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HomeMy WebLinkAboutRES NO 196-93(1)RESOLUTION NO. I 9 6 - 9 3 {]') RESOLUTION SUPPLEMENTING AND AMENDING FOR CLARITY RESOLUTION NO. 196-93 TO PROVIDE FOR THE ISSUANCE OF THE CITY OF BAKERSFIELD SEWER REVENUE BONDS, SERIES 1997, ON A PARITY WITH THE SERIES 1994 REVENUE BONDS, IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $25.0 MILLION, AND AUTHORIZING RELATED ACTIONS AND EXECUTION OF RELATED INSTRUMENTS. (Sewer Revenue Bonds, Series 1997) WHEREAS, the City of Bakersfield (the "City") is a charter city organized and existing under the laws of the State of California (the "State"); and WHEREAS, the City now owns and operates a municipal sewer system (the "Enterprise"); and WHEREAS, by Resolution No. 196-93, duly adopted on December 15, 1993 (the "1994 Resolution"), the City Council (the "Council") of the City provided for the issuance of the sewer revenue refunding bonds, which were issued in February 1994 as the City's Sewer Revenue Refunding Bonds, Series 1994 (the "Series 1994 Bonds"), and were sold and delivered to the Bakersfield Public Financing Authority (the "Authority") as part of the set of local obligations purchased by the Authority with proceeds of the Authority's Series 1994A Revenue Bonds; and WHEREAS, the 1994 Resolution provides that the City may, by supplemental resolution, provide for the issuance of Parity Obligations (as said term is defined in the Resolution) from time to time, subject to the specific conditions set forth therein, and may amend the 1994 Resolution, without the consent of any Owner of the Series 1994 Bonds, to the extent permitted by law and for the purpose, among other purposes, of curing any ambiguity or curing, correcting or supplementing any defective provision contained in the 1994 Resolution or resolving questions arising under the 1994 Resolution, as the City may deem necessary or desirable and which shall not adversely affect the interests of the Owners of the 1994 Bonds; and WHEREAS, the City is in receipt of a written opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the City for the Series 1997 Bonds, that the amendments proposed by this resolution are within the scope of amendments permitted by Section 6.01 of the 1994 Resolution without the consent of any Owners of the Bonds; and WHEREAS, the conditions specified by the 1994 Resolution for the issuance of Parity Obligations in the amount proposed for this sewer revenue bond issue (the "Series 1997 Bonds") have been satisfied, and the Council has determined that it is in the interests of the City to issue the Series 1997 Bonds in the principal amount of not to exceed Twenty- Five Million Dollars ($25,000,000) pursuant to the 1994 Resolution, as supplemented by this Supplemental Resolution (collectively, the 1994 Resolution and this Supplemental Resolution are referred to as the "Resolution"), for the purpose of financing a portion of the cost and expense of certain sewer system improvements to the Enterprise (as further defined herein, the "1997 Project"); and WHEREAS, Section 33.3 of the Charter of the City, as implemented by Chapter 3.55 of the Municipal Code of the City, authorizes the City to issue enterprise revenue bonds for such purposes. NOW, THEREFORE, BE IT FOUND, DETERMINED AND RESOLVED by the Council of the City of Bakersfield, as follows: ARTICLE IX AUTHORIZATION OF SERIES 1997 BONDS; DEFINITIONS SECTION 9.01. Authorization of Series 1997 Bonds. The City has reviewed all proceedings heretofore taken and has found, as a result of such review, and hereby finds and determines, that all things, conditions and acts required by law and the 1994 Resolution to exist, happen or be performed precedent to and in connection with the issuance of the Series 1997 Bonds to exist, have happened and have been performed in due time, form and manner as required by law and the 1994 Resolution, and the City is now duly empowered, pursuant to each and every requirement of law and the 1994 Resolution, to issue the Series 1997 Bonds in the manner and form provided in this Supplemental Resolution. SECTION 9.02. Definitions. The terms defined in Section 1.02 of the 1994 Resolution shall for all purposes of this Supplemental Resolution have the meanings specified in the 1994 Resolution, unless otherwise provided in this Section 9.02. (a) The definition of the term "Bonds" is amended to read as follows: "Bonds" means the Series 1994 Bonds, the Series 1997 Bonds and any Parity Obligations heretofore issued; provided that with respect to Sections 2.01, 2.02, 2.03(a) and 3.06 of the 1994 Resolution, "Bonds" means the Series 1994 Bonds. "Series 1994 Bonds" means the City of Bakersfield Sewer Revenue Refunding Bonds, Series 1994. "Series 1997 Bonds' 2 "Maintenance and Operations Costs" means the reasonable and necessary costs and expenses paid or incurred by the City for maintaining and operating the Enterprise, determined in accordance with generally accepted accounting principles, including all reasonable expenses of management, repair and other expenses necessary to maintain and preserve the Enterprise in good repair and working order, and including all administrative costs of the City that are properly charged directly or apportioned to the operation of the Enterprise, such as salaries and wages of employees, overhead, taxes (if any) and insurance premiums, and including all other reasonable and necessary costs and expenses of the City or charges required to be paid by the City to comply with the terms hereof, such as compensation, reimbursement and indemnification of the Fiscal Agent and fees and expenses of Independent Certified Public Accountants and Independent Financial Consultants; but excluding in all cases Annual Debt Service, depreciation, replacement and obsolescence charges or reserves therefore and amortization of intangibles. (g) The following terms used in this Supplemental Resolution shall have the following meanings: "Bond Law" means Chapter 3.55 of the Municipal Code of the City, entitled the "Enterprise Revenue Bond Law." "1997 Project" means the improvements to the Enterprise described in the Preliminary Official Statement respecting the Series 1997 Bonds, dated November 19, 1997, in the section entitled "THE ENTERPRISE AND THE PROJECT - The Project." "1997 Project Fund" means the fund by that name established and held by the Fiscal Agent pursuant to Section 10.07(c). "Rebate Fund" means the fund by that name established and held by the Fiscal Agent pursuant to Section 11.02. "1997 Reserve Fund" means the fund by that name established and held by the Fiscal Agent pursuant to Section 11.01. 4 "1997 Reserve Requirement" means, as of any date of calculation, an amount equal to the lesser of: (i) ten percent (10%) of the original principal amount of the Series 1997 Bonds; (ii) one hundred twenty-five percent (125%) of average annual debt service on the Series 1997 Bonds; and (iii) maximum annual debt service on all Series 1997 Bonds Outstanding. "Supplemental Resolution" means this Supplemental Resolution, specifically authorized by the 1994 Resolution. ARTICLE X THE SERIES 1997 BONDS SECTION 10.01. Authorization and Designation. The Series 1997 Bonds, in the aggregate principal amount not to exceed Twenty-Five Million Dollars ($25,000,000), are hereby authorized to be issued by the City under and subject to the terms of the Resolution and the Bond Law. The Series 1997 Bonds shall be designated the "City of Bakersfield Sewer Revenue Bonds, Series 1997." SECTION 10.02. Terms of Series 1997 Bonds. The Series 1997 Bonds shall be issued in fully registered form without coupons in denominations of Five Thousand Dollars ($5,000) or any integral multiple thereof, numbered consecutively upward in order of issuance. The Series 1997 Bonds shall be initially issued and registered in the name of "Cede & Co.," as nominee of The Depository Trust Company ("DTC"), and shall be evidenced by one Series 1997 Bond maturing on each of the maturity dates specified in the maturity schedule set forth as Appendix A ("Appendix A") to the Purchase Contract (the "Purchase Contract"), dated the date of its execution and to be entered into between the City and George K. Baum & Company (the "Underwriter"), as original purchaser of the Sedes 1997 Bonds, and in a denomination corresponding to the total principal designated in said Appendix A to mature on such date. Registered ownership of the Series 1997 Bonds, or any portion thereof, may not thereafter be transferred except as set forth in Section 10.05 of this Supplemental Resolution. Concurrently with the adoption of this Supplemental Resolution, the Council will adopt its resolution approving the form and substance of various documents pertaining to the issuance, sale and delivery of the Series 1997 Bonds, including the Purchase Contract, and providing for establishment of the maturity schedule, interest rates and redemption provisions prior to execution thereof on behalf of the City. The Series 1997 Bonds shall mature and become payable on the Principal Payment Dates in each of the years and in the amounts as set forth and will be subject to redemption in advance of maturity as set forth in Appendix A when executed on 5 ' behalf of the City. The Series 1997 Bonds shall be dated as provided in the Purchase Contract when executed on behalf of the City, and shall bear interest from said date at the rates shown on said Appendix A. Interest shall be paid on each Interest Payment Date to the Owner in whose name the ownership of the Series 1997 Bonds is registered on the Bond Registration Books at the close of business on the immediately preceding Record Date. Interest shall be paid by check of the Fiscal Agent mailed by first class mail, postage prepaid, on each Interest Payment Date to the Owners of the Series 1997 Bonds at their respective addresses shown on the Bond Registration Books as of the close of business on the preceding Record Date; or by wire transfer made on such Interest Payment Date to any Owner of One Million Dollars ($1,000,000) or more in aggregate principal amount of Series 1997 Bonds who shall have requested such transfer pursuant to written notice filed with the Fiscal Agent, as registrar for the Series 1997 Bonds, received not later than the preceding Record Date. SECTION 10.03. Redemption. (a) Optional Redemption. The Series 1997 Bonds shall be subject to redemption in whole or in part on any date on or after the September 15 to be specified in Appendix A of the Purchase Contract for that purpose, in inverse order of maturity and by lot within a maturity, at the option of the City from any available source of funds, at a redemption price equal to one hundred percant (100%) of the principal amount to be redeerned together with a redemption premium (computed upon the principal amount of the Series 1997 Bonds to be redeemed) to be computed in accordance with a schedule of redemption premiums to be set forth in Appendix A, plus accrued interest to the redemption date; provided that the City and the Underwriter may provide in Appendix A, in lieu of a schedule of redemption premiums, for a specific or set premium for redemption, including a zero premium, and may also provide that the Series 1997 Bonds shall not be subject to optional redemption in advance of maturity. (b) Extraordinary Redemption. The Series 1997 Bonds are also subject to redemption in whole or in part on any date in inverse order of maturity and by lot within a maturity, at the option of the City, without premium, from the net proceeds of insurance or eminent domain available therefor if the City does not apply such net proceeds toward the acquisition or construction of additions, betterments, extensions or improvements to the Enterprise at the principal amount thereof and accrued interest thereon to the date fixed for such extraordinary redemption. (c) Mandatory Sinking Fund Redemption. The Series 1997 Bonds designated as "Term Bonds," if any, in Appendix A are also subject to redemption prior to their respective stated maturity or maturities, as the case may be, in part by lot, from mandatory sinking account payments deposited in the "Mandatory Sinking Account," which the Fiscal Agent shall establish and maintain within the Principal Account in, tb,.e.~ event Term Bonds are specified in Appendix A, on any September 15 as set forth in said Appendix A, at the principal amount thereof and interest accrued thereon to the date fixed for redemption, without premium. Subject to the terms and conditions set forth in this Section, such Series 1997 Bonds shall be redeemed (or paid at maturity, as the case may be) by application of moneys in the Mandatory Sinking Account in the amounts and upon the dates set forth in said Appendix A. In the event that Series 1997 Bonds subject to mandatory sinking fund redemption pursuant to this Section, if any, are redeemed in part prior to their stated maturity date from any moneys other than moneys in the Mandatory Sinking Account, the remaining Mandatory Sinking Account Payments, as set forth in Appendix A, for such Series 1997 Bonds shall be reduced proportionately in each year remaining until and including the final maturity date of such Series 1997 Bonds. SECTION 10.04. Form of Series 1997 Bonds. The Series 1997 Bonds shall be substantially in the form set forth in the Resolution, subject to such revisions, additions and omissions as may be appropriate. Without limiting the generality of the foregoing reservation of entitlement to make revisions to the bond form, the Series 1997 Bonds will be established in a form appropriate for book-entry only systems and for authentication, registration and administration by the Fiscal Agent. SECTION 10.05. Use of Depository. Notwithstanding any provisions of the Resolution or this Supplemental Resolution to the contrary: (a) The Series 1997 Bonds shall be initially issued as provided in Section 10.02 hereof. Registered ownership of such Series 1997 Bonds, or any portions thereof, may not thereafter be transferred except: {i) to any successors of DTC or its nominee, or of any substitute depository designated pursuant to clause (ii) of this subsection (a) ("substitute depository"); provided that such successor of DTC or substitute depository is qualified under any applicable laws to provide the service proposed to be provided by it; (ii) to any substitute depository, upon (1) the resignation of DTC or its successor (or any substitute depository or its successor) from its functions as depository, or (2) a determination by the City that DTC or its successor is no longer able to carry out its functions as depository; provided that any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or (iii) to any person as provided below, upon (1) the resignation of DTC or its successor (or substitute depository or its successor) from its functions as depository, or (2) a determination by the City that DTC or its successor (or substitute depository or its successor) is no longer able to carry out its functions as depository. (b) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection (a) of this Section, upon receipt of all Outstanding Series 1997 Bonds by the City, a single new Series 1997 Bond, which the City shall prepare or cause to be prepared, shall be executed and delivered for each maturity of such Series 1997 Bond then Outstanding, registered in the name of such successor or such substitute depository, or their nominees, as the case may be. In the case of any transfer pursuant to clause (iii) of subsection (a) of this Section, upon receipt of all Outstanding Series 1997 Bonds by the City, new Series 1997 Bonds, which the City shall prepare or cause to be prepared, shall be executed and delivered in such denominations and registered in the names of such persons, subject to the limitations of Section 10.02 hereof. (c) In the case of a partial redemption or an advance refunding of any Series 1997 Bonds evidencing a portion of the principal maturing in a particular year, DTC shall make an appropriate notation on the Series 1997 Bonds indicating the date and amounts of such reduction in principal. The City shall not be liable for DTC's failure to make such notations or DTC's errors in making such notations and the City may rely conclusively on its records as to the registered owners of the Series 1997 Bonds. (d) The City and any Fiscal Agent shall be entitled to treat the person in whose name any Series 1997 Bond is registered as the Owner thereof for all purposes of the Resolution and any applicable laws, notwithstanding any notice to the contrary received by the City; and the City and the Fiscal Agent shall not have responsibility for transmitting payments to, communicating with, notifying, or otherwise dealing with any beneficial owners of the Series 1997 Bonds. Neither the City nor the Fiscal Agent shall have any responsibility or obligations, legal or otherwise, to any such beneficial owners or to any other party, including DTC or its successor (or substitute depository or its successor), except for the Owner of any Series 1997 Bond. {e) So long as all outstanding Series 1997 Bonds are registered in the name of Cede & Co. or its registered assigns, the City and the Fiscal Agent shall cooperate with Cede & Co., as sole registered Series 1997 Bondholder, and its registered assigns in effecting payment of the principal of and redemption premium, if any, and interest on the Series 1997 Bonds by arranging for payment in such manner that funds for such payments are properly identified and are made immediately available on the date they are due. SECTION 10.06. Sale of Bonds. The Finance Director is hereby authorized to negotiate the sale of the Series 1997 Bonds with the Underwriter, in accordance with the terms and conditions of the Purchase Contract; provided that the Purchase Contract may not provide for a principal amount of the Series 1997 Bonds in excess of Twenty-Five Million Dollars ($25,000,000), shall provide that the purchase price for the Series 1997 Bonds (exclusive of any original issue discount, if any) shall be not less than 98.8% of the par amount of the Series 1997 Bonds, and shall provide for an average interest rate (excluding the impact of original issue discount or premium, if any) on the Series 1997 Bonds of not to exceed 6.50% per annum. SECTION 10.07. Application of Proceeds from Sale of Series 1997 Bonds. Upon the receipt of the proceeds from the sale of the Series 1997 Bonds, the Fiscal Agent shall deposit said proceeds as follows: (a) The Fiscal Agent shall deposit in the Interest Account the amount of accrued interest and premium, if any, received upon the sale of the Series 1997 Bonds; {b) The Fiscal Agent shall deposit in the Series 1997 Reserve Account the amount of which equals the 1997 Reserve Requirement, to be calculated in accordance with the definition of the 1997 Reserve Requirement set forth above in this Supplemental Resolution; and (c) The Fiscal Agent shall deposit the remainder of the proceeds into the 1997 Project Fund, which fund is hereby created and shall be maintained by the Fiscal Agent until the completion of the 1997 Project. The moneys in the 1997 Project Fund shall be disbursed by the Fiscal Agent to pay (or to make reimbursements or cash advances to the City or any other state agency, public agency or person, firm or corporation for such costs) for costs of the 1997 Project, including Costs of Issuance relating to the Series 1997 Bonds. Any Series 1997 Bond proceeds remaining in the 1997 Project Fund upon completion of the 1997 Project shall be applied by the Fiscal Agent to the payment of debt service on the Series 1997 Bonds or in such other manner as may be determined by the City; provided that, to the extent that amounts on deposit in the Interest Account or Principal Account or the 1997 Reserve Account are insufficient to pay interest on, principal of or Mandatory Sinking Account payments, if any, with respect to any Series 1997 Bonds when due, on the date such amounts are due, the Fiscal Agent shall transfer moneys on deposit in the 1997 Project fund to such accounts to make such payments. ARTICLE Xl ADDITIONAL COVENANTS OF THE CITY SECTION 11.01. Reserve Account. The City shall cause the Fiscal Agent to establish and hereby covenants to cause the Fiscal Agent to maintain, so long as any of the Series 1997 Bonds are Outstanding, an account separate from any other fund or account established and maintained hereunder designated the "Series 1997 Reserve Account" (the "1997 9 ~. Reserve Account"). The City hereby covenants to cause the Fiscal Agent to maintain in the Reserve Account an amount equal to the 1997 Reserve Requirement. On or before the last Business Day of each February and August, so long as any Series 1997 Bonds are Outstanding, commencing in February 1998, the City shall transfer to the Fiscal Agent for deposit in the 1997 Reserve Account that amount of money which shall be required to maintain the 1997 Reserve Account in the full amount of the 1997 Reserve Requirement. All money in the 1997 Reserve account shall be used and withdrawn by the Fiscal Agent solely for the purpose of replenishing the Interest Account or the Principal Account, in that order, in the event of any deficiency at any time in either of such accounts, but solely for the purpose of paying the interest on or principal of or redemption premiums, if any, on the Series 1997 Bonds or for the retirement of all the Series 1997 Bonds then Outstanding, except that so long as the City is not in default hereunder, any cash amounts in the 1997 Reserve Account in excess of the 1997 Reserve Requirement shall be withdrawn from the 1997 Reserve Account on each September 16, beginning September 16, 1998 and deposited in the 1997 Project Fund during construction of the 1997 Project and, upon completion of the 1997 Project, in the Debt Service Fund. The 1997 Reserve Requirement may be satisfied by crediting to the 1997 Reserve Account moneys, a letter of credit, a reserve fund insurance policy, any other comparable credit facility or any combination thereof, which in the aggregate make funds available to the 1997 Reserve Account in an amount equal to the 1997 Reserve Requirement; provided, however, that such letter of credit, reserve fund insurance policy or other comparable credit facility, must be issued by a financial institution whose long term debt or claims paying ability is rated "A" or better by Moody's and S&P at the time of delivery of such letter of credit, reserve fund insurance policy or other comparable credit facility. Upon the deposit with the Fiscal Agent of such letter of credit, reserve fund insurance policy or other comparable credit facility, the Fiscal Agent shall release moneys then on hand in the 1997 Reserve Account to the City in an amount equal to the face amount of the letter of credit, reserve fund insurance policy or other comparable credit facility. SECTION 11.02. Rebate Fund. The City shall cause the Fiscal Agent to maintain a fund separate from any other fund established and maintained hereunder designated the 'Series 1997 Bonds Rebate Fund" (the "Rebate Fund"). Subject to a tax certificate dated the Closing Date and prepared in connection with the issuance, sale and delivery of the Series 1997 Bonds (the "Tax Certificate"), as such Tax Certificate may be amended and supplemented from time to time, moneys held in the Rebate Fund are hereby pledged to secure payments to the United States of America. The City or the Owners shall have no dghts in or claim to such moneys. The City specifically covenants that the City will comply with such Tax Certificate and will pay or cause to be paid to the United States of America the rebate amounts as such term is used in such Tax Certificate at the times and in the 10 amounts determined therein. The allocation of money in the Revenue Fund, the investments of money in any fund or account, the application of funds upon acceleration and the defeasance of Outstanding Series 1997 Bonds, all amounts required to be deposited into or on deposit in the Rebate Fund shall be governed exclusively by this Section and by the Tax Certificate (which is incorporated herein by reference). Any funds remaining in the Rebate Fund after redemption and payment with respect to all of the Series 1997 Bonds or provision made therefor, including accrued interest and satisfaction of the Rebate Requirement (as defined in the 1997 Tax Certificate), shall be withdrawn by Fiscal Agent and remitted to the City for any lawful purpose. SECTION 11.03. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of that certain continuing disclosure certificate to be entered into in connection with the issuance of the Series 1997 Bonds (the 'Continuing Disclosure Certificate"). Notwithstanding any other provision of the Resolution, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered an Event of Default hereunder; however, the Participating Underwriter (as defined in the Continuing Disclosure Certificate) or the Owners of at least twenty-five percent (25%) aggregate principal amount of Outstanding Series 1997 Bonds, may take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the City to comply with its obligations under this Section. SECTION 11.04. Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any money held by the Fiscal Agent in trust for the payment and discharge of the interest or premium (if any) on or principal of the Series 1997 Bonds which remains unclaimed for two (2) years after the date when the payments of such interest, premium and principal have become payable, if such money was held by the Fiscal Agent at such date, or for two (2) years after the date when the payments of such interest, premium and principal have become payable, if such money was held by the Finance Director (or duly appointed agent hereunder) at such date, or for two (2) years after the date of deposit of such money if deposited with the Fiscal Agent after the date when the interest and premium (if any) on and principal of such Series 1997 Bonds have become payable, shall at the Written Request of the City be repaid by the Fiscal Agent to the City as its absolute property free from trust, and the Fiscal Agent shall thereupon be released and discharged with respect thereto and the Series 1997 Bond Owners shall look only to the City for the payment of the interest and premium (if any) on and principal of such Series 1997 Bonds. The provisions of this Section shall be subject to any contrary provisions of applicable law of the State. 11 ARTICLE Xll AMENDMENT OF 1994 RESOLUTION SECTION 12.01. Amendment of Section 2.11 of the 1994 Resolution. Subparagraph (b) of Section 2.11 of the 1994 Resolution is amended to read as follows: "(b) An Independent Financial Consultant shall prepare and file a Report with the Finance Director demonstrating and stating (1) that, for the most-recently completed Fiscal Year, Net Revenues (as adjusted for such rate increases for the Enterprise as have been adopted and are either in effect or are to become effective not later than the date on which issuance of the Parity Obligations is authorized) are equal to at least one hundred twenty-five percent (125%) of Maximum Annual Debt Service (including estimated Maximum Annual Debt Service for the Parity Obligations)." SECTION 12.02. Amendment of Section 3.02 of the 1994 Resolution. The following sentences are hereby added to the end of Section 3.02 of the 1994 Resolution: "The City may make adjustments from time to time in such charges and may make such classification thereof as it deems necessary, but shall not reduce the charges then in effect unless the revenues generated by such charges will at all times be sufficient to meet the requirements of this Section; provided, that all fees and charges of the City in connection with the Enterprise shall comply with the requirements of Article XlIID, Section 6(b) and 6(c) of the California Constitution to the extent deemed applicable." SECTION 12.03. Amendment of Section 3.04 of the 1994 Resolution. Section 3.04 of the 1994 Resolution is amended to read as follows: "SECTION 3.04. Transfer from Wastewater Treatment Fund: Establishment of Debt Service Fund. There is hereby created a special fund to be known as the City of Bakersfield Sewer Revenue Bond Debt Service Fund (the "Debt Service Fund"), to be held and maintained by the Fiscal 12 Agent. On each March 10 and September 10 while any of the Bonds remain Outstanding, the City shall transfer from the Wastewater Treatment Fund held by the City to the Fiscal Agent for deposit in the Debt Service Fund the Net Revenues; provided, however, that such obligation to transfer Net Revenues shall be limited to an amount of Net Revenues which, when added to other available amounts in the Debt Service Fund, equals the amounts required to be deposited into the Interest Account and the Principal Account pursuant to Section 3.05 and to be deposited in the 1997 Reserve Account pursuant to Section 11.01 ." SECTION 12.04. Amendment of Section 3.05 of the 1994 Resolution. Subparagraphs(a) and (b) of Section 3.05 of the 1994 Resolution are hereby amended to read as follows: "(a) On or before each March 10 preceding a March 15 Interest Payment Date and each September 10 preceding a September 15 Interest Payment Date, beginning March 10, 1998, the Fiscal Agent shall debit the Debt Service Fund and credit the Interest Account with an amount which, when added to any amount already credited to the Interest Account, will be equal to the amount of interest coming due and payable on the Outstanding Bonds on said next succeeding Interest Payment Date. No credit need be made to the Interest Account if the amount contained therein is equal to or greater than the amount of interest coming due on said next succeeding Interest Payment Date. All monies in the Interest Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of paying the interest on the Bonds as it becomes due and payable (including interest on any Bonds purchased or redeemed prior to maturity pursuant to this Resolution)." "(b) On or before each September 10 preceding a September 10 Principal Payment Date, beginning September 10, 1998, the Fiscal Agent shall debit the Principal Account with an amount which, when added to any amount already credited to the Principal Account, will be equal to the principal coming due and payable on the Outstanding Bonds on said Principal Payment Date. All moneys in the Principal Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of paying the principal on the Bonds as it becomes due and payable." 13 SECTION 12.05. Addition of Section 3.07 to the 1994 Resolution. Section 3.07 is hereby added to the 1994 Resolution to read as follows: "SECTION 3.07 Investment of Funds and Accounts. Amounts in all of the funds and accounts established pursuant to the Resolution may be invested by the Fiscal Agent in securities that are permitted investments for City funds under California law, as supplemented by the adopted investment policy of the City, as the same may be amended from time to time. Investment income is to remain in such funds and accounts unless otherwise provided herein." SECTION 12.06. All references to "Paying Agent" in the 1994 Resolution shall be deemed to refer to the "Fiscal Agent," the City having appointed a Fiscal Agent to administer the Bonds and related funds and accounts. ARTICLE XlII MISCELLANEOUS SECTION 13.01. Terms of Series 1997 Bonds Subject to the 1994 Resolution. Except as in this Supplemental Resolution expressly provided, every term and condition contained in the 1994 Resolution shall apply to this Supplemental Resolution and to the Series 1997 Bonds with the same force and effect as if the same were herein set forth at length, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Resolution. This Supplemental Resolution and all the terms and provisions herein contained shall form part of the 1994 Resolution as fully and with the same effect as if all such terms and provisions had been set forth in the 1994 Resolution. The 1994 Resolution is hereby ratified and confirmed and shall continue in full force and effect in accordance with the terms and provisions thereof, as amended and supplemented hereby. SECTION 13.02. Conflict of Terms. If there is any conflict between the terms of this Supplemental Resolution and the terms of the 1994 Resolution, the terms of this Supplemental Resolution shall control. Except as expressly modified by this Supplemental Resolution, however, the terms of the 1994 Resolution shall remain in full force and effect. 14 SECTION 13.03. Effective Date of Supplemental Resolution. Resolution shall take effect immediately upon its adoption. This Supplemental 15 I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the Council of the City of Bakersfield at a regular meeting thereof held on NOV ! 9 1997, by the following vote: AYES: NOES: ABSTAIN: ABSENT: COUNCILMEMBER CARSON, DEMOND, SMITH, MCDERMOTT, ROWLES, SULLIVAN, SALVAGGIO COUNCILMEMBER ~, ['7~x.~ , COUNCILMEMBER F'~. { ,r~--~,~. COUNCILMEMBER CITY CLERK and Ex Officio Clerk of(~he Council of the City of Bakersfield APPROVED NOV 1 9 1997 MAYOR of Bakersfield APPROVED as to form: JUDY K, $KOUSEN City Attorney /JUDY K:)SKOUSEN / CityAtt?'ney JAN:dlr $:~;OUNCIL~RE $ ~EWE RBND.AMD 16