any amounts paid on the Bonds to the Owners will be applied first to interest and second to principal, to the extent due and payable.

Section 1003.     Limitation on Rights of Bondowners.  No Owner has any right in any manner whatever by the Owner’s action to affect, disturb or prejudice the security granted and provided for in, or enforce any right under, this Ordinance, except in the manner provided in this Ordinance.  All proceedings at law or in equity will be for the equal benefit of all Owners.

Section 1004.     Remedies Cumulative.  No remedy conferred upon the Owners is intended to be exclusive of any other remedy.  Each remedy is in addition to every other remedy and may be exercised without exhausting any other remedy conferred under this Ordinance.  No waiver by any Owner of any default or breach of duty or contract of the City under this Ordinance will affect any subsequent default or breach of duty or contract by the City or impair any rights or remedies thereon.  No delay or omission of any Owner to exercise any right or power accruing upon any default will impair any right or power or will be construed to be a waiver of any default.  Every substantive right and every remedy conferred upon the Owners of the Bonds by this Ordinance may be enforced and exercised from time to time and as often as may be expedient.  If any Owner discontinues any proceeding or the decision in the proceeding is against the Owner, the City and the Owners of the Bonds will be restored to their former positions and rights under this Ordinance.

Section 1005.     No Obligation to Levy Taxes.  Nothing in this Ordinance imposes any duty or obligation on the City to levy any taxes either to meet any obligation incurred under this Ordinance or to pay the principal of or interest on the Bonds.

Section 1006.     Provisions for Benefit of Issuer of Debt Service Reserve Account Surety Bonds.   So long as any Debt Service Reserve Account Surety Bond is outstanding and the issuer there has not failed to comply with its payment obligations thereunder, the issuer of each Debt Service Reserve Account Surety Bond shall have the power to exercise any of the remedies available at law or under this Ordinance other than (A) acceleration of the Bonds or (B) remedies which would adversely affect holders of the Bonds in the event that the City fails to reimburse the issuer of the Debt Service Reserve Account Surety Bond for any draws thereon in accordance with any agreements relating thereto, including pursuant to the Debt Service Reserve Fund Policy Agreement.

ARTICLE XI

DEFEASANCE

Section 1101.     Defeasance.  When all of the Bonds shall have been paid and discharged and any amounts owed to any issuer of a Debt Service Reserve Account Surety Bond in connection with a draw thereunder have been paid and discharged, then the requirements contained in this Ordinance, except as otherwise provided in Section 803  hereof, and the pledge of Net Revenues made hereunder and all other rights granted hereby shall terminate.  Bonds shall be deemed to have been paid and discharged within the meaning of this Ordinance if there shall have been deposited with the Paying Agent and Bond Registrar, or other bank located in the State of Missouri and having full trust powers, at or prior to the maturity or redemption date of said Bonds, in trust for and irrevocably appropriated thereto, moneys and/or direct obligations of, or obligations the principal of and interest on which are guaranteed by, the United States of America, or securities which represent an undivided interest in such obligations or securities to the extent that the Treasury of the United States of America is ultimately responsible for payment thereof, which, together with the interest to be earned on any such obligations, will be sufficient for the payment of the principal of said Bonds, the redemption premium thereon, if any, and interest accrued to the date of maturity or redemption, as the case may be, or if default in such payment shall have occurred on such date, then to the date of the tender of such payments, provided always that if any such Bonds shall be redeemed prior to the maturity thereof, the City shall have elected to redeem such Bonds and notice of such redemption shall have been given.  Any moneys and obligations which at any time shall be deposited with the Paying Agent and Bond Registrar or other bank by or on behalf of the City, for the purpose of paying and discharging any of the Bonds, shall be and are hereby assigned, transferred and set over to the Paying Agent and Bond Registrar or other bank in trust for the respective Owners of the Bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof.  All moneys deposited with the Paying Agent and Bond Registrar or other bank shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Ordinance.

ARTICLE XII


AMENDMENTS

Section 1201.     Amendments Not Requiring Consent of Bond Owners.  The City may from time to time, without the consent of or notice to any of the Bond Owners but with notice to and the consent of the issuer of each Debt Service Reserve Account Surety Bond then in effect, amend this Ordinance as shall not be inconsistent with the terms and provisions hereof, for any one or more of the following purposes:

(a)    to cure any ambiguity or formal defect or omission in this Ordinance or to make any other change not prejudicial to the Owners;

(b)    to grant to or confer upon the Paying Agent and Bond Registrar or the Bond Owners any additional rights, remedies, powers or authority that may be lawfully granted to or conferred upon the Bond Owners or the Paying Agent and Bond Registrar or either of them;

(c)    to more precisely identify the System or to substitute or add property thereto or release property therefrom;

(d)    to subject to this Ordinance additional revenues, properties or collateral;

(e)    to issue additional sewerage system revenue bonds as provided in Article IX hereof; or

(f)    to secure a rating from Standard & Poor's Corporation or Moody's Investor Service, Inc., provided such changes will not restrict, limit or reduce the obligation of the Issuer to pay the principal of, premium, if any, or interest on the Bonds as provided herein or otherwise materially adversely affect the Owners of the Bonds under this Ordinance.

Section 1202.     Amendments Requiring Consent of Bond Owners .  The rights and duties of the City and the Bond Owners, and the terms and provisions of the Bonds or of this Ordinance, may be amended or modified at any time in any respect by Ordinance of the City with the written consent of the Owners of not less than two-thirds in principal amount of the Bonds then Outstanding, such consent to be evidenced by an instrument or instruments executed by such Owners and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments shall be filed with the City Clerk of the City, and the prior written consent of the issuer of each Debt Service Reserve Account Surety Bond then in effect, but no such modification or alteration shall:

(a)    extend the maturity of any payment of principal or interest due upon any Bond;

(b)    effect a reduction in the amount which the City is required to pay by way of principal of or interest on any Bond;

(c)    permit the creation of a lien on the Net Revenues of the System prior or equal to the lien of the Bonds or additional bonds hereafter issued on a parity with the Bonds as hereinbefore provided;

(d)    permit preference or priority of any Bonds over any other Bonds; or

(e)    reduce the percentage in principal amount of Bonds required for the written consent to any modification or alteration of the provisions of this Ordinance.

    Any provision of the Bonds or of this Ordinance may, however, be amended or modified by Ordinance duly adopted by the governing body of the City at any time in any respect with the written consent of the Owners of all of the Bonds at the time Outstanding.

    Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the City Clerk of the City a copy of the Ordinance of the City hereinabove provided for, duly certified, as well as proof of consent to such modification by the Owners of not less than two-thirds in principal amount of the Bonds then Outstanding.  It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification.

Section 1203.     Consent of Issuer of Debt Service Reserve Account Surety Bond .  So long as any Debt Service Reserve Account Surety Bond is outstanding and the issuer there has not failed to comply with its payment obligations thereunder, no amendment to this Ordinance shall be effective without the prior written consent of the issuer of each Debt Service Reserve Account Surety Bond.


ARTICLE XIII

[RESERVED]

ARTICLE XIV

MISCELLANEOUS PROVISIONS

Section 1401.     Notices, Consents and Other Instruments by Bondowners.  Any notice, consent, request, direction, approval, objection or other instrument required by this Ordinance to be signed and executed by the Bondowners may be in any number of concurrent writings of similar tenor and may be signed or executed by such Bondowners in person or by agent appointed in writing.  Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the purposes of this Ordinance, and shall be conclusive in favor of the City and the Paying Agent with regard to any action taken, suffered or omitted under any such instrument, namely:

(a)    The fact and date of the execution by any person of any such instrument may be proved by a certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such instrument acknowledged before such officer the execution thereof, or by affidavit of any witness to such execution.

(b)    The fact of ownership of Bonds, the amount or amounts, numbers and other identification of Bonds, and the date of holding the same shall be proved by the registration books of the City maintained by the Paying Agent.

    In determining whether the Owners of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under this Ordinance, Bonds owned by the City shall be disregarded and deemed not to be Outstanding under this Ordinance, except that, in determining whether the Bondowners shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Bondowners know to be so owned shall be so disregarded. Notwithstanding the foregoing, Bonds so owned which have been pledged in good faith shall not be disregarded as aforesaid if the pledgee establishes to the satisfaction of the Bondowners the pledgee’s right so to act with respect to such Bonds and that the pledgee is not the City.

Section 1402.     Severability.  If any section or other part of this Ordinance, whether large or small, shall for any reason be held invalid, the invalidity thereof shall not affect the validity of the other provisions of this Ordinance.

Section 1403.     Governing Law.  This Ordinance shall be governed exclusively by and constructed in accordance with the applicable laws of the State.

Section 1404.     Official Statement.  The use of the Official Statement dated September 5, 2002 (the “Official Statement”), in substantially the form of the Preliminary Official Statement presented to this meeting of the City Council of the City, by the City in connection with the sale of the Bonds is hereby authorized and ratified and the City Council does hereby approve and consent to the preparation and use by the City and the Purchaser of said Official Statement in connection with the sale of the Bonds and the execution thereof by the Mayor, City Manager or Director of Finance of the City on behalf of the City.  The officials of the City have participated in the preparation of such Official Statement and have determined that the Preliminary Official Statement, dated August 29, 2002, was true, correct and complete in all material respects as of the date thereof.  For the purpose of enabling the Purchaser of the Bonds to comply with the requirements of Rule 15c2-12(b)(1) of the Securities and Exchange Commission, the City hereby deems the information contained in such Preliminary Official Statement to be “final” as of its date, except for the omission of such information as is permitted by Rule 15c2-12(b)(1) and the appropriate officials of the City are hereby authorized, if requested, to provide a letter or certification to such effect and to take such further actions or execute such other documents as such officials in their reasonable judgment deem necessary to enable the Purchaser of the Bonds to comply with the requirements of such Rule.

Section 1405.     Continuing Disclosure.  The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Ordinance, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered an event of default hereunder; however, any Bondholder or Beneficial Owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Section. For purposes of this Section, “Beneficial Owner” means any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes.

Section 1406.     Further Authorization.  The Mayor, City Manager, City Clerk and Director of Finance and the other officers of the City are hereby authorized, empowered and directed to do all such acts and things and to execute, acknowledge and deliver all such documents (including, without limiting the generality of the foregoing, the Debt Service Reserve Fund Policy Agreement, any closing certificate, non-arbitrage certificate or tax compliance agreement in connection with the issuance of the Bonds) as may in his or their discretion be deemed necessary or desirable in order to carry out or comply with the terms and provisions of this Ordinance and the Official Statement and to make ministerial alterations, changes or additions in the foregoing agreements, statements, instruments or other documents herein approved, authorized and confirmed which they may approve and the execution or taking of such action shall be taken as conclusive evidence of its necessity or advisability.  All of the acts and undertakings of such officers which are in conformity with the intent and purposes of this Ordinance, whether heretofore or hereafter taken or done shall be and the same are hereby in all respects, ratified, confirmed and approved.  The Board hereby approves the employment by the City of the services of Thompson Coburn LLP, St. Louis, Missouri, as Bond Counsel.  

Section 1407.     Redemption of Prior Bonds.  The officers of the City are hereby authorized to cause the redemption and payment of the Prior Bonds on the earliest possible redemption date therefore.  The Prior Bonds shall be redeemed and paid on November 1, 2002. The Mayor and City Clerk of the City are hereby authorized and directed to call such Prior Bonds for redemption on such dates at a redemption price equal to 102% of the principal amount thereof, plus accrued interest, if any, to the date of redemption.    

Section 1408.     Effective Date.  This Ordinance shall be in full force and effect from and after its passage by the City Council of the City.

    PASSED this 5th day of September, 2002.

EXHIBIT A

FORM OF BOND

Registered    Registered
No. R-__________        $___________

UNITED STATES OF AMERICA
STATE OF MISSOURI
COUNTY OF BOONE

CITY OF COLUMBIA

SEWERAGE SYSTEM REVENUE REFUNDING BOND

SERIES 2002

Interest Rate    Maturity Date    Date of Bonds    CUSIP Number

    ___%    October 1, ___            September 15, 2002    ___________

REGISTERED OWNER:    _____________________________

PRINCIPAL AMOUNT:  __________________________________________ DOLLARS

THE CITY OF COLUMBIA, MISSOURI, a municipal corporation in the County of Boone, State of Missouri (the “City”), acknowledges itself indebted to, and for value received hereby promises to pay to, the Registered Owner shown above, or registered assigns, solely from the sources and in the manner hereinafter described, upon surrender hereof at the principal office of UMB Bank, n.a., St. Louis, Missouri, the Paying Agent (the “Paying Agent”), the Principal Amount specified above on the Maturity Date identified above, unless this Bond is redeemable and has previously been called for redemption and payment of the redemption price made or provided for, together with interest thereon from said sources from the Date of Bonds specified above at the Interest Rate specified above per annum, payable on April 1, 2003, and thereafter semiannually on April 1 and October 1 in each year, until this Bond shall have been fully paid or until provision for the payment of this Bond shall have been made upon redemption or at maturity. Payment of the interest hereon shall be made by check or draft mailed by the Paying Agent on each interest payment date to the person appearing as the registered owner hereof on the registration books of the City held by the Bond Registrar named herein as of the close of business on the fifteenth day of the calendar month next preceding such interest payment date. The Principal Amount and redemption premium, if any, and interest hereon are payable in any coin or currency which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts.

This bond is one of an authorized series of bonds of the City aggregating the principal amount of $7,940,000, and designated “Sewerage System Revenue Refunding Bonds, Series 2002” (herein called the “Bonds”), issued for the purpose of providing funds, together with other funds which are or will become available, to refund the outstanding Sewerage System Revenue Bonds, Series 1992 (the “Series 1992A Bonds”) of the City, which Series 1992A Bonds were issued for the purpose of extending, improving, repairing, replacing and equipping the City-owned sewerage system, and is issued pursuant to the Constitution and laws of the State of Missouri, the City's Charter and an Ordinance of the City enacted September 5, 2002 (the “Ordinance”). Pursuant to the Ordinance, this Bond is payable solely from the Net Revenues (as defined in the Ordinance) of the sewerage system owned exclusively by the City (the “System”). Copies of the Ordinance are on file at the offices of the City and reference to the Ordinance and any and all supplements thereto and modifications and amendments thereof is made for a description of the pledge, security interest and covenants securing the Bonds, the nature, extent and manner of enforcement of such pledge and security interest, the rights and remedies of the registered owners of the Bonds with respect thereto and the terms and conditions upon which the Bonds are issued and may be issued thereunder.

As provided in the Ordinance, bonds or other obligations of the City may be issued from time to time in one or more series, in various principal amounts, which additional obligations may mature at different times, may bear interest at different rates and may otherwise vary. Such bonds or other obligations may be equally secured by the pledge, security interest and covenants made in the Ordinance, except as otherwise expressly provided or permitted in the Ordinance.

The Bonds are issued on a parity with respect to the pledge of the Net Revenues with the City’s Sewerage System Revenue Bonds, Series 1979, of which $815,000 remains outstanding as of the date of issuance of the Bonds, the City’s Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1992B, of which $600,000 remains outstanding as of the date of issuance of the Bonds, the City’s Sewerage System Refunding Revenue Bonds, Series 1992, of which $100,000 remains outstanding as of the date of issuance of the Bonds, the City’s Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1999, of which $3,405,000 remains outstanding as of the date of issuance of the Bonds, the City’s Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1999B, of which $1,300,000 remains outstanding as of the date of issuance of the Bonds, the City’s Sewerage System Revenue Bonds (State Revolving Fund Program) Series 2000B, of which $2,340,000 remains outstanding as of the date of issuance of the Bonds, the City’s Special Obligation Capital Improvement Bonds, Series 2001A, of which $2,685,000 remains outstanding as of the date of issuance of the Bonds, and the City’s Sewerage System Revenue Bonds (State Revolving Fund Program) Series 2002, of which $2,230,000 remains outstanding as of the date of issuance of the Bonds (collectively, the “Outstanding Parity Bonds”).  

This Bond is a special obligation of the City payable solely from the sources described above and does not constitute a general obligation or an indebtedness of the City within the meaning of any constitutional or statutory limitation or provision, and the City does not pledge its full faith and credit and is not obligated to levy taxes or resort to any other moneys of the City, except Net Revenues of the System as provided in the Ordinance, to pay the principal, premium, if any, and interest on the Bonds.

This Bond is transferable, as provided in the Ordinance, only upon the registration books kept by the Bond Registrar upon surrender of this Bond together with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the Registered Owner or his duly authorized agent, and thereupon a new Bond or Bonds in the same aggregate principal amounts shall be issued to the transferee in exchange therefor as provided in the Ordinance, and upon payment of the charges therein prescribed. The City, the Paying Agent and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price hereof and interest due hereon and for all other purposes.

The Bonds are issuable in the form of registered bonds in the denominations of $5,000 or any integral multiple of $5,000. In the manner, subject to the conditions and upon the payment of the charges described in the Ordinance, the owner of any Bond or Bonds may surrender the same (together with a written instrument of transfer satisfactory to the Bond Registrar), in exchange for an equal aggregate principal amount of Bonds of any other authorized denominations.

At the option of the City, the Bonds or portions thereof maturing on October 1, 2013 and thereafter may be called for redemption and payment prior to their stated maturity on October 1, 2012 and thereafter at the direction of the City prior to maturity, upon notice as hereinafter provided, as a whole at any time or in part on any interest payment date in any order of maturity selected by the City and by lot in multiples of $5,000 within a maturity, at the redemption price equal to the principal amount thereof, plus accrued interest thereon to the date of redemption.

If less than all of the Bonds of like maturity are to be redeemed, the particular Bonds to be redeemed shall be selected at random by the Paying Agent as provided in the Ordinance.

Notice of redemption shall be given to the registered owner hereof in the manner and upon the terms and conditions set forth in the Ordinance. If notice of redemption shall have been given as aforesaid, the Bonds or portions thereof specified in said notice shall become due and payable on the redemption date therein fixed, and if, on the redemption date, moneys for the redemption of all the Bonds or portions thereof to be redeemed, together with interest to the redemption date, shall be available for such payment on said date, then, from and after the redemption date interest on such Bonds or portions thereof so called for redemption shall cease to accrue and be payable.

THIS BOND shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Ordinance (as hereinafter defined) until the Certificate of Authentication hereof shall have been dated and executed by the Bond Registrar named herein.

IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all conditions, acts and things required by law and the Ordinance to exist, to have happened and to have been performed precedent to and in the issuance of this Bond, exist, have happened and have been performed and that the Bonds, together with all other indebtedness of the City are within every debt and other limit prescribed by the laws of the State of Missouri.

IN TESTIMONY WHEREOF, the City, acting by and through its City Council, has caused this Bond to be executed by the manual or facsimile signature of the Mayor of the City, under the corporate seal of the City printed or impressed hereon and attested by the manual or facsimile signature of the City Clerk and countersigned by the manual or facsimile signature of the Director of Finance of the City, this Bond to be dated as of the Date of Bonds as shown above.

    CITY OF COLUMBIA, MISSOURI


[SEAL]    By             
        Mayor

ATTEST:

By     
    City Clerk

COUNTERSIGNED:

By     
    Director of Finance

CERTIFICATE OF AUTHENTICATION

This Bond is one of the Bonds described in the within mentioned Ordinance.

Dated:     

    UMB BANK, N.A.,
    Bond Registrar


    By                     
         Authorized Officer

                                                

 [FORM OF ASSIGNMENT AND TRANSFER]

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
                                                
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE
                                                

the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints         
                                    Attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises.

Dated:                         

In the presence of:

                        
                                                 
NOTICE: The signatures to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever.