8. POS-Final - Stormwater Advisory Committee

PRELIMINARY OFFICIAL STATEMENT DATED SEPTEMBER 1, 2011.
New Issue
Moody’s Rating: Aa3
In the opinion of Cunningham, Vogel & Rost, P.C., St. Louis, Missouri, Bond Counsel, under
existing law and assuming continued compliance with certain requirements of the Internal Revenue
Code of 1986, as amended, the interest on the Bonds is excludable from gross income for federal and
Missouri income tax purposes, and is not an item of tax preference for purposes of the federal
alternative minimum tax imposed on individuals and corporations. The Bonds have not been
designated as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Internal
Revenue Code of 1986, as amended. See “TAX MATTERS” herein.
$6,000,000*
WENTZVILLE ECONOMIC DEVELOPMENT COUNCIL, INC.
LEASEHOLD REVENUE REFUNDING BONDS, SERIES 2011
(CITY OF WENTZVILLE, MISSOURI, LESSEE)
Dated: Date of Original Issuance
Due: As shown on inside cover page
The Bonds will be issued as fully registered bonds, without coupons, as herein described, and, when issued,
will be registered in the name of Cede & Co., as Bondowner and nominee for The Depository Trust Company
(“DTC”), New York, New York. DTC will act as securities depository for the Bonds. Purchases of the Bonds will
be made in book-entry only form. The Bonds will be issued in the denomination of $5,000 or any integral multiple
thereof. Purchasers will not receive certificates representing their interest in Bonds purchased. See “THE BONDS Book-Entry Only System” herein.
Interest on the Bonds will be payable on January 1, 2012 and semiannually thereafter on July 1 and
January 1. The Bonds are subject to redemption prior to maturity under certain conditions as described more
fully herein under the caption “THE BONDS - Redemption and Acceleration.” So long as DTC or its
nominee, Cede & Co., is the Bondowner, such payments will be made by UMB Bank, N.A., Kansas City,
Missouri, as trustee, paying agent and bond registrar (the “Trustee”) directly to such Bondowner.
Disbursement of such payments to the DTC Participants is the responsibility of DTC. Distribution of such
payments to the Beneficial Owners is the responsibility of the DTC Participants and Indirect Participants, as
more fully described herein.
The Bonds will be limited obligations of the Wentzville Economic Development Council, Inc.,
a nonprofit corporation of the State of Missouri (the “Corporation”), payable solely from the payments
and receipts payable under a Lease Purchase Agreement dated as of July 1, 2005 as amended by a First
Supplemental Lease Purchase Agreement dated as of September 1, 2011 (collectively, the “Lease
Purchase Agreement”) between the Corporation and the City of Wentzville, Missouri (the “City”).
Payments by the City under the Lease Purchase Agreement are subject to annual appropriations
for such purpose. The Bonds shall not constitute an indebtedness within the meaning of any
constitutional or statutory debt limitation or restriction, and neither the full faith and credit nor
the taxing power of the City, the State of Missouri nor any political subdivision of such State is
pledged to the payment of the principal of, premium, if any, or interest on the Bonds. The Bonds
are subject to certain risks as described herein under the caption “RISK FACTORS.”
The Bonds are offered when, as, and if issued and received by the Underwriter, subject to
receipt of an approving opinion of Cunningham, Vogel & Rost, P.C., St. Louis, Missouri, Bond
Counsel. Certain legal matters will be passed upon for the City by its City Attorney, Paul V. Rost,
Esq., Cunningham, Vogel & Rost, P.C., St. Louis, Missouri. It is expected that the Bonds will be
available for delivery at The Depository Trust Company in New York, New York on or about
September 22, 2011.
This Official Statement is dated _______.
* Subject to Change
MATURITY SCHEDULE*
July 1
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
* Subject to Change
Amount
$415,000
385,000
390,000
395,000
395,000
405,000
415,000
425,000
430,000
445,000
455,000
475,000
490,000
480,000
Rate
REGARDING USE OF THIS OFFICIAL STATEMENT
No dealer, broker, salesman, or other person has been authorized by the City, the Financial
Advisor, or the Underwriter to give any information or to make any representations, other than those
contained in this Official Statement, and, if given or made, such other information or representations
must not be relied upon as having been authorized by the City, the Financial Advisor, or the
Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer
to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is
unlawful for such person to make such offer, solicitation, or sale.
The information set forth herein has been furnished by the City and from other sources which
are believed to be reliable, but it is not guaranteed as to accuracy or completeness by, and is not to be
construed as a representation by the Financial Advisor or the Underwriter. This Official Statement is
not to be construed as a contract or agreement between the City or the Underwriter and the purchasers
or owners of any of the Bonds. The information and expressions of opinion contained herein are
subject to change without notice, and neither the delivery of the Official Statement nor any sale made
hereunder shall, under any circumstances, create any implication that there has been no change in the
affairs of the City since the date hereof.
Any statements made in this Official Statement, including the Appendices, involving matters of
opinion or estimates, whether or not so expressly stated, are set forth as such and not as
representations of fact, and no representation is made that any of such estimates will be realized. This
Official Statement contains certain forward-looking statements and information that is based on the
City’s beliefs as well as assumptions made by and information currently available to the City.
Forward-looking statements are identified by terminology such as “may,” “should,” “expects,”
“intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,”
“continues,” or the negative of these terms or other comparable terminology. Such statements are
subject to certain risks, uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated or expected.
The Underwriter has provided the following sentence for inclusion in this Official Statement.
The Underwriter has reviewed the information in the Official Statement in accordance with, and as
part of, its responsibilities to investors under federal securities laws as applied to the facts and
circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness
of that information.
The Bonds have not been recommended by any federal or state securities commission or
regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or
determined the adequacy of this document. Any representation to the contrary is a criminal offense.
Certain persons participating in this offering may engage in transactions that maintain or
otherwise affect the price of the Bonds. Specifically, the Underwriter may overallot in connection
with the offering, and may bid for, and purchase, the Bonds in the open market. The prices and other
terms respecting the offering and sale of the Bonds may be changed from time to time by the
Underwriter after the Bonds are released for sale, and the Bonds may be offered and sold at prices
other than the initial offering prices, including sales to dealers who may sell the Bonds into investment
accounts.
TABLE OF CONTENTS
SUMMARY STATEMENT .................................................................................................... i
THE BONDS ........................................................................................................................... 2
SECURITY AND SOURCES OF REVENUE FOR PAYMENT OF THE BONDS ............. 6
RISK FACTORS AND INVESTMENT CONSIDERATIONS.............................................. 7
THE CITY ............................................................................................................................. 10
THE CITY’S FINANCES ..................................................................................................... 17
SUMMARY OF OPERATIONS ........................................................................................... 19
GENERAL FUND ................................................................................................................. 19
SOURCES OF REVENUE.................................................................................................... 21
THE WATERWORKS SYSTEM ......................................................................................... 26
DEBT OF THE CITY............................................................................................................ 30
THE REFUNDING................................................................................................................ 34
THE LEASED FACILITIES ................................................................................................. 35
LEGAL MATTERS............................................................................................................... 35
TAX MATTERS.................................................................................................................... 35
RATING ................................................................................................................................ 37
FINANCIAL ADVISOR ....................................................................................................... 37
UNDERWRITING ................................................................................................................ 37
LITIGATION......................................................................................................................... 37
CONTINUING DISCLOSURE UNDERTAKING ............................................................... 37
CERTIFICATION OF OFFICIAL STATEMENT................................................................ 39
MISCELLANEOUS .............................................................................................................. 39
APPENDIX A – FINANCIAL STATEMENTS .................................................................A-1
APPENDIX B – DEFINITIONS OF WORDS AND TERMS ............................................ B-1
APPENDIX C – SUMMARY OF LEGAL DOCUMENTS................................................ C-1
WENTZVILLE ECONOMIC DEVELOPMENT COUNCIL, INC.
BOARD OF DIRECTORS
Bob Schmidt, President
Renee Tallon, Vice President
Jill Ruggeri, Treasuer and Assistant Secretary
Bill Kral, Secretary
Tony Noe
Denise Hackman
Rick Stockes
__________________________
CITY OF WENTZVILLE
MAYOR
Paul Lambi
BOARD OF ALDERMEN
Nick Guccione
Cheryl Kross
Chris Gard
Vann Sample
Rick Stokes
Leon Tow
DIRECTOR OF FINANCE
AND ACTING CITY ADMINISTRATOR
ASSISTANT DIRECTOR OF FINANCE
Dennis Walsh
Dana Belaska
__________________________
CITY’S COUNSEL
Paul V. Rost, Esq.
Cunningham, Vogel & Rost, P.C.
St. Louis, Missouri
__________________________
BOND COUNSEL
Cunningham, Vogel & Rost, P.C.
St. Louis, Missouri
__________________________
FINANCIAL ADVISOR
WM Financial Strategies
St. Louis, Missouri
__________________________
SUMMARY STATEMENT
This Summary Statement is expressly qualified by the entire Official Statement, which is
provided for the convenience of potential investors and which should be reviewed in its entirety by
potential investors.
Issuer:
Wentzville Economic Development Council, Missouri.
Issue:
The Bonds consist of $6,000,000* Wentzville, Economic Development
Council, Inc., Leasehold Revenue Refunding Bonds, Series 2011 (City
of Wentzville, Missouri, Lessee) (the “Bonds”).
Dated Date:
The Bonds will be dated as of the date of delivery thereof.
Interest Due:
Interest on the Bonds will be payable semiannually on January 1 and July 1,
beginning on January 1, 2012.
Principal Due:
Principal will be due annually on July 1 in the years and in the amounts
shown on the inside cover page of the Official Statement.
Redemption:
The Bonds maturing on and after July 1, 2017 are subject to optional
redemption on January 1, 2017 and thereafter in whole or in part at any
time in such order of maturity as designated by the City at a price of
100% of the principal amount plus the accrued thereon to the
redemption date.
Security:
The Bonds will be limited obligations of the Wentzville Economic
Development Council, payable solely from the payments and receipts
payable under the Lease Purchase Agreement. The Corporation will
assign to the Trustee as security all of its rights, title and interest in and
to the Lease Purchase Agreement and certain amounts and funds
established by the Indenture relating to such Bonds. The Bonds will also
be secured by a deed of trust on the Leased Facilities, as defined below,
pursuant to a First Deed of Trust and Security Agreement from the
Corporation to the mortgage trustee named therein. See “SECURITY
AND SOURCES OF REVENUE FOR PAYMENT OF THE BONDS”
herein.
Rating:
The Bonds are rated “Aa3” by Moody’s Investors Service.
Purpose:
The Bonds are being issued for the purpose of refunding $5,795,000
principal amount of outstanding Leasehold Revenue Bonds, Series 2005
(the “Refunded Bonds”). The refunding is described in greater detail
herein under the caption “THE REFUNDING.”
Leased Facilities:
The Leased Facilities consists of a 1 acre site owned by the City and a
water tower located thereon and a site encompassing approximately 1
acre and a booster pump located thereon (the “Leased Facilities”). The
water tower and booster pump have a value of $4,459,417 based on the
present insured value.
Fiscal Year:
The City operates on a fiscal year that corresponds to a calendar year
(“Fiscal Year”).
* Subject to Change
i
Trustee/Paying Agent:
UMB Bank, N.A., Kansas City, Missouri.
Delivery:
The Bonds are expected to be delivered on or about September 22,
2011.
Book-Entry Form:
The Bonds will be registered in the name of Cede & Co. as nominee for
the Depository Trust Company (“DTC”), New York, New York. DTC
will act as securities depository for the Bonds.
ii
OFFICIAL STATEMENT
Relating to
$6,000,000*
WENTZVILLE ECONOMIC DEVELOPMENT COUNCIL, INC.
LEASEHOLD REVENUE REFUNDING BONDS, SERIES 2011
(CITY OF WENTZVILLE, MISSOURI, LESSEE)
INTRODUCTION
This Official Statement including the cover page and Appendices hereto, is provided by the
Wentzville Economic Development Council, Inc. (the “Corporation”) and the City of Wentzville,
Missouri (the “City”) to furnish information in connection with the Corporation's issuance of
$6,000,000* principal amount of Leasehold Revenue Refunding Bonds, Series 2011 (City of
Wentzville, Missouri, Lessee) (the “Bonds”).
The Bonds are being issued for the purpose of refunding $5,795,000 principal amount of
outstanding Leasehold Revenue Bonds, Series 2005 (the “Refunded Bonds”). The refunding is
described in greater detail herein under the caption “THE REFUNDING.”
The Refunded Bonds were issued for the purpose of financing a water tower and booster
pump (together, the “Improvements”), and the land on which the Improvements are situated (the
“Project Sites”). The Project Sites and Improvements are collectively referred to herein as the
Leased Facilities. The Corporation will lease the Leased Facilities to the City under the terms of the
Lease Purchase Agreement.
The Bonds will be executed and delivered pursuant to a Indenture of Trust dated as of July 1,
2005 as amended by a Second Supplemental Indenture of Trust dated as of September 1, 2011
(together, the “Indenture”) by and between the Corporation and the Trustee. The obligations of the
Corporation under the Indenture will be additionally secured by a First Deed of Trust and Security
Agreement dated July 1, 2005, amended and supplemented by a First Amendment Deed of Trust
dated as of September 1, 2011 (together, the “Deed of Trust”).
The Bonds will be payable solely from and secured by a pledge of payments and receipts to
be received by the Corporation pursuant to the Lease Purchase Agreement. Such payments and
receipts are intended to be sufficient to pay, when due, the principal of, redemption premium, if any,
and interest on the Bonds. The City is not legally obligated to pay Rentals (as that term is used and
defined in the Indenture) pursuant to the Lease Purchase Agreement for any period longer than one
year. Although the City may pay for the principal of and interest on the Bonds, in any year, with
money from any fund legally available for such purpose, the City intends to pay debt service on the
Bonds from the revenues from the City’s waterworks system.
Brief descriptions of the Bonds, Risk Factors, the Corporation, the City, the Refunding, the
Leased Facilities, the Lease Purchase Agreement, the Indenture, and the Deed of Trust are included
in this Official Statement and the Appendices hereto. Such descriptions and summaries do not
purport to be comprehensive or definitive. All references herein to the Indenture, the Lease Purchase
Agreement, and the Deed of Trust are qualified in their entirety by reference to such documents, and
references herein to the Bonds are qualified in their entirety by reference to the form thereof included
in the Indenture and the information with respect thereto included in the aforementioned documents,
copies of which are available for inspection at the principal corporate trust office of the Trustee.
* Subject to Change
1
THE BONDS
General Description
The Bonds are dated as of the date of original issuance. The Bonds will mature on July 1 in
each of the years and in the amounts shown on the inside cover page of this Official Statement. The
interest on the Bonds will be payable semiannually on January 1 and July 1, beginning on January 1,
2012.
The Bonds will be issued as fully registered certificates, without coupons, and, when issued, will be
registered in the name of Cede & Co., as Bond Owner and nominee for The Depository Trust Company
(“DTC”), New York, New York. DTC will act as securities depository for the Bonds. Purchases of the
Bonds will be made in book-entry only form. The Bonds will be issued in the denomination of $5,000 or
any integral multiple thereof. Purchasers will not receive certificates representing their interests in the
Basic Rent represented by the Bonds. See the caption “THE BONDS - Book-Entry Only System.”
The Principal of the Bonds shall be payable to the registered owners thereof in lawful money
of the United States of America upon presentation and surrender of such Bonds as they respectively
become due at the principal payment office of the Trustee or such other office as the Trustee
designates. The interest on the Bonds shall be payable by check or draft mailed by the Trustee to the
registered owner at the address appearing on the registration books maintained by the Trustee on the
fifteenth day of the calendar month preceding such payment date (the “Record Date”). Upon written
request and at the expense of any Registered Owner of at least $500,000 in principal of the Bonds,
payments of interest on the Bond shall be made by electronic transfer to the bank (which shall be in
the continental United States) for credit to the ABA routing number and the account number at the
location designated to the Trustee by such Registered Owner no later than 15 days prior to Record
Date.
Book-Entry Only System
General. The Bonds are available in book-entry only form. Purchasers of the Bonds will not
receive certificates representing their interests in the Bonds. Ownership interests in the Bonds will
be available to purchasers only through a book-entry system (the “Book-Entry System”) maintained
by DTC.
The following information concerning DTC and DTC’s book-entry system has been obtained
from DTC. The City (referred to in this section as the “Issuer”) takes no responsibility for the
accuracy or completeness thereof and neither the Indirect Participants nor the Beneficial Owners
should rely on the following information with respect to such matters, but should instead confirm the
same with DTC or the Direct Participants, as the case may be. There can be no assurance that DTC
will abide by its procedures or that such procedures will not be changed from time to time.
1.
The Depository Trust Company (“DTC”), New York, New York, will act as
securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered
in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by
an authorized representative of DTC. One fully-registered Bond certificate will be issued for each
maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be
deposited with DTC.
2.
DTC, the world’s largest securities depository, is a limited-purpose trust company
organized under the New York Banking Law, a “banking organization” within the meaning of the
New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within
the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and
provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and
2
municipal debt issues, and money market instruments (from over 100 countries) that DTC’s
participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement
among Direct Participants of sales and other securities transactions in deposited securities, through
electronic computerized book-entry transfers and pledges between Direct Participants’ accounts.
This eliminates the need for physical movement of securities certificates. Direct Participants include
both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust &
Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities
Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing
agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also
available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust
companies, and clearing corporations that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard &
Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities
and Exchange Commission. More information about DTC can be found at www.dtcc.com.
3.
Purchases of Bonds under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of
each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and
Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of
their purchase. Beneficial Owners are, however, expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Bonds, except in the event that use of the book-entry system
for the Bonds is discontinued.
4.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with
DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as
may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their
registration in the name of Cede & Co. or such other DTC nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s
records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited,
which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
5.
Conveyance of notices and other communications by DTC to Direct Participants, by
Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
6.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a
maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each
Direct Participant in such issue to be redeemed.
7.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote
with respect to Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI
Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights
to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
8.
Redemption proceeds, distributions, and dividend payments on the Bonds will be
made to Cede & Co., or such other nominee as may be requested by an authorized representative of
3
DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and
corresponding detail information from the Issuer or the Trustee, on the payment date in accordance
with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in “street name,” and will
be the responsibility of such Participant and not of DTC, the Trustee, or the Issuer, subject to any
statutory or regulatory requirements as may be in effect from time to time. Payment of redemption
proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be
requested by an authorized representative of DTC) is the responsibility of the Issuer or the Trustee,
disbursement of such payments to Direct Participants will be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and
Indirect Participants.
9.
A Beneficial Owner shall give notice to elect to have its Bonds purchased or
tendered, through its Participant, to the Trustee, and shall effect delivery of such Bonds by causing
the Direct Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to the
Trustee. The requirement for physical delivery of Bonds in connection with an optional tender or a
mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred
by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Bonds to
the Trustee’s DTC account.
10.
DTC may discontinue providing its services as depository with respect to the Bonds
at any time by giving reasonable notice to the Issuer or the Trustee. Under such circumstances, in the
event that a successor depository is not obtained, Bond certificates are required to be printed and
delivered.
11.
The Issuer may decide to discontinue use of the system of book-entry-only transfers
through DTC (or a successor securities depository). In that event, Bond certificates will be printed
and delivered to DTC.
12.
The information in this section concerning DTC and DTC’s book-entry system has
been obtained from sources that Issuer believes to be reliable, but the Issuer takes no responsibility
for the accuracy thereof.
Registration, Transfer and Exchange of Bonds Upon Discontinuance of Book-Entry Only
System
The Trustee will keep or cause to be kept at its principal corporate trust office sufficient books
for registration and transfer of the Bonds. The person in whose name any Bond shall be registered on
the Record Date shall be deemed the owner thereof for all purposes, and payment of or on account of
the interest on and principal of such Bond shall be made only to or upon the order in writing of such
Registered Owner.
Any Bond may be transferred upon the books required to be kept pursuant to the provisions of
the Indenture by the person in whose name it is registered, in person or by his duly authorized
attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a duly executed
written instrument of transfer in a form approved by the Trustee. The Trustee shall also require the
payment by the Registered Owner requesting such transfer of any tax or other governmental charge
required to be paid with respect to such transfer.
Bonds may be exchanged at the principal corporate trust office of the Trustee for a like
aggregate principal amount of Bonds of the same maturity, interest rate and tenor. The Trustee shall
require the payment by the Registered Owner requesting such exchange of any tax or other
governmental charge required to be paid with respect to such exchange. No exchange of any Bond
shall be required of the Trustee after such Bond has been called for prepayment.
4
Redemption and Acceleration
Optional Redemption
The Bonds maturing on and after July 1, 2017 are subject to redemption and payment prior to
maturity at the option of the Corporation, upon instructions from the City, on January 1, 2017 and
thereafter in whole or in part as designated by the City, at par together with accrued interest thereon
to the date of redemption.
Extraordinary Optional Redemption
The Bonds shall be subject to redemption and payment prior to the stated maturity thereof in
whole, at the option of the Corporation, upon instructions from the City, on any date at a redemption
price of 100% of the principal amount thereof, plus accrued interest thereon to the redemption date,
upon the occurrence of any of the following conditions or events, provided that all of the Bonds are
redeemed and paid according to their terms:
(1) if title to, or the use for a limited period of, substantially all of the Leased Facilities is
condemned by any authority having the power of eminent domain;
(2) if title to any portion of the Project Sites is found to be deficient or nonexistent to the
extent that the efficient utilization of the Leased Facilities by the City is impaired;
(3) if substantially all of the Improvements are damaged or destroyed by fire or other
casualty; or
(4) if as a result of changes in the Constitution of the State of Missouri, or of legislative or
administrative action by the State of Missouri or any political subdivision thereof, or by
the United States, or by reason of any action instituted in any court, the Lease Purchase
Agreement shall become void or unenforceable, or impossible of performance without
unreasonable delay, or in any other way, by reason of such change of circumstances
unreasonable burdens or excessive liabilities are imposed on the City or the Corporation.
Selection of Bonds to Be Redeemed
Bonds shall be redeemed only in the principal amount of $5,000 or any multiple thereof.
When less than all of the outstanding Bonds are to be redeemed and paid prior to maturity, such
Bonds shall be redeemed in principal amounts and by maturity date as designated by the City. When
Bonds of less than a full maturity are redeemed, Bonds to be redeemed shall be selected by the
Trustee in $5,000 units of face value in such equitable manner as the Trustee may determine.
Notice of Redemption
Notice of the call for any redemption identifying the Bonds, or portions of the Bonds, to be
redeemed shall be given by the Trustee, in the name of the Corporation, to the Bondowners by
mailing a copy of the redemption notice at least 30 days, but not more than 60 days, prior to the date
fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on
the registration books, unless waived by any Bondowner; provided, however, that failure to receive
such notice, or any defect therein, shall not affect the validity of any proceeding for the redemption
of Bonds as to which there was not such failure or defect. Whenever any Bond is called for
redemption and payment as provided in the Indenture, 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
specified in the Indenture.
5
Acceleration
The maturity of the Bonds may be accelerated by the Trustee on any date if an event of
default has occurred and is continuing under the Indenture. See the caption “THE INDENTUREEvents of Default” in APPENDIX C hereto for a description of Events of Default under the
Indenture.
SECURITY AND SOURCES OF REVENUE FOR PAYMENT OF THE BONDS
General
The Bonds will be limited obligations of the Corporation, payable solely from the payments
and receipts payable under the Lease Purchase Agreement. As security for the payment of the
principal of, premium, if any, and interest on the Bonds, the Corporation will assign to the Trustee,
for the equal and proportionate benefit and security of all present and future holders of the Bonds, all
of its right, title and interest in and to the Lease Purchase Agreement (except its rights to
indemnification and to receive moneys for its own account) and certain amounts and funds, including
investments and proceeds thereof, established by the Indenture relating to such Bonds. The Bonds
will also be secured by a deed of trust on the Leased Facilities pursuant to the Deed of Trust from the
Corporation to the mortgage trustee named therein. See the caption “THE LEASED FACILITIES.”
The amounts payable under the Lease Purchase Agreement are intended to be sufficient to
provide money on deposit in the Series 2011 Bond Fund, to be created by the Indenture, on the
fifteenth day of the month preceding each Payment Date, to pay the total amount of interest and
principal (whether at maturity, acceleration, or by redemption as provided in the Indenture) and
premium, if any, on the Bonds as the same become due, unless funds sufficient to redeem all the
Bonds have been deposited with the Trustee.
Payments made by the City under the Lease Purchase Agreement are payable solely from
amounts which may, but are not required to, be appropriated annually by the City. The City is not
legally obligated to budget or appropriate moneys for any fiscal year beyond the current fiscal year
or any subsequent fiscal year in which the Lease Purchase Agreement is in effect, and there can be
no assurance that the City will appropriate funds or renew the Lease Purchase Agreement after the
initial Term or any renewal Term.
In the Lease Purchase Agreement, the Board of Aldermen directs the City Administrator or
any other officer of the City at any time charged with the responsibility of formulating budget
proposals, from and after delivery of the Bonds and so long as any of the Bonds are outstanding, to
include in each annual budget prepared and presented to the Board of Aldermen as provided in the
Indenture an appropriation of the amount necessary to make Rental payments that equal the debt
service on the Bonds.
THE BONDS WILL STATE THAT THE PRINCIPAL OF, PREMIUM, IF ANY, AND THE
INTEREST ON THE BONDS ARE LIMITED OBLIGATIONS OF THE CORPORATION.
NEITHER THE STATE OF MISSOURI, ST. CHARLES COUNTY, THE CITY, NOR THE
CORPORATION SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY,
OR INTEREST ON THE BONDS OR OTHER COSTS INCIDENT THERETO EXCEPT FROM
THE PAYMENT AND RECEIPTS PLEDGED BY THE CORPORATION THEREFOR. THE
BONDS SHALL NOT CONSTITUTE AN INDEBTEDNESS WITHIN THE MEANING OF ANY
CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION, AND
NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, ST.
CHARLES COUNTY OR THE STATE OF MISSOURI IS PLEDGED TO THE PAYMENT OF
THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS, OR OTHER
COSTS INCIDENTAL THERETO. THE OBLIGATIONS OF THE CORPORATION UNDER THE
BONDS AND THE INDENTURE ARE LIMITED SOLELY TO THE MONEYS MADE
6
AVAILABLE TO THE CORPORATION FROM THE LEASED FACILITIES, INCLUDING THE
PROCEEDS OF THE BONDS AND THE PAYMENTS AND RECEIPTS RECEIVED BY THE
CORPORATION UNDER THE LEASE PURCHASE AGREEMENT RELATING TO THE
BONDS. NEITHER THE DIRECTORS, OFFICERS OR EMPLOYEES OF THE CORPORATION
NOR ANY PERSON EXECUTING THE BONDS SHALL BE LIABLE PERSONALLY
THEREON BY REASON OF THE ISSUANCE THEREOF. THE CORPORATION HAS NO
TAXING POWER.
Reserve Account
The Indenture requires the establishment of the Series 2011 Debt Service Reserve Fund (the
“Reserve Fund”) in an amount equal to the least of (i) 10% of the principal amount of the Bonds, (ii)
125% of the average annual debt service becoming due on the Bonds, or (iii) the maximum annual
debt service becoming due on the Bonds.
Sources of Payment
Although the City may pay for the principal of and interest on the Bonds, in any year, with
money from any fund legally available for such purpose, the City intends to annually appropriate and
pay for the Bonds from revenue from the City’s waterworks system and, to the extent required, from
the City’s Capital Improvements Sales Tax, the general fund or any other funds legally available for
such purpose.
RISK FACTORS AND INVESTMENT CONSIDERATIONS
General
The payment of the Bonds is subject to certain investment risks. The following discussion of
risk factors is not, and is not intended to be, comprehensive or exhaustive, but should be considered
prior to purchasing the Bonds.
Termination of the Lease Purchase Agreement
The Bonds are payable from Rental payments that are subject to annual appropriation. The
City is not obligated to make payments under the Lease Purchase Agreement in any Fiscal Year for
which the Board of Aldermen has not appropriated such payments. Neither the payments under the
Lease Purchase Agreement nor any payments on the Bonds constitute a general obligation or other
indebtedness of the City or a mandatory payment obligation of the City.
The obligations of the City under the Lease Purchase Agreement are limited to those funds
which have been specifically budgeted and appropriated annually by the Board of Aldermen for such
purpose. The Bonds are payable solely from Rentals (as that term is used and defined in the
Indenture) during the term of the Lease Purchase Agreement (except to the extent payable from the
proceeds of the Bonds and income from the investment thereof, the Net Proceeds of certain insurance
policies, condemnation awards, or proceeds from the liquidation of the Trustee's leasehold interest in
the Leased Facilities). The City’s obligations under the Lease Purchase Agreement may be
terminated on an annual basis by the City without any penalty, and there is no assurance that the City
will continue to make payments under the Lease Purchase Agreement beyond any current Fiscal
Year.
Accordingly, the likelihood that there will be sufficient funds during the life of the Bonds to
pay the debt service on the Bonds is dependent upon certain factors that are beyond the control of the
Bond Owners, including (i) the continuing need of the City for property and improvements such as
the Leased Facilities, (2) the economic demographic conditions within the City, (3) the ability of the
City to generate sufficient funds to pay other expenses and obligations of the City, and (4) the value
7
of the Trustee's leasehold interest in the Leased Facilities in a liquidation proceeding or reletting of
the Leased Facilities instituted by the Trustee in the event of a termination of the Lease Purchase
Agreement.
Results of Nonappropriation
In the event that the City does not budget and appropriate, specifically with respect to the
Lease Purchase Agreement, moneys sufficient to pay all Rentals and all other amounts due under the
Lease Purchase Agreement coming due each year during the term of the Lease Purchase Agreement
and any renewals thereof, the Lease Purchase Agreement will be deemed to be terminated. The Lease
Purchase Agreement is also subject to termination by the Trustee if any Event of Default has
occurred and is continuing. For a discussion of the results of a termination, see “APPENDIX C –
SUMMARY OF THE DOCUMENTS.”
Upon a termination of the Lease Purchase Agreement by the City or by reason of an Event of
Default, the City may be required to surrender possession of the Leased Facilities after notice from
the Trustee. Thereafter, the Trustee may enforce its interest in the Leased Facilities by either selling
or reletting its interest.
Effects of Termination of the Lease Purchase Agreement on the Bonds
BOND COUNSEL HAS RENDERED NO OPINION AS TO THE TREATMENT FOR
FEDERAL AND MISSOURI INCOME TAX PURPOSES OF ANY MONEYS RECEIVED BY AN
OWNER OF THE BONDS SUBSEQUENT TO TERMINATION OF THE LEASE PURCHASE
AGREEMENT BY REASON OF NONAPPROPRIATION OR AN EVENT OF DEFAULT.
THERE IS NO ASSURANCE THAT ANY MONEYS RECEIVED BY THE OWNERS OF THE
BONDS SUBSEQUENT TO SUCH TERMINATION WILL BE EXCLUDABLE FROM
FEDERAL INCOME TAXATION.
Bond Counsel has rendered no opinion with respect to the applicability or inapplicability of
the registration requirements of the Securities Act of 1933, as amended, to any Bond subsequent to
termination of the Term of the Lease Purchase Agreement by reason of an Event of
Nonappropriation or an Event of Default. If the Original Term or any Renewal Term is terminated by
reason of such events, there is no assurance that the Bonds may be transferred by an Owner thereof
without compliance with the registration provisions of the Securities Act of 1933, as amended or the
availability of an exemption therefrom.
Taxability
In the event of a determination by the Internal Revenue Service or a court of competent
jurisdiction that the interest or principal paid or to be paid on any Bond is or was includible in the
gross income of the Bond Owner for federal income tax purposes, the Bonds are not subject to
prepayment nor is the interest rate on the Bonds subject to adjustment. Under such circumstances,
Bond Owners would continue to hold their Bonds, receiving the interest principal and interest as and
when due, but would be required to include the interest principal in gross income for federal and
Missouri income tax purposes.
8
Secondary Markets and Prices
The Bonds may not be readily liquid, and no person should invest in the Bonds with funds
such person may need to convert readily into cash. Owners of the Bonds should be prepared to hold
their Bonds to the stated maturity date. The Underwriter will not be obligated to repurchase any of
the Bonds, and no representation is made concerning the existence of any secondary market for the
Bonds. No assurance can be given that any secondary market will develop following the completion
of the offering of the Bonds and no assurance can be given that the initial offering price for the
Bonds will continue for any period of time.
Special Use Facility
There can be no assurance, upon the occurrence of an Event of Default, that the proceeds from
the sale or disposition of the Leased Facilities will be sufficient to pay the principal and interest on
the Bonds upon the exercise of such remedy by the Trustee due to the specialized nature of the
Leased Facilities.
Enforceability
The remedies available upon an Event of Default under the Indenture will, in many respects,
be dependent upon judicial decisions which are subject to discretion and delay. Upon the occurrence
of an Act of Bankruptcy, under existing constitutional and statutory law and judicial decisions,
including specifically, Title 11 of the United States Code, the remedies specified by the federal
bankruptcy code or in the Indenture may not be readily available or may be limited. The various
legal opinions to be delivered with the Bonds will be qualified as to the enforceability of the various
legal instruments by reference to limitations imposed by bankruptcy, reorganization, insolvency or
other similar laws affecting the rights of creditors generally.
Further, no assurance can be given that (1) a court, in the exercise of judicial discretion, would
enforce these remedies in a timely manner, or (2) any money realized by the Trustee upon an
exercise of any remedies would be sufficient to pay in full the principal and interest with respect to
the Bonds. If such money is insufficient to pay all outstanding Bonds in full, the Bonds would be
paid in part on a pro rata basis. Any delays in the ability of the Trustee to obtain possession of the
Leased Facilities will, of necessity, result in delays in any payment of principal and interest on the
Bonds.
Condemnation of the Leased Facilities
Under applicable Missouri law, the City has the power to condemn property for any purpose
for which it is authorized to acquire property. There is no assurance that if the City were to condemn
the Trustee’s interest under the Lease Purchase Agreement that the condemnation award would be
sufficient to pay the outstanding principal of the Bonds and interest thereon. The City has agreed in
the Lease Purchase Agreement that, in the event that the whole or any part of the Leased Facilities is
taken by eminent domain proceedings, the interest of the Trustee shall be recognized. Under the
Lease Purchase Agreement, the City and the Trustee have reached an agreement on the terms of the
acquisition of the Leased Facilities at the City’s option, and to the use of the Leased Facilities. The
City has agreed that any acquisition of the Leased Facilities or rights to its use by the City whether
pursuant to the exercise of eminent domain powers or otherwise shall be pursuant to and in
accordance with the Lease Purchase Agreement, including payment of final Rentals and Additional
Rentals (as that term is used and defined in the Indenture).
9
THE CITY
General
The City is located in east central Missouri approximately 35 miles west of the City of St.
Louis. The City covers approximately 10 square miles in St. Charles County. The City lies within a
Metropolitan Statistical Area (“MSA”) which, at the time of the 2010 census, was comprised of the
City of St. Louis, St. Louis County and St. Charles County, and parts of the counties of Washington,
Franklin, Jefferson, Warren and Lincoln in Missouri, and parts of the counties of Jersey, Bond,
Calhoun, Macoupin, Madison, St. Clair, Clinton, and Monroe in Illinois.
Incorporated in 1892, the City’s principal industry was tobacco growing and production. For
several decades, the City sustained a slow but steady growth, primarily in the small service,
professional and retail sectors. In the early 1980s General Motors began construction of a $600
million auto assembly plant. As a result of the construction of the assembly plant, growth in St.
Charles County, and the City’s convenient location to two major interstate highways, a number of
other manufacturing, retail and service businesses began operations in the City. Today, the City’s
economy continues to diversify with over 290 business establishments including approximately 30
industrial concerns and several commercial corridors.
Since 1960, the City has experienced sustained growth. According to the Bureau of Census
the City’s 2010 population was 29,070 compared to 6,896 in 2000.
Government
The City is a fourth class city governed under a Mayor/Board of Aldermen form of
government. The legislative body of the City is the Board of Aldermen which is comprised of six
aldermen and a mayor. Two aldermen are elected from each of the City’s three wards to serve twoyear terms, one half of which expire annually.
The Mayor, elected at large to serve a two-year term, is the presiding officer of the Board of
Aldermen. The Mayor may vote in the event of a tie vote by the Board of Aldermen. Additionally,
the Mayor has veto power.
The City Administrator is appointed by the Mayor with the advice and consent of the Board
of Aldermen. The City Administrator is the chief assistant to the Mayor and is responsible for the
day-to-to day management of the City’s government business and staff. The City Administrator is
also responsible for the hiring of non-elected City officials under policies established by the Board of
Aldermen.
City functions are divided among 5 departments which are parks, public works, community
development, administration and police. Within the public works department are the following five
divisions: streets, water, wastewater, engineering, and maintenance, and within the administration
department are the following three divisions: finance, administration, and human resources. Within
community development are three divisions: building, planning and zoning, and business
development.
The City has several advisory boards and committees composed of citizens appointed by the
Board of Aldermen. The advisory boards are the Planning and Zoning Commission, the Board of
Adjustment, Economic Development Advisory Board, and the Park Board.
10
Employees
The City has approximately 179 full-time, 35 part-time and 73 seasonal employees. Thirtyeight employees of the City are members of the International Union of Operating Engineers Local
#148 (“Local#148”). The contract with Local #148 was approved on February 24, 2010.
Pension Plan
The City participates in the Missouri Local Government Employees Retirement System
(“LAGERS”) which is administered by a seven-member independent board of trustees pursuant to
Missouri statutes. The plan is a defined benefit plan which provides for normal, early and disability
retirement benefits to participants meeting certain eligibility requirements. The plan covers
substantially all full-time employees of the City.
The City has a legal obligation to make all required contributions to the plan. Total pension
expense for the fiscal year ended December 31, 2010 was $726,782, which included amortization of
prior service cost over a period of forty years. LAGERS requires that pension costs be funded as
accrued.
Additional information regarding the pension plan and funding status for the 2010 Fiscal Year
is included in Note I to the financial statements included as APPENDIX A to this Official Statement.
Community Services
Utilities
Natural gas service is provided by Ameren Missouri (formerly Ameren UE) and Laclede Gas
Company. Electric service is provided by Ameren Missouri and Cuivre River Cooperative. The City
owns and operates a waterworks system and a sewerage system.
The City’s wastewater treatment facilities include a collection system, 33 wastewater lift
stations and a wastewater treatment plant. The wastewater collection system consists of
approximately 224.6 miles of gravity mains, 33.7 miles of force mains and 53.7 miles of dedicated
storm sewer mains.
The wastewater treatment plant was built in 1978. In 1981 additional facilities were
constructed to address treatment needed in connection with the GM Wentzville Assembly Plant. In
1999 and 2007 the City completed major expansions of its treatment facilities to address the needs of
its growing population. The wastewater treatment plant presently has a design capacity to treat an
average flow of 4.1 million gallons of wastewater per day, or a population equivalent of 39,000 and a
corresponding peak flow of 9.2 million gallons of wastewater per day. The City’s current daily
average flow is 2.81 million gallons and maximum daily flow is 6.1 million gallons.
Communications and Media
Telecommunication services are provided by Century Tel (formerly GTE Telephone
Company). There are three radio stations in St. Charles County. Residents of the City also receive all
St. Louis radio stations and television channels. There are three newspapers circulated in the City;
The Wentzville Journal, The St. Charles Post-Dispatch (in conjunction with the St. Louis PostDispatch) and a weekly local newspaper. Cable television is provided by Charter Communication.
11
The St. Charles City-County Library District, a special service district governed by a Board
of Trustees and operated with a separate tax levy, has library facilities located throughout St. Charles
County including a branch in Wentzville which was built in 1984. The Wentzville branch has over
60,000 volumes, 1,500 audio books, over 250 magazines, and newspapers, government documents,
and videocassettes.
Solid Waste Collection
The State of Missouri Solid Waste Management Law requires cities with a population over
500 to develop, adopt and implement a solid waste management plan to ensure that all solid wastes
in a community are stored, collected, transported and disposed of properly. The City contracts with a
private hauler to provide solid waste collection.
Fire Protection
Fire protection is provided by the Wentzville Fire Protection District. The Wentzville Fire
Protection District is independent of the City, having its own officials, budgets, and powers of
taxation. The Wentzville Fire Protection District has approximately 32 volunteer and 35 paid firefighters. Currently the Wentzville Fire Protection District operates 4 fire stations year round and
operates 1 fire station seasonally.
Police Protection
The Police Department of the City of Wentzville provides police protection throughout the
corporate limits of the City. Services are provided by 56 full-time officers, as well as 5 reserve
officers. The Police Department sponsors several community service programs including the
D.A.R.E. drug program, Neighborhood Watch, and other programs designed to reduce crime.
Recreation and Cultural Activities
The City operates 6 parks covering 96 acres, a recreation center and approximately 197 acres
of undeveloped land for future parks. Fireman’s Park includes two lighted tennis courts, a baseball
field, and a picnic pavilion. Memorial Park has two basketball courts, a ballfield, a playground and a
pavilion. Progress Park’s facilities include an Olympic size outdoor swimming pool, a ballfield, and
a recreation center with an indoor running track, a fitness weight room, a gymnasium, and a
reception hall capable of holding 350 people. Rotary Park is the site of the annual St. Charles County
Fair and Greater St. Louis Renaissance Fair. This 72-acre park includes a lake, fairground facilities,
two pavilions, an exhibit hall, sand volleyball courts and horseshoe pits. An amphitheater for outdoor
concerts is also located at Rotary Park. Bi-Centennial Park and Green Lantern Park are neighborhood
parks. Green Lantern Park has a full playground and a senior citizens center.
The City is currently in the process of making improvements to the Peruque Valley Park and
the Heartland Park, and is constructing an aquatic center to be known as the Splash Station Aquatic
Park.
Improvements to the Peruque Valley Park will consist of the construction of a park entry and
drive, four ball fields with a shelter, a bridge over the central water feature, an environmental
meadow, utilities, restrooms and concessions, as well as construction of a trail with a paved
perimeter loop trail on the south side of Peruque Creek, initial development of a central bio-detention
lake site, and three single-table shelters.
Improvements to the Heartland Park will consist of placing entry signage and landscape,
development of additional parking, constructing improvements to the western two fields and water
service for irrigation, construction of an internal park loop trial as well as general landscaping, an
aquatic feature, pier and shelter on the water, a boardwalk on the aquatic feature, riparian landscape
and wildlife enhancement at the aquatic feature.
12
Splash Station Aquatic Park will consist of a leisure pool, water slide, water play features, a
concession stand and a competition pool.
The Park Board (the “Board”) and the City’s Parks and Recreation Department (the “Park
Department”) manage the City’s recreation facilities. The Board is comprised of 9 members who
serve 5 year staggered terms. Board members are selected by the Mayor with the approval of the
Board of Aldermen. The Director of the Park Department, who is appointed by the Board of
Aldermen, is responsible for the day to day management of the Park Department. Operations of the
Park Department are financed by a tax levy, fees charged for various programs offered by the Park
Department and general City revenues.
Near the City’s boundaries is the August A. Busch Memorial Conservation Area which is a
16,918 acre area that includes Weldon Spring, Howell Island and Busch Wildlife Areas. Facilities
are available for fishing at the area’s 32 lakes, and for hunting, hiking, and picnicking.
Approximately 15 miles from the City is a casino development, along the riverfront of the Missouri
river in St. Charles, that includes a 292 foot long and 74 foot wide riverboat and a three story
dockside facility that includes food and entertainment facilities.
Medical
The City is a home for health services. Medical facilities include SSM St. Joseph Health
Center-Wentzville, Wentzville Urgent Care, Missouri Cancer Care, P.C. and the Crider Center for
Mental Health Services, Inc., the headquarters for community mental health for individuals in
Franklin, Lincoln, Warren and St. Charles Counties.
SSM St. Joseph Health Center-Wentzville, is a 74-bed facility that currently offers 24-hour
emergency care and ambulatory services, as well as convenient access to outpatient programs,
including diagnostic services such as radiology (MRI, CT and mammography), laboratory,
cardiology, pulmonary and rehab services. Also offered is an outpatient chemical dependent
program.
Education
Primary and secondary education in the City is provided by the Wentzville R-IV School
District (the “District”) and, in a very small portion of the City, by the Fort Zumwalt School District.
The District owns and operates 8 elementary schools, 3 middle schools and 2 senior high schools.
Enrollment in the District for the 2009-2010 school year was 12,121.
Higher education is provided by St. Charles Community College, located approximately 15
miles east of the City, by Lindenwood University located in St. Charles 20 miles east of the City and
by the numerous institutions of higher education located in the St. Louis metropolitan area including
Saint Louis University, Washington University and the University of Missouri-St. Louis.
Lindenwood University also offers classes in the City at the Southern Aire Building.
St. Charles Community College is one of only two public institutions of higher education to
be established in Missouri since 1968. The Community College was established following an
election on April 1, 1986. The Community College provides a combination of two year vocational
programs appropriate to the needs of County business and industry, the first two years of basic
college courses, and adult education programs which allow County residents to improve job skills
and which retrain displaced workers and homemakers.
Lindenwood University is a private four-year liberal arts institution. Lindenwood offers
Baccalaureate Degrees in 19 subject areas including natural science and physics, social science,
humanities, business administration, education, and Graduate Degrees in business, administration,
13
and education. Continuing adult education at Lindenwood includes not-for-credit courses, workshops
and seminars.
Economic and Demographic Data
Transportation
The City is traversed by two major highways: Interstate 70 and Interstate 64. Both Interstate
64 and 70 provide direct access to the City of St. Louis, approximately 35 miles east of the City.
Regularly scheduled air passenger and freight service is available at Lambert St. Louis
International Airport located approximately 25 miles east of the City on Interstate 70. Rail service is
provided by the Norfolk & Southern and 8 motor freight carriers serve the City.
Population
The following table sets forth population statistics for the City:
Population
3,223
3,193
4,640
6,896
29,070
Year
1970
1980
1990
2000
2010
__________
Source: Official estimates of the United States Department of Commerce, Bureau of Census.
The median age of the population in 2010 was 30.9 years compared to 37.9 years for
Missouri. Approximately one-third of the population was under the age of 20 years.
Economy
The City has a diverse economic base represented by a mixture of industrial enterprises,
commercial enterprises, support services and medical facilities. Three Fortune 500 companies are
located in the City: General Motors, PPG Industries, and Century Tel.
There are several retail areas located throughout the City including big box retailers, several
strip shopping centers and numerous shops in the City’s quaint central business district.
As noted hereinbefore, the City is also a home for health services.
Major Employers
The City’s economy has been diversifying from an agriculturally oriented community to a
commercial/industrial area. Commercial growth is attributable to its transportation network, central
location in the United States, and expanding resources of labor and materials. Residential growth has
been considerable as an outgrowth of expanded employment opportunities in the area.
14
The following table sets forth information regarding the largest employers located within the
City:
Name
Wentzville R-IV School District
General Motors Corp.
RK Stratman Company Inc.
SSM St. Joseph Health Center
Crider Center for Mental Health
City of Wentzville
Rapid Response, Inc.
Parklane Care and Rehabilitation
Lear Corporation
Adrian Equipment
Ameren
____________
Product of Service
Education
Auto Manufacturer
Silk Screening
Medical Care
Medical Care
Government
Cargo Shipping
Medical Care
Auto Seats
Fabricated Wire Products
Utilities
Number of
Employees
1,678(1)
1,529
265
240
225
203
160
102
85
79
70
(1)
The District’s central office is located within the City’s limits; however, the number of employees
includes employees employed in school throughout the District’s including those outside the City’s
limits.
Source: City’s Comprehensive Annual Financial Report.
The largest private employer in the City is General Motors Corporation (“GM”). In the early
1980s GM constructed a $600 million assembly plant in Wentzville (the “GM Wentzville Assembly
Plant”), and in the late 1990s GM constructed a $100 million stamping plant adjacent to the GM
Wentzville Assembly Plant and GM recently completed the construction of a $30 million stamping
facility adjacent to the GM Wentzville Assembly Plant. Since the opening of the GM Wentzville
Assembly Plant, GM has been the largest commercial employer in Wentzville. The GM Wentzville
Assembly Plant produces full-size vans for GM’s North American Truck Platforms (NATP). The
GM Wentzville Assembly Plant is the only GM plant that manufactures large GM vans. In May
2010, GM announced plans to manufacture compressed natural gas and liquefied petroleum gas
powered versions of the Chevrolet Express and GMC Savana full-size vans at the GM Wentzville
Assembly Plant for the 2011 model year.
In May 2009, GM filed for bankruptcy under Chapter 11 and announced plans to close 14
plants. The GM Wentzville Assembly Plant was not among the plants closed. GM laid off
approximately ½ of the employees at the GM Wentzville Assembly Plant. In 2009, the United States
Department of Treasury established Vehicle Acquisition Holdings, LLC, as a Delaware limited
liability corporation, which was subsequently converted to a Delaware corporation, NGMCO, Inc.
On July 10, 2009, NGMCO, Inc. acquired substantially all of the assets and assumed certain liability
of GM through a 363 Sale under the Bankruptcy Code. Upon acquisition of GM’s assets, NGMCO,
Inc. changed its name to General Motors Corporation (“New GM”). On July 10, 2009, New GM
began its operations with debt and other liabilities that were $92.7 billion less than GM’s total
amount of debt and other liabilities on July 9, 2009. On May 5, 2011, New GM announced a fifth
consecutive profitable quarter with a net income attributable to common stockholders of $3.2 billion.
In November and December of 2010, New GM consummated a public offering of 550 million
shares of common stock and 100 million shares of Series B Preferred Stock and listed both of these
securities on the New York Stock Exchange and the common stock on the Toronto Stock Exchange.
New GM’s stock is traded on the New York stock exchange under the symbol GM and GMPRB.
Additional information regarding GM is contained in its annual registration statements with the
Securities and Exchange Commission (“SEC”). A copy of such statements may be obtained from the
SEC and is available on the Internet at http//www.sec.gov/edgarhp.htm. Further information
regarding recent earnings announcements and SEC filings are available at the General Motors
website at http://www.gm.com/company/investor_information/sec.
15
Employment
According to estimates of the United States Department of Commerce, Bureau of Census, in
2000 the total civilian labor force of the City was 3,427 and 177 people were unemployed. This
represented a 5.2% unemployment rate.
Building and Construction Data
The following table sets forth the number of units and value of building permits issued by the
City for the years 2006 through 2010:
Residential
Fiscal
Number
of Units
Value
Year
2006
796
$175,341,938
2007
622
138,240,372
2008
303
67,893,188
2009
345
75,898,569
2010
379
74,934,096
_____________
Commercial
Number
of Units
Value
32
$44,253,903
20
65,386,203
23
15,306,570
9
36,583,621
6
14,183,242
Total
Value
$219,595,841
203,626,575
83,199,758
112,482,190
89,117,338
Source: Public Works Department.
Housing
The following table sets forth statistics from the 2000 census relating to housing for the City
and, for comparative purposes, of other census entities:
2000 Median Value
of Owner
Occupied Housing
City of Wentzville
$113,100
Other Entities:
St. Charles County
126,200
St. Louis MSA (MO Part) 107,900
State of Missouri
89,900
__________
Source: U.S. Department of Commerce, Bureau of Census.
16
Units Less
than 5 yrs. old
Units More than
50 years old
34.9%
11.1%
20.1
7.0
9.8
4.7
25.5
23.6
Income
The following table sets forth statistics from the 2000 census relating to housing for the City
and, for comparative purposes, of other census entities:
Per Capita
Income In
1999
Median Family
Income In
1999
City of Wentzville
$18,039
Other Entities:
St. Charles County
23,592
St. Louis MSA (MO Part) 23,556
State of Missouri
19,936
__________
$53,082
64,415
55,587
46,044
% People
Below
Poverty Level
11.6%
4.0
9.6
11.7
Source: U.S. Department of Commerce, Bureau of Census.
THE CITY’S FINANCES
Accounting and Reporting Practices
The accounts of the City are organized on the basis of funds and account groups, in
conformance with generally accepted accounting principles applicable to governments.
The City’s government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary
fund financial statements. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as
revenues in the year for which they are levied. Grants and similar items are recognized as revenue as
soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon
as they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period.
For this purpose, the City considers revenues to be available if they are collected within 60 days of
the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred,
as under accrual accounting.
The Board of Aldermen annually engages an independent certified public accountant for the
purpose of performing an audit of the books of account, financial records, and transactions of the
City.
Investments
The City’s investments are in demand deposits, savings accounts, certificates of deposit,
obligations of the United States Treasury and repurchase agreements. Most City investments are in
instruments that have a maturity of less than one year to insure that surplus funds are available in the
event the Board of Aldermen elects to appropriate such monies. All City deposits and investments
are either insured by federal depository insurance or collateralized. Pursuant to the Missouri Revised
Statutes, acceptable collateral includes obligations of the United States Treasury, United States
Government agencies, State of Missouri, and local governments in Missouri with populations greater
than 400,000.
17
Budget Process
The City Administrator prepares an annual budget for the ensuing fiscal year. The budget is
based upon information provided by the various City departments and employees. After a proposed
budget is prepared, it is submitted to the Board of Aldermen for review. The Board of Aldermen may
revise, alter, increase or decrease the items contained in the proposed budget, provided that total
authorized expenditures from any fund do not exceed the estimated revenues to be received plus any
unencumbered balance or less any deficit estimated for the beginning of the budget year. The budget
is legally enacted by ordinance following public hearings on the proposed budget.
Pursuant to the Missouri Revised Statutes, the annual budget must present a complete
financial plan for the ensuing fiscal year, and must include at least the following information:
(1) A budget message describing the important features of the budget and major changes
from the preceding year;
(2) Estimated revenues to be received from all sources for the budget year, with a
comparative statements of actual or estimated revenues for the two years next preceding,
itemized by year, fund, and source;
(3) Proposed expenditures for each department, office, commission, and other classifications
for the budget year, together with a comparative statements of actual or estimated
expenditures for the two years next preceding, itemized by year, fund, activity and object;
(4) The amount required for the payment of interest, amortization, and redemption charges
on debt; and
(5) A general budget summary.
A motion from the Board of Aldermen is required to transfer budgeted amounts between
funds, or to transfer substantial budgeted amounts between departments within any fund or for any
revisions that would alter the total expenditures of any fund.
The General Fund
In accordance with established accounting procedures for governmental units, the City
records its financial transactions under various funds. The largest is the General Fund, from which all
general operating expenses are paid and to which taxes and all other revenues not specifically
allocated by law or contractual agreement to other funds are deposited.
18
The following table sets forth information extracted from the City’s audited financial
statements for the years 2007 through 2010:
SUMMARY OF OPERATIONS
GENERAL FUND
2007
REVENUES
General property and sales taxes
Licenses and permits
Intergovernmental
Fines and forfeitures
Interest/Investment Income
Administrative Charge
Miscellaneous
Total Revenues
Fiscal Year Ended December 31
2008
2009
2010
$12,141,248
1,099,840
81,500
947,351
339,393
–
334,502
14,943,834
$13,111,045
515,205
25,300
1,203,573
162,026
–
246,021
15,263,170
$12,530,689
590,327
25,615
1,221,071
48,362
504,702
310,329
15,231,095
$12,894,375
545,064
23,619
1,198,840
28,807
513,794
296,255
15,500,754
2,389,677
5,443,985
4,445,593
842,553
13,121,808
2,647,409
6,043,183
4,587,180
1,107,035
14,384,807
2,759,833
6,231,993
4,605,963
496,561
14,094,350
2,859,968
6,771,675
4,661,238
301,130
14,594,011
Excess of Revenues Over
(Under) Expenditures
1,822,026
873,363
1,136,745
906,743
Other Financing Sources (Uses)
Net Operating transfers in (out)(1)
(468,437)
(1,723,502)
(1,062,951)
(167,948)
Net Changes in Fund Balances
1,353,589
(845,139)
73,794
738,795
Fund Balances –
Beginning of Year
7,014,877
8,368,466
7,523,327
7,597,121
$ 8,368,466
$ 7,523,327
$ 7,597,121
$ 8,335,916
EXPENDITURES
Current:
General government
Public safety
Community development
Capital outlay
Total Expenditures
Fund Balances - End of Year
__________
(1)
The City contributes surplus revenues from the General Fund to the Capital Project Fund to pay a
portion of major capital improvements in the City. The City also finances a portion of the
expenditures for the Park Fund with General Fund revenues.
Source: Derived from the annual financial statements of the City.
19
Projected 2011 General Fund Results
The City’s Fiscal Year ends on December 31, 2011. Based on the budget for the 2011 Fiscal
Year and year-to-date financial results, the General Fund balance is projected to be $8,385,184
compared to $8,335,916 for the 2010 Fiscal Year.
Tax Increment Financing
Pursuant to the Real Property Tax Increment Allocation Redevelopment Act (the “TIF Act”),
cities and counties may implement Tax Increment Financing to induce the development of an area
which has been lacking growth and development and to eliminate conditions which have caused an
area to become a conservation or blighted area as such terms are defined in the TIF Act. Tax
Increment Financing provides a source of funds by which a city may pay for Redevelopment Project
Costs (as defined by the TIF Act) over a period not longer than twenty three years from the date in
which Tax Increment Financing was adopted.
Pursuant to the TIF Act, a city designates Tax Increment Financing by adopting an ordinance
approving a redevelopment plan and designating a redevelopment area. The certified total assessed
valuation of all real property within a redevelopment area, as determined by the county assessor
immediately following passage of the ordinance designating the redevelopment area, is considered
the initial equalized assessed valuation. All taxes collected by applying the tax rate of all taxing
bodies having the power to tax real property in the redevelopment area upon any increase in the
equalized assessed valuation over the initial equalized assessed valuation is deposited in a special
allocation fund for the redevelopment area. Such incremental revenues are referred to as “Payments
in Lieu of Taxes.” In addition, fifty percent (50%) of the total additional revenue from taxes which
are imposed by a city or other taxing districts and which are generated by economic activities in the
redevelopment area over the amount of such taxes generated by economic activities within the
redevelopment area, are deposited in the special allocation fund. Monies in the special allocation
fund may be used for payment of redevelopment project costs or for payment of principal and
interest on obligations issued to finance redevelopment project costs.
The City has a Tax Increment Financing Redevelopment Area as described below:
On January 25, 2006 the City designated a redevelopment area pursuant to the TIF Act known
as the M&B Sachs Business Park Redevelopment Area (the “M&B Sachs Redevelopment Area”).
The initial assessed valuation is $17,900 and the 2010 incremental value was $1,055,701. As
indicated hereinbefore, the City will not realize any increase in ad valorem taxes attributable to any
increases in assessed valuation in a redevelopment area during the time in which Tax Increment
Financing is effect.
The Redevelopment Area consists of approximately 23 acres of land located adjacent to the
Edinger Road Redevelopment Area. The Redevelopment Area was declared a conservation area by
the Board of Aldermen of the City on January 25, 2006 pursuant to the TIF Act. The redevelopment
project created one 11 acre lot and 10 additional smaller lots.
The City issued notes in the aggregate principal amount of $1,002,000 that were purchased by
the developer.
20
SOURCES OF REVENUE
The City derives its revenues from a variety of sources. The following list sets forth the
primary sources of City revenues for the General Fund for the fiscal year ended December 31, 2010:
Revenues
Revenue Source
TAXES:
Property Taxes
Gross Receipts
Sales(1)
Other, Penalties and Interest
$ 5,463,279
2,828,583
4,544,687
57,826
12,894,375
545,064
23,619
1,198,840
28,807
513,794
296,255
$15,500,754
LICENSES AND PERMITS
INTERGOVERNMENTAL
FINES AND FORFEITURES
INTEREST
ADMINISTRATIVE CHARGE
MISCELLANEOUS
Percentage of
Total Revenues
35.25%
18.25
29.32
.37
83.19
3.52
.15
7.73
.19
3.31
1.91
100.00%
__________
(1)
Includes a use tax at the rate of 1%.
Source: Office of the Finance Director.
The following is a summary of some of the more significant revenue sources of the City:
Property Taxes
The largest source of City General Fund revenues is property taxes. Property taxes are levied
against the following classifications of property: real property, personal property, railroads and
utilities. During the 2010 Fiscal Year property taxes represented approximately 35.25% of total
General Fund receipts.
Tax Procedures
Assessment of real property pursuant to the Constitution of Missouri requires such property to
be classified in subclasses consisting of agricultural, residential or commercial, permits different
assessment ratios for each subclass and requires uniformity in taxation of real property within each
subclass. Pursuant to the Constitution, agricultural property is assessed at 12% of its productivity
value, residential property is assessed at 19% of true value, and commercial property is assessed at
32% of true value.
Personal property is generally assessed at 33-1/3% of book value; however subclasses of
tangible personal property are assessed at different percentages. These percentages are as follows:
½% for grain and other agricultural crops in an unmanufactured condition, 12% for livestock, farm
machinery and poultry, and 5% for historic motor vehicles. With respect to personal property of the
type maintained at the GM Wentzville Assembly Plant, in order to arrive at book value, the St.
Charles County Assessor depreciates the property at 20% per year over 4 years and then maintains
the value at 40%.
21
The State Tax Commission is responsible for the assessment of the distributable property of
railroads, railroad cars, rolling stock, street railroads, bridges, telephone, electric power and light
companies, electric transmission lines, pipeline companies, express companies and other similar
public utility corporations, companies and firms, and of the aircraft of airline companies. All other
real property within the City is assessed by the St. Charles County Assessor. The St. Charles County
Board of Equalization has the authority to adjust and equalize the values of individual properties
appearing on the tax rolls.
By statute, on January 1 in every odd-numbered year, each county assessor must adjust the
assessed valuation of all real property located within the county in accordance with a two-year
assessment and equalization maintenance plan approved by the State Tax Commission.
The following table indicates the assessed valuation for the City for the past five tax years:
Year
2006
2007
2008
2009
2010
__________
Real
Property
$428,914,698
515,372,859
558,556,230
521,886,796
526,155,882
Personal
Property(1)
$ 93,019,682
98,168,683
115,071,933
98,100,035
95,399,922
Total
$521,934,380
613,541,542
673,628,163
619,986,831
621,555,804
(1)
Annual changes in personal property assessment are primarily attributable to the GM Wentzville
Assembly Plant. The assessed valuation of personal property at the GM Wentzville Assembly Plant
for the past five years $30,352,799 in 2006, $27,639,839 in 2007, $35,178,568 in 2008, $22,109,627
in 2009 and $21,657,572 in 2010. Because personal property assessment declines as it depreciates in
value, the City could experience a substantial decline in assessment in the future.
Source: City’s 2010 Comprehensive Annual Financial Report and Office of the County Registrar.
The following table sets forth the estimated market value of taxable property for 2010 based
on the 2010 assessed valuation and the assessment ratios described hereinbefore:
Subclass
Residential Property
Commercial Property
Agricultural Property
Personal Property
Total
__________
Assessed
Valuation
$367,225,750
157,256,782
1,673,350
95,399,922
$621,555,804
Assessment
Ratio
19.0%
32.0
12.0
33.3
Estimated
Market Value
$1,932,767,105
491,427,444
13,944,583
286,199,766
$2,724,338,898
Source: Office of the County Registrar.
The Hancock Amendment
An amendment to the Missouri Constitution limiting taxation and government revenue was
approved by Missouri voters on November 4, 1980. The amendment (popularly known as the
Hancock Amendment) places limitations on governmental revenues and the levying or increasing of
taxes without voter approval. The amendment also includes provisions for rolling back tax rates. If
the assessed valuation of property, excluding the value of new construction and improvements,
increases by a larger percentage than the increase in the general price level from the previous year,
the maximum authorized current levy applied thereto in each political subdivision must be reduced
to yield the same gross revenue from existing property, adjusted for changes in the general price
level, as could have been collected at the existing authorized levy on the prior assessed value.
22
Tax Levies and Collection
Not later than September 30 of each year, the Board of Aldermen sets the rate of tax for the
City and files the tax rate with the St. Charles County Registrar by October 1. The Missouri State
Auditor is responsible for reviewing the rate of tax to insure that it does not exceed constitutional
rate limits.
Taxes are levied on all taxable real and personal property owned as of January 1 in each year.
Certain properties, such as those used for charitable, education, and religious purposes, are excluded
from ad valorem taxes for both real and personal property.
Payment of tax on real and personal property is due by December 31, after which date they
become delinquent and accrue a penalty of one percent per month. The St. Charles County Collector
deducts a commission equal to 2.1% of the taxes collected for his services. After such collections and
deductions of commission, taxes are distributed to the City.
Tax Rates
The following table sets forth the City’s tax rates per $100 of equalized assessed valuation for
the tax years ended December 31, 2006 through 2010:
General Government
Park
Total
__________
2006
$ .8930
.0804
$ .9734
2007
$ .8329
.0750
$ .9079
2008
$ .8329
.0750
$ .9079
2009
$ .8329
.0750
$ .9079
2010
$ .8325
.0750
$ .9075
Source: City of Wentzville Office of the Director of Finance.
Collections
The following table sets forth the amount of taxes levied and collected for the past five years:
Levy
Year
2006
2007
2008
2009
2010
__________
Total Taxes
Levied
$5,083,137
5,479,200
6,039,547
5,386,874
5,381,566
Collected(1)
$5,064,681
5,335,926
5,774,304
5,072,095
4,943,973
(1)
Reflects collections as of December 31 of each year.
Source: Comprehensive Annual Financial Report.
23
% Collected
99.64%
97.39
95.61
94.16
91.97
Major Taxpayers
The following table sets forth information regarding the largest taxpayers in the City based on
2010 real and personal property tax assessment following review by the Board of Equalization:
Taxpayer
General Motors Corp(1)
THF Wentzville Development LLC
Dierbergs Wentzville LLC
THF Wentzville Two Development LLC
MEPCO Finance Corporation
Parr Four LLC
Target Corporation
THF Wentzville Three Development LLC
Madison Warehouse Corp.
HD Development of Maryland Inc.
__________
Assessed
Business
Valuation
Auto Assembly
$39,556,282
Wal-Mart and Other Retail
6,927,760
Dierbergs Stores
6,100,891
Retail
4,929,996
Property Owner
4,123,193
R K Stratman Inc.
3,502,910
Retail
3,450,763
Retail
3,382,508
Warehousing
3,116,533
Home Depot
2,254,906
% of Total
Assessed
Valuation
6.42%
1.12
.99
.80
.67
.57
.56
.55
.51
.37
(1)
Includes personal property equal to $21,657,572.
Source: Office of the St. Charles County Assessor.
Gross Receipts Tax
The third largest source of General Fund revenues is the gross receipts tax which accounted
for approximately 18.25% of total General Fund revenues for the 2010 Fiscal Year. The utility
license tax is a 5% tax applied to the sales of commercial and domestic electricity, natural gas and
telephone service.
Sales Tax
A 1% City sales tax for general revenue was authorized by the State Legislature and was
imposed following a favorable vote at an election held in August of 1972. The following table sets
forth the total sales tax receipts from the 1% general sales tax of the City for the years 2006 through
2010:
General
Sales Tax Receipts(1)
$3,422,317
3,967,336
4,241,138
4,234,539
4,554,687
Year
2006
2007
2008
2009
2010
__________
(1)
Excludes the City’s use tax.
Source: Office of the Director of Finance.
24
Other Revenue
The following are other major sources of revenue of the City that are not accounted for as part
of the General Fund:
½¢ Capital Improvement Sales Taxes
On November 8, 1994 voters in the City authorized a ½¢ sales tax for capital improvements.
The City began receiving this tax in April 1995. The following table sets forth the capital
improvement sales tax received by the City for the years 2006 through 2010:
Capital Improvement
Sales Tax Receipts
$1,711,153
1,983,700
2,120,556
2,117,261
2,229,862
Year
2006
2007
2008
2009
2010
__________
Source: Office of the Director of Finance.
Transportation Sales Tax
On August 3, 1999 voters authorized a ½¢ sales tax for transportation purposes for a period of
15 years (the “Transportation Sales Tax”). This tax may be used exclusively for funding
transportation improvements such as resurfacing of roadways, upgrading roads and construction of
new roadways. The following table sets forth the transportation sales tax received by the City for the
years 2006 through 2010:
Transportation
Sales Tax Receipts
$1,634,105
1,893,049
2,023,671
2,016,231
2,139,238
Year
2006
2007
2008
2009
2010
__________
Source: Office of the Director of Finance.
Park Sales Tax
A ½% park sales tax was approved at an election held on August 3, 2010 which became
effective on January 1, 2011. The tax may be used exclusively for funding park improvements and
park operations. For the 2011 Fiscal Year, the first year when the tax will be in effect, the City
expects to receive approximately $2,163,000. The City intends to use a portion of the revenues from
the tax to pay the debt service on the City’s outstanding Certificates of Participation, Series 2010B
and the Certificates of Participation, Series 2011. The balance of the funds are expected to be spent
for park operations and maintenance.
25
Proprietary Fund Revenues
The City maintains several proprietary funds, including the Water Fund and Wastewater Fund.
Proprietary funds are used to account for operations that are financed and operated in a manner
similar to private business enterprises. Revenues for the Water Fund and for the Wastewater Fund
are derived principally from fees charged to customers obtaining services from the City’s
Waterworks System (the “Waterworks System”) and the Sewerage System (the “Sewerage System”).
Revenues from the Water Fund and Wastewater Fund are used to pay operating expenses of the
Waterworks System and Sewerage System and debt service on certain lease obligations of the City.
Revenues from the Wastewater Fund are also used to pay debt service on revenue bonds that have a
lien on the Sewerage System revenue.
THE WATERWORKS SYSTEM
The City’s waterworks facilities include a distribution system, a well, three storage facilities
and 2 booster stations. Under a contract with St. Charles County Water District #2 (“Water District
#2”), the City may receive up to 9.0 million gallons of water per day of which 2 million is reserved
for GM. GM’s average water consumption is 685,000 gallons per day with a peak usage of 1.65
million gallons per day. The City’s water consumption averages 2.96 million gallons per day with
peak usage during summer months of 5.5 million gallons per days. The City has a well system, with
a production capacity of 1.1 million gallons per day, which currently serves as a back-up water
supply.
The City owns three elevated storage towers with a combined capacity of 3,375,000 gallons.
An additional 2.0 million gallon capacity ground storage tank is located in the City at the site of the
GM Wentzville Assembly Plant.
The water distribution system consists of approximately 231.0 miles of water main ranging
from 4” to 24” in diameter.
Management of Waterworks
The Board of Aldermen is responsible for all basic policy decisions relating to the Waterworks
System including budgetary matters, bidding, construction, and rates and fees for services. The
Director of Public Works manages the Waterworks System under the direction of the City
Administrator. Responsibilities of the Director of Public Works include management of water and
sewer operations and maintenance staff, budget development, negotiating contracts, developing bid
specifications, and otherwise planning and directing all activities of the Waterworks System. Daily
operations and maintenance of the Waterworks System are performed by 18 operators and
maintenance personnel. All operators are certified and licensed as required by the State.
Service Area and Customers
Water is provided by the Waterworks System to approximately 10,000 customers living
within the City and approximately 250 customers located outside the City limits. Portions of the City
that are not served by the Waterworks System receive water from wells.
26
The following table sets forth the number of customers for the System and total water usage
for the last three fiscal years:
Fiscal
Year
2008
2009
2010
Number of
Customers
9,558
9,771
10,082
Gallons of
Water Sold
1,221,319,064
1,081,340,412
1,224,488,923
_________
Source: Public Works Department.
The following table sets forth information regarding the largest customers of the Waterworks
System based on revenues for the 2010 Fiscal Year:
Customer
General Motors
Gundaker Peine Apt.
Century Link
Parklane Care Center
St. Joseph Health
American Heritage Villas
Budget Inn
Schnucks Market
Lindenwood Ice Rink
Golf Club Villas
__________
Source: Public Works Department
Water Revenue
$442,426
74,849
34,377
24,986
11,152
11,150
10,192
9,589
8,427
7,917
% of Total
10.50%
1.78
.82
.59
.26
.26
.24
.23
.20
.19
Billing
Customers of the Waterworks System are billed for services monthly. Bills are due 10 days
after the billing date. Any bill remaining unpaid 30 days following the due date accrues a delayed
payment charge equal to 1.5 percent of the amount billed.
Bills are considered delinquent if not paid 10 days following the billing date. Customers are
notified of any such delinquency and the scheduled disconnect date on the next bill. In the event a
bill remains unpaid for an additional 10 days following the second billing date, the City is authorized
by ordinance to discontinue water services from the premises until the delinquent amount and all
associates charges have been paid.
The City estimates that approximately 1% of the customers do not pay their bills within 90
days following the billing date. Service to delinquent customers is discontinued until the billed
amount, penalties and deposit have been paid.
Rates and Charges
General
Rates and charges for the services of the Waterworks System are established by the Board of
Aldermen and are not subject to regulation by any other jurisdiction. The current charges for both
water and sewer rates were established by ordinance and became effective for bills issued after
January 1, 2011 (the “Rate Ordinance”). The current rates represented approximately a 22% increase
over the sewer rates that had previously been in effect and water rates increased by 10%.
27
Water Rates
Customers within the City limits are billed a minimum monthly charge based on meter size as
set forth below and a volume charge equal $3.63 per 1,000 gallons of water.
Minimum Monthly Bill
Meter Size
¾”
1”
1½”
2”
3”
4”
6”
8”
10”
Water Base Charge
$ 4.16
6.65
11.42
16.17
26.76
48.18
71.26
85.51
114.02
Tap-on-Fees
Tap-on-fees are based on the meter size. The minimum tap on fee is $800 for water customers.
Operating Results
The following table sets forth certain financial information for the Waterworks System for the
Fiscal Years 2007 through 2010 extracted from the audited financial statements of the City:
28
SUMMARY OF OPERATIONS
WATERWORKS SYSTEM
2007
OPERATING REVENUES
Charges for Services(1)
Licenses and permits
Total Operating Revenues
Fiscal Year Ended December 31
2008
2009
2010
$ 5,221,164
6,675
5,227,839
$ 4,686,069
3,285
4,689,354
$ 3,992,322
3,325
3,995,647
$ 4,749,462
5,660
4,755,122
OPERATING EXPENSES EXCLUDING
DEPRECIATION
Personnel Services
Other Charges and Services
Operating Supplies
Repairs and Maintenance
Contractual Service
Total Operating Expense
687,059
2,060,812
246,733
85,731
31,787
3,112,122
680,113
2,484,975
465,896
89,965
56,011
3,776,960
723,634
2,005,170
317,965
101,695
38,281
3,186,745
721,621
2,508,545
456,307
101,688
34,228
3,822,389
OPERATING INCOME
PRIOR TO DEPRECIATION
2,115,717
912,394
808,902
932,733
(752,592)
(831,804)
(897,294)
159,802
(22,902)
35,439
175,695
(6,046)
279,891
(322,344)
102,841
(310,551)
67,449
(290,680)
—
10,975
180,624
32,986
(141,278)
(150,745)
27,292
386
(180,032)
—
12,178
(211,053)
(202,934)
(175,614)
DEPRECIATION AND AMORTIZATION
OPERATING INCOME (LOSS)
NONOPERATING REVNEUES
(EXPENSES)
Investment Income
Investment Expense
Gain (Loss) on Disposable of Capital
Assets
Miscellaneous Income
Total Nonoperating Revenue (Expenses)
(422,891)
1,692,826
INCOME BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS
1,873,450
9,057
CAPITAL CONTRIBUTIONS
2,421,187
1,738,897
1,135,298
26,895
717,496
4,294,637
1,774,849
1,649,860
676,015
—
1,005,344
—
—
TRANSFERS IN (OUT)
CHANGE IN NET ASSETS
—
PRIOR PERIOD ADJUSTMENT
NET ASSETS, JANUARY 1
NET ASSETS, DECEMBER 31
__________
851,629
—
14,077,421
19,377,402
21,152,251
22,802,111
$18,372,058
$21,152,251
$22,802,111
$23,478,126
(1)
The decline in revenues from 2007 to 2009 was primarily attributable to the economy, lower usage by
General Motors and wet weather.
Source: Derived from audited financial statements of the City.
29
DEBT OF THE CITY
General
On August 2, 1988, an amendment to the Missouri Constitution was approved which
decreased the vote required to pass a proposition to issue general obligation bonds payable from
unlimited ad valorem taxes from two-thirds (2/3) to four-sevenths (4/7) of the qualified voters voting
thereon for elections held at the general municipal election day, primary or general elections. A vote
of two-thirds (2/3) of the qualified voters voting on the specific general obligation bond proposition
is required at all other elections.
The Missouri Constitution provides that the amount of bonds payable out of tax receipts shall
not exceed 10% of the total assessed valuation of the taxable property of the City. The Missouri
Constitution permits the City to become indebted for an additional 10% of the value of taxable,
tangible property for the purpose of acquiring rights-of-way, constructing, extending, and improving
streets and avenues; and constructing, extending and improving a sanitary or storm sewer system.
Lease revenue bonds payable from annual appropriations do not require voter approval and do not
count against the constitutional debt limitation.
Outstanding General Obligation Debt
The City’s only outstanding general obligation bonds are $920,000 of Neighborhood
Improvement District Limited General Obligation Bonds (Bear Creek Stormwater Detention,
Sanitary Sewer and Water Improvement Project), Series 2006 (the “NID Bonds”). In 1997 the City
created the Bear Creek Golf Course Community Neighborhood Improvement District (the “NID
District”) pursuant to the provisions of the Neighborhood Improvement District Act set forth in
Sections 67.453 to 67.475, inclusive of the Missouri Revised Statutes, as amended (the “Act”). The
NID Bonds refunded a prior series of bonds issued in conjunction with the NID District. The NID
Bonds constitute a valid and legally binding indebtedness of the City, payable both as to principal
and interest, from (a) special assessments to be assessed on the real property within the NID District
which is benefited by improvements financed by the NID Bonds, (b) moneys in a Bond Reserve
Fund created for the NID Bonds and (c) if not so paid, from the first available moneys in the City’s
general fund or other legally available fund. The full faith, credit and resources of the City are
irrevocably pledged for the prompt payment of the principal of and interest on the NID Bonds as the
same become due; provided that the taxing power of the City is not pledged to the payment of the
NID Bonds.
Legal Debt Limit and Debt Margin
The following table sets forth the City’s legal debt limit and debt margin:
City Purposes
Basic Limit
Street and Sewer
Additional Limit
$621,555,804
$621,555,804
Debt Limit - 10% of Assessed Value
Less: General Obligation Bonds
$62,155,580
920,000
$62,155,580
-0-
Legal Debt Margin
$61,235,580
$62,155,580
2010 Assessed Value
30
Direct and Overlapping Debt
The following table sets forth information relating to the direct and overlapping general
obligation debt of the City:
Outstanding
Bonds (1)
City of Wentzville
$
—
St. Charles Community College
37,875,000
St. Charles County Ambulance District
9,845,000
Wentzville R-IV School District
199,898,677
$247,618,677
__________
Percent
Applicable to
the City(2)
100.00%
8.47
8.43
38.07
City’s Direct
and Overlapping
Debt
$
—
3,208,013
829,934
76,101,426
$80,139,373
(1)
The table excludes lease and loan obligations which are subject to annual appropriate for payment
and for which a tax levy cannot be imposed without voter approval. The table also excludes the City’s
NID Bonds and $5,358,000 of NID Bonds of St. Charles County that are a general obligation of St.
Charles County but are expected to be paid from special assessments and for which the County may
not levy a general property tax and Fort Zumwalt School District which has less than 1% of its
assessed valuation within the City.
(2)
Estimate based on 2010 locally assessed real and personal property.
Source: Offices of the political subdivisions, St. Charles County Registrar, St. Charles County Assessor and
other public records.
Lease and Other Obligations
General
Obligations secured by annually appropriated funds do not constitute an indebtedness for
purposes of any Missouri statutory or constitutional debt limit. Such obligations are payable solely
from available funds of a governmental body and neither taxes nor a specific source of revenues may
be pledged to make payments on such obligations. Any increase in taxes required to generate
additional funds with which to make payments on such obligations would be subject to voter
approval.
31
Outstanding Lease Obligations
The following table sets forth the City’s outstanding lease obligations as of the date of delivery of
the Bonds:
Issue
Leasehold Revenue Refunding and Improvement
Bonds, Series 1999
Principal
Outstanding
$
435,000
Leasehold Revenue Refunding
Bonds, Series 2006
1,600,000
Leasehold Revenue Refunding
Bonds, Series 2008
4,535,000
Certificates of Participation, Series 2010A
5,555,000
Certificates of Participation, Series 2010B
3,710,000
Certificates of Participation, Series 2011
18,900,000
Leasehold Revenue Bonds, Series 2011
6,000,000*
$40,735,000*
Obligations secured by annually appropriated funds do not constitute an indebtedness for
purposes of any Missouri statutory or constitutional debt limit. Such obligations are payable solely
from annually appropriated funds of a governmental body and neither taxes nor a specific source of
revenues may be pledged to make payments on such obligations.
Payments on lease obligations may be made from any funds of the City legally available for
such purpose. Subject to annual appropriation, the City intends to make lease payments on the Series
1999 Bonds and the Bonds from revenues from the Waterworks System and to make lease payments
on the Series 2006 Bonds and the Series 2008 Bonds from revenues from the Sewerage System, and
to the extent required, any other funds legally available for such purpose. The City intends to make
lease payments on the Series 2010A Certificates from the City’s ½¢ Capital Improvement Sales Tax
and, to the extent required, from the City’s general fund or any other funds legally available for such
purpose. The City intends to annually appropriate and pay for the 2010B Certificates from the City’s
½¢ Park Sales Tax, a 45% U.S. Treasury Interest Subsidy and, to the extent required, from the City’s
Capital Improvement Sales Tax, the general fund or any other funds legally available for such
purpose. The City intends to annually appropriate and pay for the Series 2011 Certificates from the
City’s ½¢ Park Sales Tax and, to the extent required, from the City’s Capital Improvement Sales
Tax, the general fund or any other funds legally available for such purpose.
* Subject to Change
32
Leasehold Obligations
The following table sets forth the debt service on the City’s lease obligations as of the date of
delivery of the Bonds:
Fiscal
Year
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
Total
Outstanding Lease Obligations
Principal
Interest(1)
$ 1,625,000
$1,278,228
1,670,000
1,241,980
1,710,000
1,201,314
1,750,000
1,155,274
1,980,000
1,102,951
2,035,000
1,044,314
2,120,000
979,430
2,190,000
908,377
2,270,000
828,888
2,355,000
741,107
2,005,000
667,012
1,050,000
585,979
1,100,000
539,779
1,150,000
489,729
1,200,000
436,254
1,260,000
379,254
1,320,000
318,144
1,385,000
252,144
1,455,000
181,509
1,525,000
115,273
58,658
1,580,000
$14,505,598
$34,735,000
The Bonds
Principal(2)
Interest(2)
$415,000
$ 113,291
385,000
142,448
390,000
138,020
395,000
133,145
395,000
127,812
405,000
121,098
415,000
112,997
425,000
103,453
430,000
92,402
445,000
80,148
455,000
66,575
475,000
51,787
490,000
35,400
480,000
17,760
—
—
—
—
—
—
—
—
—
—
—
—
—
—
$6,000,000
$1,336,336
Total Debt
Service
$ 3,431,519
3,439,428
3,439,334
3,433,419
3,605,763
3,605,412
3,627,427
3,626,830
3,621,290
3,621,255
3,193,587
2,162,766
2,165,179
2,137,489
1,636,254
1,639,254
1,638,144
1,637,144
1,636,509
1,640,273
1,638,658
$56,576,934
___________
(1)
The amounts are net of a 35% US Treasury Interest Subsidy in connection with certain of the City’s
outstanding certificates of participation.
(2)
Subject to change. Interest is based on assumed rates.
33
As noted hereinbefore, although a specific source of taxes and revenues may not be pledged to
make payments on lease obligations, the City intends to pay debt service on its lease obligations
from the Park Sales Tax, the Capital Improvement Sales Tax, the Sewerage Fund and the
Waterworks Fund. The following table sets forth the particular fund or revenue source from which
the principal and interest payments set forth in the table above are expected to be paid as of the date
of delivery of the Bonds:
Fiscal
Year
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
Total
Sewerage
Fund
$ 769,707
769,312
767,939
770,678
772,328
772,780
468,240
469,069
469,323
469,003
1,033,108(3)
—
—
—
—
—
—
—
—
—
—
$7,531,487
Waterworks
Fund*
$ 649,126
647,849
652,479
646,307
522,813
526,097
527,998
528,452
522,403
525,147
521,575
526,788
525,400
497,760
—
—
—
—
—
—
—
$7,820,194
Capital
Improvement Fund
$375,725
383,155
379,743
380,542
671,848
667,797
995,966
990,772
991,799
989,400
—
—
—
—
—
—
—
—
—
—
—
$6,826,747
Park Fund(1)
$ 1,636,961
1,639,111
1,639,174
1,635,891
1,638,776
1,638,736
1,635,224
1,638,536
1,637,766
1,637,704
1,638,904
1,635,979
1,639,779
1,639,729
1,636,254
1,639,254
1,638,144
1,637,144
1,636,509
1,640,273
1,638,657
$34,398,505
Total(2) *
$ 3,431,519
3,439,427
3,439,335
3,433,418
3,605,765
3,605,410
3,627,428
3,626,829
3,621,291
3,621,254
3,193,587
2,162,767
2,165,179
2,137,489
1,636,254
1,639,254
1,638,144
1,637,144
1,636,509
1,640,273
1,638,657
$56,576,933
_________
(1)
The amounts are net of a 35% US Treasury Interest Subsidy in connection with certain of the City’s
outstanding certificates of participation.
(2)
Annual totals in the table above may vary from the prior table due to rounding.
(3)
A substantial portion of the debt service is expected to be paid from a debt service reserve fund.
THE REFUNDING
Description
The Bonds are being issued for the purpose of refunding the Refunded Bonds. Following the
delivery of and payment for the Bonds, proceeds shall be deposited with UMB Bank, N.A., Kansas
City, Missouri, in an amount sufficient to pay the principal of and accrued interest on the Refunded
Bonds up to and including October 17, 2011, the date of redemption.
* Subject to Change
34
Estimated Sources and Uses of Funds*
The estimated sources and uses of funds for the Bonds are set forth below:
Sources of Funds
The Bonds
Cash on Hand(1)
Total
$6,000,000
551,953
$6,551,953
Uses of Funds
For Retirement of Refunded Bonds
Deposit to Reserve Fund
Costs of Issuance Including Underwriter’s Discount
Total
$5,861,825
528,453
161,675
$6,546,953
_________
(1)
Represents funds from the reserve fund established for the Refunded Bonds.
THE LEASED FACILITIES
The Leased Facilities will consist of a 1 acre site owned by the City and the water tower
located thereon and a site encompassing approximately 1 acre and the booster pump to be located
thereon. The water tower and booster pump have a value of $4,459,417 based on the present insured
value.
LEGAL MATTERS
Legal matters incident to the authorization, issuance and sale of the Bonds are subject to the
approving legal opinion of Cunningham, Vogel & Rost, P.C., St. Louis, Missouri, Bond Counsel.
Certain legal matters will be passed upon for the City by Cunningham, Vogel & Rost, P.C., St.
Louis, Missouri. Bond Counsel has participated only in the preparation of portions of this Official
Statement captioned “LEGAL MATTERS,” “TAX MATTERS,” and “APPENDIX BDEFINITIONS OF WORDS AND TERMS,” and “APPENDIX C-SUMMARY OF THE
DOCUMENTS.” Bond Counsel expresses no opinion as to the accuracy or sufficiency of this
Official Statement or as to the financial statements contained herein. The various legal opinions to
be delivered concurrently with the delivery of the Bonds express the professional judgment of the
attorneys rendering the opinions as to the legal issues explicitly addressed therein. By rendering a
legal opinion, the opinion giver does not become an insurer or guarantor of that expression of
professional judgment, of the transaction opined upon, or of the future performance of parties to such
transaction, nor does the rendering of an opinion guarantee the outcome of any legal dispute that
may arise out of the transaction.
TAX MATTERS
Opinion of Bond Counsel
In the opinion of Cunningham, Vogel & Rost, P.C., Bond Counsel, under existing law, the
interest on the Bonds is excludable from gross income for federal and Missouri income tax purposes
and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on
individuals and corporations. It should be noted, however, that for the purpose of computing the
alternative minimum tax on corporations (as defined for federal income tax purposes), such interest
is taken into account in determining adjusted current earnings. The opinions set forth in this
paragraph are subject to the condition that the Corporation, the City and the Trustee comply with all
requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied
subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be,
excludable from gross income for federal and Missouri income tax purposes. The Corporation, the
* Subject to Change
35
City and the Trustee have covenanted to comply with each such requirement. Failure to comply with
certain of such requirements may cause the inclusion of interest on the Bonds in gross income for
federal and Missouri income tax purposes retroactive to the date of issuance of the Bonds.
The Bonds have not been designated as “qualified tax-exempt obligations” within the
meaning of Section 265(b) of the Code.
Bond Counsel’s opinion is based upon existing law, which is subject to change. Such opinion
is further based upon Bond Counsel’s actual knowledge of facts as of the date hereof. Bond Counsel
assumes no duty to update or supplement its opinion to reflect any facts or circumstances that may
come to Bond Counsel’s attention or to reflect any changes in any law that may thereafter occur or
be effective.
Bond Counsel expresses no opinion regarding other federal tax consequences arising with
respect to the Bonds.
Bond Counsel’s opinion speaks as of its date, is based upon current legal authority and
precedent, covers certain matters not directly addressed by such authority and precedent, and
represents Bond Counsel’s judgment as to the proper treatment of interest on the Bonds for federal
and Missouri income tax purposes. Bond Counsel expresses no opinion and provides no assurance
regarding the future activities of the City or the Corporation or about the effect of future changes in
the Code, the applicable regulations, the interpretation thereof, or the enforcement thereof by the
Internal Revenue Service.
Other Tax Consequences
Prospective purchasers of the Bonds should be aware that there may be tax consequences of
purchasing the Bonds other than those discussed under the caption “Opinion of Bond Counsel,”
including the following: (i) Section 265 of the Code denies a deduction for interest on indebtedness
incurred or continued to purchase or carry the Bonds, or, in the case of a financial institution, that
portion of such institution's interest expense allocable to interest on the Bonds (ii) with respect to
insurance companies subject to the tax imposed by Section 831 of the Code, Section 832(b)(5)(B)(i)
reduces the deduction for loss reserves by fifteen percent of the sum of certain items, including
interest on the Bonds; (iii) interest on the Bonds earned by certain foreign corporations doing
business in the United States could be subject to a branch profits tax imposed by Section 884 of the
Code; (iv) passive investment income, including interest on the Bonds, may be subject to federal
income taxation under Section 1375 of the Code for Subchapter S corporations that have Subchapter
C earnings and profits at the close of the taxable year, if greater than twenty-five percent of the gross
receipts of such Subchapter S corporation is passive investment income; and (v) Section 86 of the
Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take
into account, in determining gross income, receipts or accruals of interest on the Bonds. The
foregoing is not intended to be an exhaustive discussion of collateral tax consequences arising from
receipt of interest on the Bonds.
Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Bonds
should consult their own tax advisors as to the applicability of these tax consequences.
36
RATING
Moody’s Investors Service, Inc., 7 World Trade Center, 250 Greenwich, New York, New
York 10007 has assigned a rating of “Aa3” to the Bonds. Such rating reflects only the view of the
rating agency and any desired explanation of the significance of the rating should be obtained from
the rating agency. Generally, a rating agency bases its rating on the information and material
furnished to it and on investigations, studies and assumptions of its own. There is no assurance that a
rating will continue for any given period of time or that such rating may not be lowered or
withdrawn entirely by the rating agency. Such lowering or withdrawal may have an adverse effect on
the market price of the Bonds.
FINANCIAL ADVISOR
WM Financial Strategies, St. Louis, Missouri, is employed as Financial Advisor to the City to
render certain professional services, including advising the City on a plan of financing and assisting
in the preparation of this Official Statement for the sale of the Bonds.
UNDERWRITING
Edward D. Jones & Co., L.P., St. Louis, Missouri (the “Underwriter”) has agreed to purchase
the Bonds at a price equal to ___% of the principal amount thereof. The Bonds may be offered and
sold to certain dealers and others at prices lower than the initial public offering price, and such initial
offering price may be changed from time to time.
LITIGATION
Simultaneously with the delivery of and payment for the Bonds, the Mayor acting on behalf of
the City, will furnish to the Underwriter a certificate which shall state, among other things, that there
is no controversy, suit or other proceeding of any kind pending or to his actual knowledge,
threatened in any court (either State or Federal) restraining or enjoining the issuance or delivery of
the Bonds or questioning (i) the proceedings under which the Bonds are to be issued, (ii) the validity
of the Bonds, (iii) the payments required to be made under the Lease Purchase Agreement, or (iv) the
legal existence of the City or the title to office of the present officials of the City.
CONTINUING DISCLOSURE UNDERTAKING
Description of Undertaking
In accordance with the requirements of Rule 15c2-12 (the “Rule”) promulgated by the
Securities and Exchange Commission, the City has agreed to provide the following to the Municipal
Securities Rulemaking Board’s Electronic Municipal Market Access System (“EMMA”):
(1)
Audited financial statements and certain annual financial information and operating
data and information generally consistent with the information contained in this Official
Statement under the captions “THE CITY’S FINANCES,” “SOURCES OF REVENUE,”
“THE WATERWORKS SYSTEM” and “DEBT OF THE CITY” and information with
respect to litigation if, in the judgment of the City, such litigation would have a material
adverse affect on the financial condition of the City. Such information shall be made
available beginning on or prior to 180 days after the end of each Fiscal Year commencing
with the Fiscal Year ending December 31, 2011.
(2)
Notice of the occurrence of any of the following events with respect to the Bonds,
within 10 business days after the occurrence:
37
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
principal and interest payment delinquencies;
unscheduled draws on debt service reserves reflecting financial difficulties;
unscheduled draws on credit enhancements reflecting financial difficulties;
substitution of credit or liquidity providers, or their failure to perform;
defeasances;
rating changes;
tender offers;
bankruptcy, insolvency, receivership or similar event of the obligated
person; or
the occurrence of an Event of Nonappropriation under the Lease.
(3)
Notice of the occurrence of any of the following events with respect to the Bonds, if
material:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
non-payment related defaults;
adverse tax opinions or events affecting the tax-exempt status of the Bonds;
modifications to rights of Bond Owners;
Bond calls (other than mandatory sinking fund redemptions);
release, substitution or sale of property securing repayment of the Bonds;
consummation of a merger, consolidation, or acquisition involving an
obligated person, or the sale of all or substantially all of the assets of the
obligated person, other than in the ordinary course of business, the entry into
a definitive agreement to undertake such an action or the termination of a
definitive agreement relating to any such actions, other than pursuant to its
terms; or
appointment of a successor or additional trustee or change of name of a
trustee.
(4)
Notice of a failure (of which the City has knowledge) to provide the required annual
financial information on or before the date specified in its written continuing disclosure
undertaking.
The City may, from time to time, choose to provide notice of the occurrence of certain other
events, in addition to those listed above, if, in the judgment of the City, such other event is material
with respect to the Bonds, however, the City does not undertake to commit to provide any such
notice of the occurrence of any material event except those indicated herein.
The City reserves the right to modify, from time to time, the specific types of information
provided or the format of the presentation of such information, to the extent necessary or appropriate
in the judgment of the City; provided that the City agrees that any such modification will be done in
a manner consistent with the Rule as the same may be amended from time to time. The City reserves
the right to terminate the City’s obligation to provide annual financial information and notices of
material events, as set forth above, if and when the City no longer remains an “Obligated Person”
with respect to the Bonds within the meaning of the Rule. The City acknowledges that the City’s
undertaking pursuant to the Rule described under this heading is intended to be for the benefit of the
holders of the Bonds and shall be enforceable by the owners of the Bonds provided that the right to
enforce the provisions of this undertaking shall be limited to a right to obtain specific enforcement of
the City’s obligations hereunder and any failure by the City to comply with the provisions of this
undertaking shall not be an event of default with respect to the Bonds.
38
Prior Compliance
The City has complied with its prior continuing disclosure obligations.
CERTIFICATION OF OFFICIAL STATEMENT
Simultaneously with the delivery of the Bonds, the City will furnish to the Underwriter a
certificate which will state, among other things, that to the best of the City’s knowledge and belief,
this Official Statement (and any amendment or supplement hereto) as of the date of sale and as of the
date of delivery of the Bonds does not contain any untrue statement of a material fact and does not
omit to state a material fact required to be stated therein or necessary to make the statements herein,
in light of the circumstances under which they were made, not misleading in any material respect.
MISCELLANEOUS
This Official Statement is not to be construed as a contract or agreement between the City and
the Underwriter of any of the Bonds. Any statement made in this Official Statement involving
matters of opinion is intended merely as an opinion and not as a representation of fact. The
information and expressions of opinion contained herein are subject to change without notice, and
neither the delivery of this Official Statement nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the affairs of the City since
the date hereof.
CITY OF WENTZVILLE, MISSOURI
BY: ____________________________
Mayor
39
APPENDIX A
CITY OF WENTZVILLE, MISSOURI
FINANCIAL STATEMENTS
December 31, 2010
The financial statements presented within this Appendix have been extracted from the City’s
comprehensive annual financial report for the year ended December 31, 2010. The report includes
supplemental information and the auditor’s report which are not included herein. The financial
statements of the City are prepared in conformance with generally accepted accounting principles.
Copies of the comprehensive annual financial report, in its entirety, are available from the City.
Additionally, financial statements for prior years and the City’s budget for the fiscal year ending
December 31, 2011 may be obtained from the City.
INDEX
Statement of Net Assets ..................................................................................... A-2
Statement of Activities ...................................................................................... A-3
Balance Sheet - Governmental Funds................................................................. A-4
Reconciliation of the Balance Sheet of Governmental
Funds to the Statement of Net Assets ................................................................. A-5
Statement of Revenues, Expenditures and Changes
in Fund Balances- Governmental Funds ........................................................... A-6
Reconciliation of the Statement of Revenues, Expenditures
and Changes in Fund Balance of Governmental Funds to
the Statement of Activities.................................................................................. A-7
Statement of Net Assets – Proprietary Funds ..................................................... A-8
Statement of Revenues, Expenses and Changes in Net Assets –
Proprietary Funds ............................................................................................... A-9
Statement of Cash Flows – Proprietary Funds.................................................. A-10
Statement of Net Assets – Fiduciary Fund ....................................................... A-11
Notes to Financial Statements........................................................................... A-12
Budget and Actual – General Fund .................................................................. A-36
A-1
A-2
A-3
A-4
A-5
A-6
A-7
A-8
A-9
A-10
A-11
A-12
A-13
A-14
A-15
A-16
A-17
A-18
A-19
A-20
A-21
A-22
A-23
A-24
A-25
A-26
A-27
A-28
A-29
A-30
A-31
A-32
A-33
A-34
A-35
A-36
APPENDIX B
DEFINITIONS OF WORDS AND TERMS
In addition to words and terms, if any, defined elsewhere in this Official Statement, the words and terms
as used in the Lease Purchase Agreement, the First Supplemental Lease Purchase Agreement, the Deed
of Trust, the First Amendment to First Deed of Trust, the Master Indenture and the Second Supplement
shall have the following meanings, unless some other meaning is plainly intended.
“Additional Bonds” means any additional bonds, issued by the Corporation pursuant to the
Master Indenture.
“Additional Rentals” means the payments payable by the City pursuant to the Lease Purchase
Agreement.
“Arbitrage Instructions” means the Arbitrage Instructions attached to the Master Indenture
containing instructions regarding the investment of proceeds of the Bonds.
“Authorized Denominations” means $5,000 or any integral multiple thereof.
“Beneficiary” means the Trustee as Beneficiary under the Deed of Trust.
“Board of Aldermen” means the duly elected Board of Aldermen of the City.
“Bond Counsel” means Cunningham, Vogel & Rost, P.C. or other attorney or firm of attorneys
with experience in the field of municipal bond financing and approved by the Corporation and the City.
“Bond Documents” with respect to the Series 2011 Bonds, means the Master Indenture, the
Second Supplement, the Lease Purchase Agreement as amended by the First Supplemental Lease
Purchase Agreement, and the Deed of Trust as amended by the First Amendment to Deed of Trust.
“Bond Register” means the register and all accompanying records kept by the Bond Registrar
evidencing the registration, transfer and exchange of Bonds.
“Bond Registrar” means the Trustee when acting in such capacity under the Master Indenture.
“Bondowner”, “Owner”, or “Registered Owner” means the registered owner of any Bond.
“Bonds” means any Series of bonds and Additional Bonds issued by the Corporation pursuant to
the Master Indenture and any Supplemental Indenture.
“Business Day” means any day except Saturday, Sunday, a legal holiday, or a day on which
banking institutions located in the State of Missouri are authorized by law to close.
“City” means the City of Wentzville, Missouri, a municipal corporation and political subdivision
organized and existing under the constitution and laws of the State of Missouri.
“City Administrator” means the duly appointed and serving City Administrator of the City.
“City Representative”, in matters not requiring legislative authorization, means the Mayor, City
Administrator, or Finance Director of the City, or such other person so designated in writing by the City.
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“Closing Date” means the date of issuance and delivery of the Series 2011 Bonds.
“Code” means the Internal Revenue Code of 1986, as amended, and the applicable Treasury
regulations thereunder.
“Collateral” or “collateral” as used in the definition of Permitted Investments means the
obligations described in subparagraphs (1) and (2) of the definition of Permitted Investments.
“Corporation” means the Wentzville Economic Development Council, Inc., a Missouri not-forprofit corporation.
“Corporation Representative” means the President, or any Vice President of the Corporation,
and any other person or persons at the time designated by the Corporation in writing to act on behalf of
the Corporation in matters relating to the Series 2011 Bonds or the Bond Documents.
“Counsel” means an attorney duly admitted to practice law before the highest court of any state
and, without limitation, may include legal counsel for either the City or the Corporation.
“Debt Service Reserve Requirement” means with respect to the Series 2011 Bonds the amount
of $528,453.00*.
“Deed of Trust” means the First Deed of Trust dated as of even date with the Master Indenture
by and among the Corporation, the Mortgage Trustee, and the Trustee, as from time to time supplemented
or amended in accordance with the provisions thereof.
“Defeasance Obligations” means direct obligations of, or obligations guaranteed by, the
Department of the Treasury of the United States of America (including obligations issued or held in book
entry form) which are non-callable.
“Depository” or “DTC” means Depository Trust Company, New York, New York, a limited
purpose trust company organized under the New York Banking Law, a “banking organization” within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing
corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency”
registered pursuant to the provisions of Section 17A of the Security Exchange Act of 1934, and its
successors and assigns.
“Event of Default” means (a) with respect to the Lease Purchase Agreement, any Event of
Default as defined in the Lease Purchase Agreement and the First Supplemental Lease Purchase
Agreement; (b) with respect to the Deed of Trust, any Event of Default as defined in the Deed of Trust
and the First Amendment to Deed of Trust; and (c) with respect to the Master Indenture, any Event of
Default as defined in the Master Indenture and the Second Supplement.
“Event of Non-Appropriation” means the failure of the City to appropriate sufficient funds for
the payment of Rentals and Additional Rentals payable under the Lease Purchase Agreement for the
succeeding Fiscal Year.
“Finance Director” means the Finance Director or similar official of the City.
“First Amendment to Deed of Trust” means the First Amendment to First Deed of Trust dated
October 1, 2011 by and among the Corporation, the Mortgage Trustee and the Trustee.
* Preliminary, subject to change.
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“First Supplemental Lease Purchase Agreement” means the First Supplemental Lease
Purchase Agreement dated October 1, 2011 by and between the Corporation and the City.
“Fiscal Year” means the fiscal year now or hereafter adopted by the Corporation and, with
respect to the City, its fiscal year currently beginning on January 1 of each calendar year.
“Fitch” shall mean Fitch Investors Service, Inc., a corporation organized and existing under the
laws of the State of New York, its successors and assigns, and, if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating agency, Fitch shall mean any
other nationally recognized securities rating agency designated by the Corporation, with the approval of
the City, by notice to the Trustee and the City.
“Full Replacement Value” means the principal amount of the Series 2011 Bonds at the time
Outstanding.
“Impositions” means (a) with respect to the Lease Purchase Agreement, those taxes, assessments
and other impositions defined in the Lease Purchase Agreement; and (b) with respect to the Deed of
Trust, the items so identified in the Deed of Trust.
“Improvements” means certain improvements to the City’s potable water storage and
distribution system including, without limitation, a water tower and booster pump constructed and
installed on the Project Sites in accordance with the Plans and Specifications, and all other fixtures and
equipment installed or located thereon.
“Indenture” means the Master Indenture together with the Second Supplement.
“Interest Payment Date” with respect to the Series 2011 Bonds, means January 1 and July 1 of
each year so long as any of the Series 2011 Bonds remain Outstanding, beginning January 1, 2012.
“Leased Facilities” means the Project Sites together with the Improvements constructed and
installed thereon.
“Leasehold” means the leasehold interest created pursuant to the Lease Purchase Agreement and
the First Supplemental Lease Purchase Agreement.
“Lease Purchase Agreement” means the Lease Purchase Agreement dated as of even date with
the Master Indenture between the Corporation and the City, as from time to time supplemented or
amended in accordance with the Lease Purchase Agreement and the Master Indenture.
“Master Indenture” means the Indenture of Trust, dated July 1, 2005 between the Corporation
and the Trustee.
“Maturity” means, with respect to any Bond, the date on which the principal of such Bond
becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration
or acceleration or call for redemption or otherwise.
“Moody’s” shall mean Moody’s Investors Service, Inc., a corporation organized and existing
under the laws of the State of Delaware, its successors and assigns, and, if such corporation shall be
dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Moody’s
shall mean any other nationally recognized securities rating agency designated by the Corporation, with
the approval of the City, by notice to the Trustee and the City.
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“Mortgage Trustee” means the person so designated in the Deed of Trust and his successor or
successors which at any time may be substituted in his place pursuant to and at the time serving as
Mortgage Trustee under the Deed of Trust and the First Amendment to Deed of Trust.
“Outstanding” means, when used with reference to Bonds, as of a particular date, all Bonds
theretofore authenticated and delivered, except:
(a)
Bonds theretofore canceled by the Trustee or delivered to the Trustee for
canceling;
(b)
Bonds which are deemed paid under the Master Indenture;
(c)
Bonds in exchange for or in lieu of which other Bonds have been authenticated and
delivered pursuant to the Master Indenture;
(d)
Bonds alleged to have been mutilated, destroyed, lost or stolen which have been paid as
provided in the Master Indenture; and
(e)
Bonds held by or for the account of the Corporation, the City or any person controlling,
controlled by or under common control with either of them for purposes of any consent or other action to
be taken by the holders of a specified percentage of Bonds Outstanding under the Master Indenture, the
Second Supplement, the Lease Purchase Agreement or the First Amendment to the Lease Purchase
Agreement.
“Paying Agent” means the Trustee when acting in such capacity under the Indenture.
“Permitted Encumbrances” means:
(a)
with regard to the Project Sites or any portion thereof, such easements, encumbrances and
restrictions as are identified in Schedule B of title company’s Commitment for Title Insurance naming the
Trustee as insured and effective on the date of issuance of the Series 2011 Bonds;
(b)
any financing statements relating to the Master Indenture, the Second Supplement, the
Deed of Trust, the First Amendment to Deed of Trust, the Lease Purchase Agreement or the First
Supplemental Lease Purchase Agreement;
(c)
Impositions which are not then delinquent, or if then delinquent, are being contested in
accordance with the Lease Purchase Agreement and the First Supplemental Lease Purchase Agreement;
(d)
utility, access and other easements and rights-of-way, restrictions and exceptions,
including operating agreements or leases, which will not interfere with or impair any of which may be
necessary to the operation of the Leased Facilities;
(e)
any mechanic’s, laborer’s, materialmen’s, supplier’s or vendor’s lien or rights in respect
thereof if payment is not yet due under the contract in question or if such lien is being contested in
accordance with the Lease Purchase Agreement and the First Supplemental Lease Purchase Agreement;
(f)
the Deed of Trust and the First Amendment to Deed of Trust; and
(g)
the Lease Purchase Agreement and the First Supplemental Lease Purchase Agreement.
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“Permitted Investments” means for all purposes other than (a) investments in escrow accounts
and (b) investing and receiving credit for accrued and capitalized interest:
(a)
direct non-callable obligations of the United States of America and securities fully and
unconditionally guaranteed as to the timely payment of principal and interest by the United States of
America, provided, that the full faith and credit of the United States of America must be pledged to any
such direct obligation or guarantee (“Government Obligations”);
(b)
direct obligations of any state of the United States of America or any subdivision or
agency of the United States or of any state thereof whose unsecured, uninsured and unguaranteed general
obligation debt is rated, at the time of purchase, by two of the three rating agencies as follows: “A” or
better by Moody’s, “A” or better by S&P and “A” or better by Fitch, or any obligation fully and
unconditionally guaranteed by any state, subdivision or agency thereof whose unsecured, uninsured and
unguaranteed general obligation debt is rated, at the time of purchase, “A” or better by Moody’s, “A” or
better by S&P and “A” or better by Fitch;
(c)
federal funds, unsecured certificates of deposit, time deposits or bankers acceptances (in
each case having maturities of not more than 365 days) of any domestic bank including a branch office of
a foreign bank which branch office is located in the United States, which, at the time of purchase, has a
short-term “Bank Deposit” rating by two of the three rating agencies as follows: “P-1” by Moody’s, a
“Short-Term CD” rating of “A-1” or better by S&P and a “Short-Term CD” rating of “A-1” or better by
Fitch;
(d)
deposits of any bank (including the Trustee or any of its affiliates) or savings and loan
association which has combined capital, surplus and undivided profits of not less than $3 million,
provided such deposits are continuously and fully insured by the Bank Insurance Fund or the Savings
Association Insurance Fund of the Federal Deposit Insurance Corporation;
(e)
commercial paper which is rated at the time of purchase by two of the three rating
agencies as follows: in the single highest classification, “A-1” by S&P, “P-l” by Moody’s and “A-1” by
Fitch, and which matures not more than 270 days after the date of purchase;
(f)
investments in a money market fund rated by two of the three rating agencies as follows:
“AAAm” or “AAAm-G” or better by S&P, “AAA” as a long term or short term rating by Moody’s, and
“AAA” or “F-1+” by Fitch;
(g)
Supplement.
other forms of investments permitted by law and by the Master Indenture and Second
“Plans and Specifications” means the plans and specifications for the construction and
equipping of the Improvements any amendments and additions thereto, and any change orders thereto, as
approved in writing by the City, the Corporation and the Trustee.
“Project” means the improvements to the City’s potable water storage and distribution system
including, without limitation, the Project Sites and the Improvements.
“Project Sites” means the “Tower Site” and the “Pump Site” as legally described on Exhibit A
to the Master Indenture.
“Principal Payment Date” means, with respect to the Series 2011 Bonds, July 1 of each year as
long as any of the Series 2011 Bonds remain Outstanding beginning July 1, 2012.
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“Purchaser” means Edward D. Jones & Co., L.P., St. Louis, Missouri, as original purchaser of
the Series 2011 Bonds.
“Record Date” means with respect to any Interest Payment Date the first day (whether or not a
business day) of the calendar month in which such Interest Payment Date occurs.
“Redemption Date”, with respect to the Refunded Bonds, means October 17, 2011.
“Redemption Notice Information” means information in a written and dated notice from the
Trustee which (a) identifies the Bonds to be redeemed by the name of the issue (including the name of the
issuer and any series designation), CUSIP number, if any, date of issue, interest rate, maturity and any
other descriptive information the Trustee deems desirable to accurately identify the Bonds to be redeemed
and, if only a portion of the Bonds will be redeemed, the certificate numbers and the principal amount of
the Bonds to be redeemed, (b) identifies the date on which the notice is published and the Redemption
Date, (c) states the price at which the Bonds will be redeemed, (d) states that interest on the Bonds or the
portions of Bonds called for redemption will stop accruing from the Redemption Date if funds sufficient
for their redemption and available for that purpose are on deposit with the Trustee on the Redemption
Date, (e) states that payment for the Bonds will be made on the Redemption Date at the principal
corporate trust office of the Trustee during normal business hours upon the surrender of the Bonds to be
redeemed in whole or in part, and (f) identifies by name and telephone number a representative of the
Trustee who may be contacted for additional information.
“Refunded Bonds” means those Series 2005 Bonds Outstanding in the principal amount of
$5,795,000 identified in and called for payment and redemption pursuant to the Refunding Resolution.
“Refunding Ordinance” means the Ordinance of the City duly adopted by the Board of
Aldermen and approved by the Mayor of the City, which approves, among other things, the issuance, sale
and delivery of the Series 2011 Bonds by the Corporation in accordance with the Second Supplement and
the Master Indenture, the refunding and call for redemption of the Refunded Bonds, and the execution and
performance by the City of its obligations under the First Supplemental Lease Purchase Agreement.
“Refunding Resolution” means the Resolution adopted by the board of directors of the
Corporation, authorizing, among other things, the issuance, sale and delivery of the Series 2011 Bonds,
and the execution of certain documents related thereto in accordance with the Master Indenture and the
Second Supplement.
“Rentals” means those payments required to be made by the City pursuant to the Lease
Purchase Agreement.
“Rental Payment Dates” shall mean each date on which any Rentals or Additional Rentals are
due and payable by the terms of the Lease Purchase Agreement.
“S&P” means Standard & Poor’s Ratings Group, a division of McGraw-Hill, Inc., a corporation
organized and existing under the laws of the State of New York, its successors and their assigns, and, if
such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities
rating agency, “S&P” shall mean any other nationally recognized securities rating agency designated by
the Corporation, with the approval of the City, by notice to the Trustee and the City.
“Second Supplement” means the Second Supplemental Indenture of Trust dated as October 1,
2011 between the Corporation and the Trustee authorizing the issuance of the Series 2011 Bonds.
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“Series” means all of the Bonds delivered on original issuances in a simultaneous transaction and
identified pursuant to the Master Indenture or pursuant to any Supplemental Indenture authorizing the
issuance of such Bonds as a separate Series, and any Bonds thereafter delivered in lieu of or in
substitution for such Bonds pursuant to the Master Indenture, regardless of variations in maturity, interest
rate, or other provisions. If a Series of Bonds is sold in installments, Series shall mean all of the Bonds of
such installment.
“Series 2005 Bonds” means the $7,540,000 Wentzville Economic Development Council, Inc.,
Leasehold Revenue Bonds, Series 2005 (City of Wentzville, Missouri, Lessee).
“Series 2011 Bonds” means the Wentzville Economic Development Council, Inc., Leasehold
Revenue Refunding Bonds, Series 2011 (City of Wentzville, Missouri, Lessee), authenticated and
delivered pursuant to the Second Supplement and the Master Indenture.
“Series 2011 Bond Fund” means the fund by that name created in the Second Supplement.
“Series 2011 Debt Service Reserve Fund” means the fund by that name created in the Second
Supplement.
“Series 2011 Repayment Fund” means the fund by that name created in the Second
Supplement.
“State” means the State of Missouri.
“Stated Maturity” means, when used with respect to any Bond, the date specified in the Master
Indenture or in any Supplemental Indenture authorizing Additional Bonds as the fixed date on which the
principal of such Bond is due and payable.
“Supplemental Indenture” means any indenture supplemental or amendatory to the Master
Indenture (other than the Second Supplement) entered into by the Corporation and the Trustee pursuant to
the Master Indenture.
“Supplemental Lease Purchase Agreement” means any lease purchase agreement
supplemental or amendatory to the Lease Purchase Agreement (other than the First Supplemental Lease
Purchase Agreement) entered into by the Corporation and the City pursuant to the Lease Purchase
Agreement and the Master Indenture.
“Tax Certificate” means the non-arbitrage certificate and any exhibit attached thereto relating to
the Series 2011 Bonds executed by the Corporation on the Closing Date.
“Term” or “Lease Term” means the term of the Lease Purchase Agreement.
“Trust Estate” means the Trust Estate described in the granting clauses of the Master Indenture.
“Trustee” means UMB Bank, N.A., a national banking association duly organized and existing
and authorized under the laws of the United States to accept and execute trusts of the character herein set
out and its successor or successors and any other corporation which may be substituted in its place
pursuant to and at the time serving as Trustee under the Master Indenture and the Second Supplement.
“United States Government Obligations” means bonds, notes, certificates of indebtedness,
treasury bills, or other securities constituting direct obligations of the United States of America or
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obligations the payment of the principal of and interest of which are fully and unconditionally guaranteed
by the United States of America.
“Value” means the value, determined on each Interest Payment Date, of Permitted Investments
and/or Defeasance Obligations (together, “Investments”) which shall be calculated as follows:
(a)
as to Investments the bid and asked prices of which are published on a regular basis in
The Wall Street Journal (or, if not there, then in The New York Times or other national publication
acceptable to the Trustee): the average of the bid and asked prices for such investments so published at or
most recently prior to such time of determination;
(b)
as to Investments the bid and asked prices of which are not published on a regular basis
in The Wall Street Journal (if not there, then in The New York Times or other national publication
acceptable to the Trustee): the average bid price at such time of determination for such investments by
any two nationally recognized government securities dealers (selected by the Trustee in its absolute
discretion) at the time making a market in such investments or the bid price published by a nationally
recognized pricing service;
(c)
as to certificates of deposit and bankers acceptances: the face amount thereof, plus
accrued interest; and
(d)
as to any Investment not specified above: the value thereof established by prior
agreement between the Corporation and the Trustee.
“Written Request” with reference to the Corporation means a request in writing signed by the
Corporation Representative and with reference to the City means a request in writing signed by the City
Representative, or any other officers designated by the Corporation or the City, as the case may be, to
sign such Written Requests.
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APPENDIX C
SUMMARY OF THE DOCUMENTS
THE MASTER INDENTURE
The following is a summary of certain provisions and covenants contained in the Master Indenture (to the
extent they relate to the Series 2011 Bonds). This summary does not purport to be a complete statement
of the terms of the Master Indenture and reference is made to the Master Indenture in its entirety for a
complete recital of its terms and provisions. Capitalized terms used but not defined in this Appendix C
shall have the meanings given them in Appendix B, Definitions of Words and Terms.
Assignment of Trust Estate
Pursuant to the Master Indenture, the Corporation will, subject to the Lease Purchase Agreement,
as amended and supplemented by the First Supplemental Lease Purchase Agreement (together, the “Lease
Purchase Agreement”), and the Deed of Trust, as amended by the First Amendment to Deed of Trust
(together, the “Deed of Trust”), assign to the Trustee for the benefit of the Bondowners the Corporation’s
interest in: (1) All right, title and interest of the Corporation (including the right to enforce any of the
terms thereof) in, to and under (a) the Lease Purchase Agreement, and all Rentals and Additional Rentals
and certain other revenues, moneys and receipts pursuant to the Lease Purchase Agreement; (b) the Deed
of Trust; (c) all financing statements or other instruments or documents evidencing, securing or otherwise
relating to the Lease Purchase Agreement and the Deed of Trust; and (d) any and all real and personal
property interests pursuant to the Lease Purchase Agreement and the Deed of Trust; and (2) All moneys
and securities from time to time held by the Trustee under the Master Indenture, and any and all other
real or personal property of every kind and nature from time to time hereafter, by delivery or by writing of
any kind, conveyed, pledged, assigned or transferred as and for additional security hereunder by the
Corporation or by anyone on its behalf, or with its written consent, to the Trustee, which is hereby
authorized to receive any and all such property at any and all times and to hold and apply the same subject
to the terms of the Master Indenture.
Nature of Obligations; Additional Security
The Series 2011 Bonds and the interest thereon shall be special obligations of the Corporation
payable solely out of the Rentals and Additional Rentals and other revenues, moneys and receipts derived
by the Corporation pursuant to the Lease Purchase Agreement and are secured by a pledge and
assignment of the Trust Estate to the Trustee in favor of the Bondowners, as provided in the Master
Indenture and no incorporator, member, agent, employee director or officer of the Corporation or of the
City shall at any time or under any circumstances be individually or personally liable under the Master
Indenture or the Lease Purchase Agreement for anything done or omitted to be done by the Corporation
thereunder. The Series 2011 Bonds and the interest thereon shall not be a debt of the City or the State and
the City and the State shall not be liable thereon, and the Series 2011 Bonds shall not constitute an
indebtedness within the meaning of any constitutional or statutory debt limitation or restriction.
The Series 2011 Bonds are further secured by the Deed of Trust which secures future advances
and future obligations under section 443.055 of the Revised Statutes of Missouri, as amended. Upon
certain Events of Default, the Mortgage Trustee shall, if directed by the Trustee, foreclose on the Deed of
Trust and apply the proceeds as directed in the Deed of Trust.
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General Provisions for Issuance of Bonds
Prior to or simultaneously with the authentication and delivery of the Series 2011 Bonds, the
following items, when necessary, shall be filed with the Trustee, except as provided in clause (vi) of this
paragraph:
(i)
(a) A copy of the Master Indenture and one original, executed Second
Supplement, (b) one original, executed Refunding Resolution certified by the Corporation Representative,
(c) a copy of the Deed of Trust and one original, executed First Amendment to Deed of Trust, and (d) a
copy of the Lease Purchase Agreement and one original, executed First Supplemental Lease Purchase
Agreement;
(ii)
A copy of the Refunding Ordinance certified by the City Representative;
(iii)
An opinion of Counsel to the Corporation to the effect that (A) the Corporation
has the right and power to execute and deliver the Master Indenture and the Second Supplement, and the
same have been duly and lawfully executed and delivered by the Corporation and are valid and binding
upon the Corporation in accordance with their terms; (B) the Master Indenture creates a valid pledge of
the Trust Estate under the Master Indenture; and (C) the Bonds have been duly and validly authorized and
issued in accordance with the Master Indenture and the Second Supplement and are valid and binding
obligations of the Corporation, enforceable in accordance with their terms and entitled to the benefits of
the Master Indenture; provided, that Counsel may qualify such opinion insofar as the same relates to
enforceability with respect to bankruptcy, insolvency, moratorium, reorganization or other laws affecting
creditors’ rights generally (ii) general principles of equity, and (iii) denial or limitation by a Missouri or
federal court of specific clauses or provisions in the Lease Purchase Agreement, the Deed of Trust, the
Master Indenture, and the Second Supplement, none of which would preclude the practical realization of
the benefits and security intended to be provided by the aforementioned documents;
(iv)
A request and authorization to the Trustee, on behalf of the Corporation,
executed by a Corporation Representative, to authenticate the Series 2011 Bonds and to deliver said
Series 2011 Bonds to the purchasers therein identified upon payment to the Trustee, for the account of the
Corporation, of the purchase price thereof. The Trustee shall be entitled to conclusively rely upon such
request and authorization as to the names of the purchasers and the amount of such purchase price;
(v)
An opinion of Bond Counsel to the effect that the issuance of the Series 2011
Bonds will not result in the interest on Bonds then Outstanding becoming includable in gross income for
purposes of federal income taxation; and
(vi)
Such further documents, moneys and securities which are required by the
provisions of the Second Supplement.
After the issuance of the Series 2011 Bonds, no Bonds of such Series shall be issued except in
lieu of or in substitution for other Bonds of such Series pursuant to the Master Indenture.
Additional Bonds
Additional Bonds may be issued under the Master Indenture at any time and from time to time for
the purpose of providing funds (i) to pay the costs of completing the Improvements, such costs to be
evidenced by a certificate signed by the City Representative and the Corporation Representative; and (ii)
for refunding all or any part of the Bonds then Outstanding of any Series, including the payment of any
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redemption premium thereon and interest to accrue to the designated Redemption Date and any expenses
in connection with such refunding.
Before any Additional Bonds shall be issued the Corporation shall adopt a resolution authorizing
the issuance of such Additional Bonds, fixing the amount and terms thereof and describing the purpose or
purposes for which such Additional Bonds are being issued, authorizing the Corporation to enter into a
Supplemental Indenture for the purpose of issuing such Additional Bonds, and, if necessary, authorizing
the Corporation to enter into a Supplemental Lease Purchase Agreement or other security instruments, to
provide for the use of the proceeds of such Additional Bonds and, if issued for purposes of refunding all
or any part of the Bonds then Outstanding of any Series, for payments at least sufficient to pay the
principal of, and redemption premium, if any, and interest on such Bonds then Outstanding as the same
become due and for such other matters as are appropriate because of the issuance of such Additional
Bonds.
Such Additional Bonds shall have the same designation as the Bonds, except for an identifying
series letter or date, and, in the case of Additional Bonds issued solely for the purposes of refunding all or
any part of the Bonds then Outstanding, except for the insertion of the word “Refunding,” where
appropriate. All such Additional Bonds shall be numbered, shall bear interest at such rate or rates not
exceeding the maximum rate then permitted by law, shall be stated to mature and shall be redeemable at
such times and prices, all as may be provided by the Supplemental Indenture authorizing such Additional
Bonds. Except as to any difference in the date, the Stated Maturities, the rate or rates of interest or the
provisions for redemption, such Additional Bonds shall be entitled to the same benefit and security of the
Master Indenture as the Bonds.
Nothing in the Master Indenture shall prohibit the Corporation from issuing bonds for any
permissible purpose under separate indentures of trust, if secured by property other than the Trust Estate.
Investments
Moneys held in the funds or accounts created under the Master Indenture and the Second
Supplement shall, pursuant to written direction of the City, signed by the Finance Director or his designee
and in accordance with the Tax Certificate be invested and reinvested by the Trustee in Permitted
Investments which mature or are subject to redemption by the Owner prior to the date such funds will be
needed. Any such Permitted Investments shall be held by or under the control of the Trustee and shall be
deemed at all times a part of the fund or account in which such moneys are originally held, and the
interest accruing thereon and any profit realized from such Permitted Investments shall be credited to
such fund or account or as otherwise any loss resulting from such Permitted Investments shall be charged
to such fund or account. The Trustee shall sell and reduce to cash a sufficient amount of such Permitted
Investments whenever the cash balance in such fund or account is insufficient for the purposes of such
fund or account.
The Trustee may make any and all investments permitted under the Master Indenture through its
own bond department or short-term investment department at the direction of the City Representative.
Events of Default
The Master Indenture deems each of the following as an Event of Default:
(a)
any Bond;
Default by the Corporation in the due and punctual payment of any interest on
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(b)
Default by the Corporation in the due and punctual payment of the principal of or
redemption premium, if any, on any Bond Outstanding, whether at the Stated Maturity or other
Maturity thereof, or upon proceedings for redemption thereof;
(c)
Default in the performance or observance of any other of the covenants,
agreements or conditions on the part of the Corporation contained in the Master Indenture or in
the Bonds Outstanding or in any other document or instrument that secures or otherwise relates to
the debt and obligations thereby secured, and the continuance thereof for a period of sixty (60)
days after written notice given to the Corporation and the City by the Trustee or to the Trustee,
the City, and the Corporation by the Owners of not less than 25% in aggregate principal amount
of Bonds then Outstanding; provided, however, if the failure stated in the notice cannot be
corrected within said 60-day period, the Trustee may consent in writing to an extension of such
time prior to its expiration and the Trustee will not unreasonably withhold its consent to such an
extension if corrective action is instituted by the Corporation or the City within the 60-day period
and diligently pursued to completion and if such consent, in its sole judgment, does not materially
adversely affect the interests of the Bondowners. Upon receipt of notice of any Event of Default
under the Master Indenture, the City shall have the rights specified in the Master Indenture; or
(d)
An Event of Default under the Lease Purchase Agreement.
Notice of any Event of Default shall be given to the Corporation and to the City by the Trustee
within thirty (30) days of the Trustee’s actual knowledge thereof and the City, upon receipt of such
notice, shall have the rights specified in the Master Indenture.
Acceleration of Maturity in the Event of Default
If an Event of Default shall have occurred and be continuing, the Trustee may, and upon the
written request of the Owners of not less than a majority of Bonds then Outstanding, shall, by notice in
writing delivered to the Corporation and the City, declare the principal of all Bonds then Outstanding and
the interest accrued thereof immediately due and payable, and such principal and interest shall thereupon
become and be immediately due and payable. If the payment of the Bonds then Outstanding is
accelerated under the Master Indenture, each Bond shall be payable in the principal amount thereof and
accrued interest thereon.
Surrender of Possession of Trust Estate; Rights and Duties of Trustee in Possession
If an Event of Default shall have occurred and be continuing, the Corporation, upon demand of
the Trustee, shall forthwith surrender the possession of, and it shall be lawful for the Trustee, by such
officer or agent as it may appoint, to take possession of all or any part of the Trust Estate, together with
the books, papers and accounts of the Corporation pertaining thereto, and including the rights and the
position of the Corporation under the Lease Purchase Agreement and to collect, receive and sequester the
Rentals and other revenues, moneys and receipts derived under the Lease Purchase Agreement, and out of
the same and any moneys received from any receiver of any part thereof pay, and set up proper reserves
for the payment of all proper costs and expenses of so taking, holding and managing the same, including
(i) reasonable compensation to the Trustee, its agents and Counsel and (ii) any charges of the Trustee
hereunder, and the Trustee shall apply the remainder of the moneys so received in accordance with the
Master Indenture. The collection of such Rentals, revenues and other receipts, or the application thereof
as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done
in response to such default or pursuant to notice of default. Whenever all that is due upon the Bonds
Outstanding shall have been paid and all defaults cured, the Trustee shall surrender possession of the
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Trust Estate to the Corporation, its successors or assigns, the same rights, however, to exist upon any
subsequent Event of Default.
Exercise of Remedies by the Trustee
Upon the occurrence of an Event of Default, the Trustee may pursue any available remedy at law
or equity by suit, action, mandamus or other proceeding to enforce the payment of the principal of and
interest on the Bonds then Outstanding, and enforce and compel the performance of the duties and
obligations of the Corporation as herein set forth or to enforce or realize upon any of the rights, powers,
liens or interests granted hereby to the Trustee. Upon the occurrence of an Event of Default, the Trustee
may exercise any of the rights and remedies of a secured party under the Missouri Uniform Commercial
Code or other applicable laws and require the Corporation to assemble any collateral covered by the
Master Indenture and make it available to the Trustee at a place to be designated by the Trustee which is
reasonably convenient to both parties.
Exercise of Rights and Powers
If an Event of Default shall have occurred and be continuing, and if requested to do so by the
Owners of 25% in aggregate principal amount of Bonds then Outstanding, the Trustee shall be obligated
to exercise such one or more of the rights and powers conferred by the Master Indenture as the Trustee
shall deem most expedient in the interests of the Bondowners.
All rights of action under the Master Indenture or under any of the Bonds may be enforced by the
Trustee without the possession of any of the Bonds or the production thereof in any trial or other
proceedings relating thereto, and any such suit or proceeding instituted by the Trustee shall be brought in
its name as Trustee without the necessity of joining as plaintiffs or defendants any Bondowner, and any
recovery or judgment shall, subject to provisions of the Master Indenture, be for the equal benefit of all
the Registered Owners of the Outstanding Bonds.
Limitation on Exercise of Remedies by Bondowners
No Bondowner shall have any right to institute any suit, action or proceeding in equity or at law
for the enforcement of the Master Indenture or for the execution of any trust thereunder or for the
appointment of a receiver or any other remedy unless:
(i)
a default has occurred of which the Trustee has been notified as provided in the
Master Indenture or of which the Trustee is deemed to have notice;
(ii)
such default shall have become an Event of Default;
(iii)
the Owners of 25% in aggregate principal amount of Bonds then Outstanding
shall have made written request to the Trustee, and shall have offered the Trustee reasonable opportunity
either to proceed to exercise the powers thereinbefore granted or to institute such action, suit or
proceeding in its own name; and
(iv)
the Trustee shall thereafter fail or refuse to exercise the powers therein granted or
to institute such action, suit or proceeding in its own name; and such notification, request and provision of
indemnity are declared in every case, at the option of the Trustee, to be conditions precedent to the
execution of the powers and trusts of the Master Indenture, and to any action or cause of action for the
enforcement of the Master Indenture, or for the appointment of a receiver or for any other remedy
thereunder, it being understood and intended that no one or more Bondowners shall have any right in any
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manner whatsoever to affect, disturb or prejudice the Master Indenture by its, his or their action or to
enforce any right thereunder except in the manner therein provided, and that all proceedings at law or in
equity shall be instituted, had and maintained in the manner therein provided and for the equal benefit of
the Registered Owners of all Bonds then Outstanding. Nothing in the Master Indenture contained shall,
however, affect or impair the right of any Bondowner to payment of the principal of, and redemption
premium, if any, and interest on any Bond at and after its Maturity or the obligation of the Corporation to
pay the principal of, and redemption premium, if any, and interest on, each of the Bonds to the respective
Registered Owners thereof at the time, place, from the source and in the manner herein and in such Bond
expressed.
Right of Bondowners to Direct Proceedings
Anything in the Master Indenture to the contrary notwithstanding, the Owners of a majority in
aggregate principal amount of Bonds then Outstanding, shall have the right, at any time, by an instrument
or instruments in writing executed and delivered to the Trustee, to direct the time, method and place of
conducting all proceedings to be taken in connection with the enforcement of the Master Indenture, or for
the appointment of a receiver or any other proceedings thereunder; provided that such direction shall not
be otherwise than in accordance with the provisions of law and of the Master Indenture, and, provided,
further, that the Trustee shall have the right to decline to follow any such direction if the Trustee in good
faith shall determine that the proceedings directed would involve the Trustee in personal liability.
Application of Moneys in Event of Default
Upon an Event of Default, all moneys received by the Trustee pursuant to the Lease Purchase
Agreement or pursuant to any right given or action taken under the Master Indenture or the Second
Supplement, shall, after payment of the (i) cost and expenses of the proceedings resulting in the collection
of such moneys and (ii) of the expenses, liabilities and advances incurred or made by the Trustee, be
deposited in the Series 2011 Bond Fund and any other Bond Fund created for the payment of Bonds and
all moneys so deposited in the Series 2011 Bond Fund or such other Bond Fund shall be applied as
follows:
(a)
If the principal of all the Bonds shall not have become due or shall not have been
declared due and payable, all such moneys shall be applied:
First - To the payment to the persons entitled thereto of all installments of interest
then due and payable on the Bonds, in the order in which such installments of interest
became due and payable, and, if the amount available shall not be sufficient to pay in full
any particular installment, then to the payment ratably, according to the amounts due on
such installment, to the persons entitled thereto, without any discrimination or privilege;
and
Second - To the payment to the persons entitled thereto of the unpaid principal of
and redemption premium, if any, on any of the Bonds which shall have become due and
payable (other than Bonds called for redemption for the payment of which moneys are
held pursuant to the Master Indenture), in the order of their due dates, with interest on
such Bonds from the respective dates upon which they became due and payable, and, if
the amount available shall not be sufficient to pay in full all Bonds due on any particular
date, together with such interest, then to the payment ratably, according to the amount of
principal and redemption premium, if any, due on such date, to the persons entitled
thereto without any discrimination or privilege.
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(b)
If the principal of all the Bonds shall have become due or shall have been
declared due and payable, all such moneys shall be applied:
First - To the payment to the persons entitled thereto of all installments of interest
then due and payable on the Bonds, in the order in which such installments of interest
became due and payable and, if the amount available shall not be sufficient to pay such
amounts in full, then to the payment ratably, according to the amounts due, to the persons
entitled thereto, without any discrimination or privilege; and
Second - To the payment to the persons entitled thereto of unpaid principal of
and redemption premium, if any, then due and unpaid on all of the Bonds, without
preference or priority of principal or premium of any Bond over principal or premium of
any other Bond, ratably, according to the amounts due respectively for principal and
redemption premium, if any, to the persons entitled thereto, without any discrimination or
privilege.
(c)
If the principal of all the Bonds shall have been declared due and payable, and if
such declaration shall thereafter have been rescinded and annulled under the Master Indenture, in
the event that the principal of all the Bonds shall later become due or be declared due and
payable, the moneys shall be applied in accordance with subparagraph (a) above.
Whenever moneys are to be so applied, such moneys shall be applied at such times and from time
to time as the Trustee shall determine, having due regard to the amount of such moneys available and
which may become available for such application in the future. Whenever the Trustee shall apply such
moneys, the Trustee shall fix the date upon which such application is to be made and upon such date
interest on the amounts of principal to be paid on such dates shall cease to accrue. The Trustee shall give
such notice as the Trustee may deem appropriate of the deposit with the Trustee of any such moneys and
of the fixing of any such date and shall not be required to make payment to the Owner of any Bond until
such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid.
Remedies Cumulative
No remedy conferred by the Master Indenture upon or reserved to the Trustee or to the
Bondowners is intended to be exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in addition to any other remedy given to the Trustee or to the Bondowners
hereunder or now or hereafter existing at law or in equity or by statute.
Opportunity of City to Purchase Corporation’s Interest in Event of Default and to Cure Defaults
(a)
Upon receipt of notice by the City of an Event of Default, the Corporation has, in
the Lease Purchase Agreement, granted the City an option to purchase the Corporation’s interest
in the Leased Facilities under the Lease Purchase Agreement.
(b)
Upon receipt of notice by the City of an Event of Default, the Corporation in the
Master Indenture grants the City full authority, on account of the Corporation, to perform any
covenant, agreement, or obligation, the nonperformance of which is alleged in said notice to
constitute a default, in the name and stead of the Corporation, with full power to do any and all
things and acts to the same extent that the Corporation could do and perform any such things and
acts in order to remedy such default.
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Supplemental Indentures
Supplemental Indentures Not Requiring Consent of Bondowners. Subject to the Master
Indenture, the Corporation with the approval of the Board of Aldermen and the Trustee may from time to
time, without the consent of or notice to any of the Bondowners, enter into such Supplemental Indenture
or Supplemental Indentures as shall not adversely affect the interests of the Bondowners, for any one or
more of the following purposes:
(a)
To cure any ambiguity or formal defect or omission in the Master Indenture or to
correct or supplement any provision of the Master Indenture which may be inconsistent with any
other provision;
(b)
To grant to or confer upon the Trustee for the benefit of the Bondowners any
additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon
the Bondowners or the Trustee or either of them;
(c)
To subject to the Master Indenture additional revenues, properties or collateral;
(d)
To issue the Series 2011 Bonds;
(e)
To issue Additional Bonds;
(f)
To make any other change which in the sole determination of the Trustee does
not materially adversely affect the Bondowners; in making such determination the Trustee may
rely on the opinion of such Counsel as the Trustee may select; and
(g)
To evidence the appointment of a separate trustee or a co-trustee or the
succession of a new Trustee.
Supplemental Indentures Requiring Consent of Bondowners. Exclusive of Supplemental
Indentures identified in the foregoing paragraphs as not requiring consent of the Bondowners, the Owners
of not less than a majority in aggregate principal amount of Bonds at the time Outstanding shall be
required to consent to and approve the execution by the Corporation and the Trustee of such other
Supplemental Indenture or Supplemental Indentures as shall be deemed necessary and desirable by the
Corporation and the City for the purpose of modifying, amending, adding to or rescinding any of the
terms or provisions contained in the Master Indenture or in any Supplemental Indenture; provided that,
the consent of all the Owners of Bonds then Outstanding shall be required for (a) an extension of the
maturity of the principal of or the interest on any Bond, or (b) a reduction in the principal amount of any
Bond or the rate of interest thereon, or (c) a privilege or priority of any Bond or Bonds over any other
Bond or Bonds, or (d) a reduction in the aggregate principal amount of Bonds, the Owners of which are
required to consent to any such Supplemental Indenture.
If at any time the Corporation shall request, with the consent of the City, the Trustee to enter into
any such Supplemental Indenture, the Trustee shall cause notice of the proposed execution of such
Supplemental Indenture to be mailed to each Bondowner at his address as shown by the Bond Register.
Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that
copies thereof are on file at the principal corporate trust office of the Trustee for inspection by all
Bondowners. If within sixty (60) days or such longer period as shall be prescribed by the Corporation
following the mailing of such notice, the Owners of not less than the requisite aggregate principal amount
of the Bonds and Outstanding at the time of the execution of any such Supplemental Indenture shall have
consented to and approved the execution thereof as provided in the master Indenture, no Owner of any
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Bond shall have any right to object to any of the terms and provisions contained therein, of the operation
thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the
Trustee or the Corporation from executing the same or from taking any action pursuant to the provisions
thereof.
City’s Consent to Supplemental Indentures
Any Supplemental Indenture that affects any rights or obligations of the City shall not become
effective unless and until the City shall have consented in writing to the execution and delivery of such
Supplemental Indenture; provided that, receipt by the Trustee of a Supplemental Lease Purchase
Agreement executed by the City in connection with the issuance of Additional Bonds shall be deemed to
be the consent of the City to the execution of a Supplemental Indenture. In this regard, the Trustee shall
cause notice of the proposed execution and delivery of any such Supplemental Indenture (other than a
Supplemental Indenture proposed to be executed and delivered pursuant to the issuance of Additional
Bonds) together with a copy of the proposed Supplemental Indenture to be mailed to the City at least
ninety (90) days prior to the proposed date of execution and delivery of any such Supplemental Indenture.
Notwithstanding the provisions of the immediately preceding sentence, the City’s right to consent to a
Supplemental Indenture shall terminate for so long as an Event of Default has occurred and is continuing
the Lease Purchase Agreement.
Amendment of the Lease Purchase Agreement
Amendments to Lease Purchase Agreement Not Requiring Consent of Bondowners. The
Corporation and the Trustee shall, without the consent of or notice to the Bondowners, consent to any
amendment to the Lease Purchase Agreement as may be required (i) by the Lease Purchase Agreement or
the Master Indenture, (ii) for the purpose of curing any ambiguity or formal defect or omission, (iii) in
connection with the issuance of Additional Bonds (including the Series 2011 Bonds), or (iv) in
connection with any other change therein which, in the sole determination of the Trustee, does not
materially adversely affect the interests of the Trustee or the Bondowners; in making such determination
the Trustee may rely on the opinion of such Counsel as the Trustee may select.
Amendments to Lease Purchase Agreement Requiring Consent of Bondowners. Except for
amendments described in the immediately preceding paragraph, neither the Corporation nor the Trustee
shall consent to any other amendment, change, or modification of the Lease Purchase Agreement without
the mailing of notice and the obtaining of the written approval or consent of the Owners of not less than a
majority in aggregate principal amount of the Bonds at the time Outstanding given and obtained as
provided in the Master Indenture; provided, that, the consent of all the Owners of Bonds shall be required
for (a) the creation of any lien ranking superior to or on a parity with the lien of the Master Indenture,
unless otherwise permitted, or (b) a reduction in the aggregate principal amount of Bonds, the Owners of
which are required to consent to any amendment to the Lease Purchase Agreement. If at any time the
Corporation and the City shall request the consent of the Trustee to any such amendment, change or
modification, the Trustee shall cause notice of such proposed amendment, change or modification to be
mailed in the same manner with respect to Supplemental Indentures. Such notice shall briefly set forth
the nature of such proposed amendment, change or modification and shall state that copies of the same are
on file at the principal corporate trust office of the Trustee for inspection by all Bondowners.
Satisfaction and Discharge of the Master Indenture
When all Bonds are deemed to be paid as provided in the Master Indenture and the Second
Supplement, and provision shall also be made for paying all other sums payable thereunder, including the
fees and expenses of the Trustee and the Paying Agent to the date of retirement of the Bonds, then the
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right, title and interest of the Trustee in respect thereof shall thereupon cease, terminate and be void, and
thereupon the Trustee shall cancel, discharge and release the lien of the Master Indenture and shall
execute, acknowledge and deliver to the Corporation such instruments of satisfaction and discharge or
release as shall be requisite to evidence such release and the satisfaction and discharge of the lien of the
Master Indenture, and shall assign and deliver to the Corporation any property and revenues at the time
subject to the Master Indenture that may then be in its possession, except amounts in the Bond Fund and
the Series 2011 Bond Fund as established by the Second Supplement required to be paid to the City and
except funds or securities in which such funds are invested by the Trustee for the payment of the principal
of, and redemption premium, if any, and interest on, the Bonds then Outstanding.
The Corporation in the Master Indenture is authorized to accept a certificate by the Trustee that
the whole amount of the principal, redemption premium, if any, and interest so due and payable upon all
of the Bonds then Outstanding has been paid or such payment provided for in accordance with the Master
Indenture as evidence of satisfaction of the Master Indenture and Second Supplement, and upon receipt
thereto shall cancel and erase the inscription of the Master Indenture from its records.
Bonds Deemed to be Paid
Bonds shall be deemed to be paid when payment of the principal of and the applicable
redemption premium, if any, on such Bonds, plus interest thereon to the due date thereof (whether such
due date be by reason of maturity or upon redemption as provided in the Master Indenture, or otherwise),
either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall
have been provided for by depositing with the Trustee, in trust and irrevocably set aside exclusively for
such payment (a) moneys sufficient to make such payment, or (b) Defeasance Obligations maturing as to
principal and interest in such amount and at such times as will insure the availability of sufficient moneys
to make such payment, provided, however, with respect to any deposit referred to in this clause (ii), the
Trustee shall have received a verification report of a nationally recognized independent certified public
accounting firm as to the adequacy of the escrow to fully pay the Bonds deemed to be paid and an opinion
of Bond Counsel that the provision for such payment does not impair the tax-exempt status of the Bonds.
At such time as a Bond shall be deemed to be paid hereunder, as aforesaid, such Bond shall no longer be
secured by or entitled to the benefits of the Master Indenture, except for the purposes of any such
payment from such moneys or Defeasance Obligations.
Notwithstanding the foregoing, in the case of Bonds which by their terms may be redeemed prior
to the Stated Maturities thereof, no deposit under clause (ii) of the immediately preceding paragraph shall
be deemed a payment of such Bonds as aforesaid until, as to all such Bonds which are to be redeemed
prior to their respective Stated Maturities, proper notice of such redemption shall have been given or
irrevocable instructions shall have been given to the Trustee to give such notice.
Notwithstanding any other provision of the Master Indenture, all moneys or Defeasance
Obligations set aside and held in trust for the payment of Bonds (including redemption premium thereon,
if any) shall be applied to and used solely for the payment of the particular Bonds (including redemption
premium thereon, if any) with respect to which such moneys and Defeasance Obligations have been so set
aside in trust.
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THE SECOND SUPPLEMENT
The following is a summary of certain provisions and covenants contained in the Second Supplement (to
the extent they relate to the Series 2011 Bonds). This summary does not purport to be a complete
statement of the terms of the Second Supplement and reference is made to the Second Supplement in its
entirety for a complete recital of its terms and provisions.
Authorization, Principal Amount and Series Designation
Pursuant to the provisions of the Master Indenture and the Second Supplement, a Series of Bonds
entitled to the benefit, protection and security of the Master Indenture is authorized in the aggregate
principal amount of $6,000,000.* Such Series 2011 Bonds shall be designated as, and shall be
distinguished from the Bonds of all other Series by the title “Wentzville Economic Development Council,
Inc., Leasehold Revenue Refunding Bonds, Series 2011 (City of Wentzville, Missouri, Lessee).” The
Series 2011 Bonds are issuable in denominations of $5,000 or integral multiples thereof.
Execution and Delivery of Series 2011 Bonds
The President or any Vice President and the Secretary or any Assistant Secretary of the
Corporation are authorized and directed to execute the Series 2011 Bonds in the manner provided in the
Master Indenture and the Second Supplement and to cause said Series 2011 Bonds to be authenticated by
the Trustee. The President or any Vice President of the Corporation and the Secretary or any Assistant
Secretary of the Corporation are authorized and directed to prepare and execute such closing documents
and instruments as they deem necessary or desirable and to deliver the same to the Purchaser of the Series
2011 Bonds. Upon execution and authentication of the Series 2011 Bonds, such Series 2011 Bonds shall
be delivered to or upon the order of the Purchaser upon payment of the purchase price for the Series 2011
Bonds.
Creation and Ratification of Funds and Accounts
The creation of funds and accounts established by the Master Indenture are ratified and
reaffirmed by the Second Supplement. The Second Supplement additionally creates and orders to be
established in the custody of the Trustee the following special trust funds and accounts to be administered
as provided in the Master Indenture and the Second Supplement:
(a)
within the Costs of Issuance Fund created by the Master Indenture, a distinct
account to be designated as “the Series 2011 Account;”
(b)
the “Wentzville Economic Development Council, Inc., Leasehold Revenue
Refunding Bonds, Series 2011 Bond Fund” (the “Series 2011 Bond Fund”);
(c)
the “Wentzville Economic Development Council, Inc., Leasehold Revenue
Refunding Bonds, Series 2011 Debt Service Reserve Fund” (the “Series 2011 Debt Service
Reserve Fund”); and
(d)
the “Wentzville Economic Development Council, Inc., Leasehold Revenue
Refunding Bonds, Series 2011 Refunded Bonds Repayment Fund” (the “Series 2011 Repayment
Fund”).
* Preliminary, subject to change.
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Moneys on deposit in the Series 2011 Repayment Fund shall be used and applied by the Trustee
for the sole purpose of paying, redeeming and defeasing the Refunded Bonds at a redemption price equal
to 100% of the principal amount thereof plus accrued interest through the Redemption Date.
Application of Funds in the Series 2011 Bond Fund
The Trustee shall deposit into the Series 2011 Bond Fund (i) accrued interest, if any, received in
connection with the sale of, and allocable to, the Series 2011 Bonds; (ii) all amounts to be deposited in the
Series 2011 Bond Fund pursuant to the Lease Purchase Agreement corresponding to the payments of
principal of and interest on the Series 2011 Bonds; (iii) all interest and other income derived from
investments of funds on deposit in the Series 2011 Bond Fund; and (iv) all other moneys received by the
Trustee which the Trustee is directed to deposit in the Series 2011 Bond Fund pursuant to the Second
Supplement.
The Trustee shall notify the City in writing not later than each June 1 and December 1 (or the
next succeeding Business Day in each instance if such dates shall not be Business Days) of the moneys on
deposit and available in the Series 2011 Bond Fund to pay on the next succeeding due date principal of
and interest on the Series 2011 Bonds and, taking in account investment earnings in the Series 2011 Bond
Fund, shall specify in such notice the amount, if any, the City is obligated to pay to the Trustee for credit
to the Corporation such that there will be sufficient funds to pay on the applicable Interest Payment Date
principal of and interest on the Series 2011 Bonds. Except as otherwise provided in the Master Indenture,
funds deposited in the Series 2011 Bond Fund shall be used solely to pay the principal of and the interest
on the Series 2011 Bonds. The Trustee shall apply available monies to the payment of the principal of
and interest on the Series 2011 Bonds in the following order: first, investment earnings pursuant to the
preceding paragraph and second, if necessary, moneys appropriated by the City.
THE LEASE PURCHASE AGREEMENT
The following is a summary of certain provisions contained in the Lease Purchase Agreement (to the
extent they relate to the Series 2011 Bonds). This summary does not purport to be a complete statement
of the terms of the Lease Purchase Agreement and reference is made to the Lease Purchase Agreement in
its entirety for a complete recital of its terms and provisions.
Granting of Leasehold; After Acquired Property and Improvements
The Corporation rents and leases the Leased Facilities, subject to Permitted Encumbrances, unto
the City and the City rents and leases from the Corporation for the Rentals and Additional Rentals and
subject to the terms and conditions set forth in the Lease Purchase Agreement the Leased Facilities,
subject to Permitted Encumbrances, together with all acquisitions, improvements and installations in
respect of the Leased Facilities at that time or thereafter acquired, constructed or installed by the City or
by the Corporation, subject to all terms, covenants, and provisions contained in the lease Purchase
Agreement, without further action by either party (the “Leasehold”); provided, however, that each party
hereto shall, upon the request of the other party or of the Trustee, execute such documents or take such
actions as shall be deemed necessary by the other party or by the Trustee, as applicable to further
evidence or confirm the lease of the premises hereunder.
The City agrees to execute and deliver to the Trustee for the benefit of the Bondowners, upon the
Trustee’s request, any financing statements, as well as extensions, renewals and amendments thereof, in
such form as the Trustee may require to perfect a security interest with respect to all personal property
and fixtures constituting a part of the Leased Facilities. The City shall pay all costs of filing such
financing statements as well as any extensions, renewals, amendments and releases thereof, and shall pay
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all reasonable costs and expenses of any record searches for financing statements which the Trustee may
reasonably require.
Term of Lease Purchase Agreement; Termination; Annual Appropriation Required
The Term of the Lease Purchase Agreement (the “Term”) commenced as of July 1, 2005 and
shall terminate on the earliest of the occurrence of any of the following events: (i) the last day of the then
current Fiscal Year of the City during which there occurs an Event of Non-Appropriation with respect to
the City; (ii) there occurs an Event of Default with respect to the City under the Lease Purchase
Agreement if the Corporation or the Trustee elects such remedy; (iii) the date upon which all Rentals and
Additional Rentals, as the case may be, required under the Lease Purchase Agreement shall be paid by the
City; or (iv) the date of discharge of the Master Indenture. The expiration or termination of the term of
the Lease Purchase Agreement as to the City’s right of possession of the Project shall terminate the City’s
rights of use of the Project; provided, however, that all other terms of the Lease Purchase Agreement and
the Master Indenture, including the continuation of City’s purchase right under the Lease Purchase
Agreement and all obligations of the Trustee with respect to the Bondowners and the receipt and
disbursement of funds shall be continuing until the lien of the Master Indenture is discharged, as provided
in the Master Indenture, except that all obligations of the City to pay any amounts to the Bondowners and
the Trustee hereunder shall thereafter be satisfied only as provided in the Master Indenture and, with
respect to an Event of Non-Appropriation prior to such expiration or termination as provided in the Lease
Purchase Agreement, are payable prior to the termination of the Lease Purchase Agreement. The
termination or expiration of the term of the Lease Purchase Agreement, of itself, shall not discharge the
lien of the Master Indenture.
Subject to the following two paragraphs, the payment obligations of the City under the Lease
Purchase Agreement shall be absolute and unconditional, free of deductions and without any abatement,
offset, recoupment, diminution or set-off whatsoever and shall be sufficient to provide all funds required
for debt service on the Series 2011 Bonds, funding of the Series 2011 Debt Service Reserve Fund and all
other amounts required under the Master Indenture and the Second Supplement.
Nothing in the Lease Purchase Agreement shall be construed to require the Board of Aldermen to
appropriate any money to pay any Rentals or Additional Rentals (except as appropriated pursuant to the
Lease Purchase Agreement). If the City fails to pay any portion of the Rentals or Additional Rentals
which are due, the City, upon the request of the Trustee or the Corporation, will immediately quit and
vacate the Project Sites and the Rentals and Additional Rentals (except for payments which have been
appropriated and then available for such purpose) shall thereupon cease, it being understood between the
parties that the City shall not be obligated to pay any Rentals or Additional Rentals to the Corporation
except as provided by the Lease Purchase Agreement. Should the City fail to pay any portion of the
required Rentals and Additional Rentals, the Trustee in accordance with the Master Indenture may
immediately bring legal action to evict the City from the Project Sites. No judgment may be entered
against the City for failure to pay any Rentals or Additional Rentals, except to the extent that the City has
incurred liability to pay such Rentals or Additional Rentals through its actual use and occupancy of the
Leased Facilities.
The Rentals and Additional Rentals constitute current expenses of the City and the City’s
obligations are from year-to-year only and do not constitute a mandatory payment obligation of the City
in any ensuing Fiscal Year beyond the current Fiscal Year. No provision of the Lease Purchase
Agreement shall be construed or interpreted as creating a general obligation or other indebtedness of the
City or any agency or instrumentality of the City within the meaning of any constitutional or statutory
debt limitation. Neither the execution, delivery and performance of the Lease Purchase Agreement nor
the issuance of the Series 2011 Bonds directly or indirectly or contingently obligates the City to make any
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payments beyond those appropriated for the City’s then current Fiscal Year; provided, however, that
nothing in the Second Supplement shall be construed to limit the rights of the Bondowners or the Trustee
to receive any amounts which may be realized from the Trust Estate pursuant to the Master Indenture.
City Covenant
The City covenants and agrees that the City will direct the City Administrator, Finance Director,
or any other officer at any time charged with responsibility for formulating budget proposals, is directed
to include in the budget proposals submitted to the Board of Aldermen, in any year during the Term, a
request or requests for the Rentals and a reasonable estimate of Additional Rentals. Requests for
appropriations shall be made in each Fiscal Year so that the City’s Rentals and a reasonable estimate of
Additional Rentals to be paid during the succeeding Fiscal Year will be available for such purposes. It is
the intention of the City that the decision to appropriate the City’s Rentals and Additional Rentals shall be
made solely by the Board of Aldermen and not by any other official of the City except subject to the
power of the Mayor of the City to approve or disapprove ordinances. The City presently expects, in each
Fiscal Year of the City during the Term of the lease Purchase Agreement, to appropriate funds in an
amount sufficient to pay principal, interest and premium, if any, on the Series 2011 Bonds. Upon such
appropriation, the City shall reserve funds sufficient to pay all the Rentals and reasonably estimated
Additional Rentals payable in the relevant Fiscal Year and disburse such funds only to make payments
pursuant to the terms of this Lease Purchase Agreement.
The City shall give notice to the Corporation with a copy to the Trustee as early as practicable in
each Fiscal Year and in any case no later than three (3) Business Days following the date on which the
budget for the next succeeding Fiscal Year is finally approved by the Board of Aldermen of either: (i) the
termination of the Lease Purchase Agreement, or (ii) the appropriation of sufficient funds to make all
payments of Rentals and Additional Rentals during the next succeeding Fiscal Year. Notice that
sufficient funds have been appropriated for the next succeeding Fiscal Year shall be accompanied by
evidence satisfactory to the Corporation of such appropriation If the Trustee does not receive such notice,
the Trustee shall make independent inquiry of the fact of whether or not such appropriation has been
made. Failure of the City to budget and appropriate in each year funds in the minimum amount equal to
the Rentals and a reasonable estimate of Additional Rentals during such Fiscal Year, shall constitute
termination of the Lease Purchase Agreement at the end of the Fiscal Year then in effect, and failure to
give notice to the Corporation of such termination as provided in the Lease Purchase Agreement shall not
affect such automatic termination.
The City intends, subject to the provisions above with respect to an Event of Non-Appropriation,
to continue the Term and to pay the Rentals and Additional Rentals hereunder. The City reasonably
believes that legally available funds in an amount sufficient to pay all Rentals and Additional Rentals
during the Term can be obtained and in addition to using its best efforts to accomplish the same shall
exhaust all available administrative reviews and appeals, if any, in the event any portion of such budget
request is not approved. Notwithstanding the foregoing, the decision to budget and appropriate funds or
to continue the Term is to be made in accordance with the City’s normal procedures for such decisions.
Use of Premises
The City shall have the right to use, occupy or operate the Leased Facilities for any lawful public
purpose; provided, that the City shall not use, occupy or operate the Leased Facilities or any portion
thereof so as to make void or voidable any insurance then in force with respect thereto.
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Rentals
The City, subject to the provisions of the Lease Purchase Agreement, agrees to pay the amounts
required by the Lease Purchase Agreement as follows:
Until the principal of, premium, if any, and interest on the Series 2011 Bonds shall have been
fully paid or provision for the payment thereof shall have been made in accordance with the Master
Indenture and the Second Supplement, the City shall pay to the Trustee, as the assignee of the
Corporation, in funds which will be immediately available to the Trustee not less than five (5) Business
Days before the date any payment is due, as Rentals the amounts which shall correspond to the payments
in respect of the principal of, premium, if any, and interest on the Series 2011 Bonds whenever and in
whatever manner the same shall become due, whether at Stated Maturity, upon redemption or acceleration
or otherwise; provided that, prior to requesting payment of such moneys by the City, the Trustee shall
have first applied to the payment of debt service all investment earnings on deposit in the Series 2011
Bond Fund pursuant to the Second Supplement until such moneys are exhausted. All moneys applied
pursuant to the prior sentence shall be considered to be a credit of the City with respect to payment of
Rentals then due.
The City covenants and agrees that it will pay Rentals at such times and in such amounts as to
assure that no default in the payment of principal of, premium, if any, or interest on the Series 2011
Bonds shall at any time occur. Subject to the first sentence of the paragraph immediately above, if the
balance in the Series 2011 Bond Fund (not subject to the lien of the Trustee under the Master Indenture)
is less than the sum then required to be on deposit therein to pay the principal of, premium, if any, and
interest then payable on the Series 2011 Bonds, the City will forthwith pay as Additional Rentals any
such deficiency to the Trustee for deposit in the Series 2011 Bond Fund in immediately available funds;
provided, that, any amount at any time held by the Trustee in the Series 2011 Bond Fund (not subject to
the lien of the Trustee under the Master Indenture) for the payment of the principal of, premium, if any,
and interest on the Series 2011 Bonds shall, at the election of the City, be credited against the Rentals
next required to he paid by the City; provided, further, that if the amount held by the Trustee in the Series
2011 Bond Fund (not subject to the lien of the Trustee under the Master Indenture) shall be sufficient to
pay at the times required the principal of, premium, if any, and interest on all of the Series 2011 Bonds
then remaining unpaid, the City shall not be obligated to pay Rentals.
The City covenants and agrees to pay the Rentals to the Trustee at its principal corporate trust
office for the account of the Corporation during the Lease Term on or before 11:00 A.M., Trustee’s local
time, in the appropriate amount and on the Rental payment dates. All Rentals shall be deposited by the
Trustee in accordance with the provisions of the Master Indenture and shall be used and applied by the
Trustee in the manner and for the purpose set forth in the Master Indenture and the Second Supplement.
Additional Rentals
The City shall pay or cause to be paid, subject to the provisions of the Lease Purchase
Agreement, as Additional Rentals:
(a)
To the Trustee amounts equal to the amounts to be paid to the Trustee pursuant to
the Master Indenture;
(b)
All Impositions;
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(c)
All amounts required under the Lease Purchase Agreement;
(d)
All costs incident to the payment of the principal of and interest on the Series
2011 Bonds as the same become due and payable, including all costs, premiums and expenses in
connection with the call, redemption and payment of all Outstanding Bonds;
(e)
The payments, if any, which the City shall be required pursuant to the Lease
Purchase Agreement to deposit into the Series 2011 Debt Service Reserve Fund pursuant to the
procedure set forth in the Master Indenture;
(f)
All reasonable expenses and advances incurred or made in connection with the
enforcement of any rights under the Lease Purchase Agreement or the Master Indenture by the
Corporation or the Trustee and any reasonable expenses incurred by the Corporation to enable it
to comply with the provisions of the Lease Purchase Agreement or the Master Indenture;
(g)
All reasonable and necessary fees and expenses of the Corporation incurred in
connection with the Series 2011 Bonds; and
(h)
All amounts required to be rebated to the United States as provided in the Master
Indenture or the Tax Certificate.
The obligation of the City to pay Rentals and Additional Rentals is subject to the provisions of
the Lease Purchase Agreement and does not constitute a general obligation or indebtedness of the City for
which the City is obligated to levy any form of taxation, or for which the City has levied any form of
taxation and shall not be construed to be a debt of the City for any purpose whatsoever or in contravention
of any applicable constitutional, statutory or charter limitation or requirement, but in each Fiscal Year
shall be payable solely from the amounts, if any, appropriated therefor out of the income and revenue
provided for such year plus any unencumbered balances from previous years.
Impositions
The City shall, subject to the provisions of the Lease Purchase Agreement, during the Term, bear,
pay and discharge, before the delinquency thereof, as Additional Rentals, all taxes and assessments,
general and special, if any, which may be lawfully taxed, charged, levied, assessed or imposed upon or
against or be payable for or in respect of the Leased Facilities or the Corporation’s or the City’s interest in
the Project Sites and other amounts payable under the Lease Purchase Agreement, including any new
taxes and assessments not of the kind enumerated above to the extent that the same are lawfully made,
levied or assessed in lieu of or in addition to taxes or assessments now customarily levied against real or
personal property, and further including all water and sewer charges, assessments and other general
governmental charges and impositions whatsoever, foreseen or unforeseen which if not paid when due
would impair the security of the Series 2011 Bonds or encumber the Corporation’s title to the Project
Sites (all of the foregoing being referred to as “Impositions”).
Contest of Impositions
The City shall have the right, in its own name or in the Corporation’s name, to contest the validity
or amount of any Imposition which the City is required to bear, pay and discharge pursuant to the terms of
the Lease Purchase Agreement by appropriate legal proceedings instituted at least ten (10) days before the
Imposition which is being contested becomes delinquent and may permit the Imposition so contested to
remain unpaid during the period of such contest and any appeal therefrom unless the Corporation or the
Trustee shall notify the City that, in the opinion of Counsel, by nonpayment of any such items the interest
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of the Corporation in the Project will be materially endangered or the Project or any part thereof will be
subject to loss or forfeiture, in which event the City shall promptly pay such taxes, assessments or charges
or provide the Corporation with full security against any loss which may result from nonpayment, in form
satisfactory to the Corporation and the Trustee. The Corporation agrees to cooperate with the City in
connection with any and all administrative or judicial proceedings related to Impositions. The City shall
hold the Corporation harmless from any costs and expenses the Corporation may incur related to any of
the above.
Liability Insurance
The City shall, under the City’s customary insurance practice (which may include self-insurance
subject to availability of appropriation therefor) or otherwise, take such measures as may be necessary to
insure against liability for injuries to or disability or death of any person or damage to or loss of property
arising out of or in any way relating to the condition of the Project Sites or any parts thereof during the
term of the Lease Purchase Agreement. The net proceeds of all such self-insurance or other insurance
shall be applied toward extinguishment or satisfaction of the liability with respect to which the insurance
proceeds may be paid. It is understood that this insurance covers any and all liability of the City and its
officers, employees and agents.
Property Insurance
The City shall, under the City’s customary insurance practices (which may include self-insurance
subject to availability of appropriation therefor) or otherwise, take such measures as may be necessary or
appropriate in accordance with sound business practices to insure the Project Sites and the Improvements
to the extent insurable against loss included in all risk insurance policies then in use in the State in an
amount not less than the principal amount of the Bonds Outstanding. Any such insurance may be subject
to reasonable deductibles. Any self-insurance program and the principal amount of Series 2011 Bonds
Outstanding shall be established and maintained in accordance with the City’s customary insurance
practices.
Other Matters Related to Insurance
All insurance policies (other than self-insurance) for the Leased Facilities shall name the
Corporation and the Trustee as the Corporation’s assignee as an insured or loss payee. Insurance
proceeds shall be payable to the City and the Corporation as their interests appear. No insurance policy
may he canceled or modified absent prior written notification of at least 30 days to the Corporation. The
Trustee shall have no responsibility with respect to the procurement of insurance by the City.
Assignment by the Corporation
Pursuant to the Granting Clauses of the Master Indenture, the Corporation has assigned the Lease
Purchase Agreement and all rights and interests of the Corporation under the Lease Purchase Agreement,
including pledging and granting a security interest in all moneys receivable (except for payments under
the Lease Purchase Agreement and its rights to indemnification under the Lease Purchase Agreement) and
in the Project to the Trustee as security for payment of the principal of, premium, if any, and interest on
the Series 2011 Bonds. The City consents to such assignment, pledge and grant and agrees that, subject
to the Lease Purchase Agreement, as to the Trustee, the City’s obligation to make such payments shall be
absolute and unconditional and without any defense or right of abatement, diminution, counterclaim or
set-off arising out of any breach by the Corporation or the Trustee of any obligation to the City.
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Assignment, Subleasing, and Licensing by the City
The Lease Purchase Agreement may not be assigned by the City nor may the City sublease all or
any part of the Leased Facilities to any third party, without the written consent of the Corporation. The
City may, however, grant licenses to access and use all or any portion of the Leased Facilities without the
consent of the Corporation provided, that, such licenses do not cause interest on the Series 2011 Bonds to
become subject to federal income taxes or Missouri income taxes imposed under Chapter 143 of the
Revised Statutes of Missouri, as amended.
Maintenance, Repairs and Modifications
The City shall, at the City’s own expense, maintain, preserve and keep the Leased Facilities in
good repair and condition, and shall from time to time make all repairs, replacements and improvements
necessary to keep the Leased Facilities in such condition. The Corporation shall have no responsibility
for any such repairs, replacements or improvements. In addition, the City shall, at the City’s own
expense, have the right to make additions, modifications and improvements to the Leased Facilities or any
part thereof. The City shall not permit any mechanic’s or other lien to be established or remain against
any part of the Leased Facilities for labor or materials furnished in connection with any remodeling,
additions, modifications, improvements, repairs, renewals or replacements made by the City pursuant to
the Lease Purchase Agreement, provided, that, if any such lien is established and the City shall first notify
the Corporation of the City’s intention to do so, the City may in good faith contest any lien filed or
established against the Project and in such event may permit the items so contested to remain
undischarged and unsatisfied during the period of such contest and any appeal therefrom unless the
Corporation shall notify the City that, in the opinion of Counsel, by nonpayment of any such item the
interest of the Corporation in the Leased Facilities will be materially endangered or the Project or any part
thereof will be subject to loss or forfeiture, in which event the City shall promptly pay and cause to he
satisfied and discharged all such unpaid items or provide the Corporation with full security against any
such loss or forfeiture, in form satisfactory to the Corporation. The Corporation will cooperate fully with
the City in any such contest, upon request and at the expense of the City.
City’s Option to Purchase Corporation’s Interest
The City shall have the option to purchase the Corporation’s right, title, and interest in the Leased
Facilities and to terminate this Lease Purchase Agreement at any time during the Term (subject to the
requirements of the following provisions of this subparagraph) upon payment of the principal, interest and
redemption premium, if any, on the Series 2011 Bonds or providing funds for the Corporation to make
provision for their payment pursuant to the Master Indenture and the payment of all Additional Rentals.
Except as otherwise provided in the Lease Purchase Agreement, the City shall give at least sixty (60) days
written notice to the Corporation and to the Trustee of the City’s intent to exercise the option and so
terminate the Lease Purchase Agreement. Payment of the final Rentals and Additional Rentals shall
constitute exercise of the option granted under the Lease Purchase Agreement without further action by
the City. Notwithstanding the foregoing, the City’s option shall be of no force or effect if prior to the
proposed date of exercising such option, the City has had to surrender possession of the Trust Estate or
any part thereof due to an Event of Default or Event of Non-Appropriation.
If the City receives notice of an Event of Default pursuant to the Master Indenture, the City shall
also have the option to purchase the Corporation’s right, title, and interest in the Leased Facilities and to
terminate the Lease Purchase Agreement upon payment of the Series 2011 Bonds in accordance with the
Master Indenture or providing funds for the Corporation to make provision for their payment pursuant to
the Master Indenture, and the payment of all Additional Rentals. The City shall give notice of its intent to
exercise such option by giving notice thereof to the Corporation and the Trustee not later than ninety (90)
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days after receipt of notice of any such Event of Default. The City shall make payment not later than
ninety (90) days after it has given notice of its intent to exercise this option to the Corporation and the
Trustee.
Condemnation
Unless the City shall have exercised its option to purchase the Corporation’s right, title, and
interest in the Leased Facilities and to terminate this Lease Purchase Agreement, if title to or the
temporary use of any substantial portion of the Improvements or the Project Sites or the interest of the
City or the Corporation in a substantial portion of the Improvements or the Project Sites shall be taken
under the exercise of the power of eminent domain by any governmental body or by any person, firm or
corporation acting under governmental authority, the City shall, subject to the relevant provisions of the
Master Indenture, make provision for the redemption of all Outstanding Series 2011 Bonds in an amount
equal to the net proceeds of any such condemnation award rounded to the nearest Authorized
Denomination, any such net proceeds shall be applied by the City to the payment of the Outstanding
Series 2011 Bonds called for redemption and the City shall pay the fees and expenses of the Corporation
and the Trustee, together with all other amounts due under the Master Indenture and under the Lease
Purchase Agreement and all amounts required to be rebated to the federal government pursuant to the
Master Indenture or the Tax Certificate.
Event of Non-Appropriation
If an Event of Non-Appropriation shall occur and be continuing, upon receipt of a certificate from
a City Representative which states that the City has not appropriated the funds required to be appropriated
by the City, or upon receipt of other notice of the occurrence of any Event of Non-Appropriation with
respect to the City, the Trustee shall immediately notify the Corporation of such occurrence.
If an Event of Non-Appropriation shall occur, the City shall not be obligated to make payment of
the Rentals or Additional Rentals provided for by the Lease Purchase Agreement beyond the last day of
the Fiscal Year during which such Event of Non-Appropriation occurs; provided, however, that the City
shall continue to be liable for the amounts payable during such time when the City continues to occupy
the Leased Facilities or any portion thereof. The Trustee shall, upon the occurrence of an Event of NonAppropriation, have all rights and remedies granted to the Trustee under the Master Indenture and as a
secured creditor under Missouri law, as trustee for the benefit of the Bondowners, and shall be further
entitled to all moneys then on hand in all funds and accounts created under the Master Indenture and
Second Supplement. All property, funds and rights acquired by the Trustee upon the termination of the
Lease Purchase Agreement as to the City’s possessory interest hereunder by reason of an Event of NonAppropriation shall be held by the Trustee under the Master Indenture and the Second Supplement for the
benefit of the Bondowners as set forth in the Master Indenture until the Series 2011 Bonds are paid in
full.
The parties agree that upon the occurrence of an Event of Non-Appropriation, the City shall
immediately quit and vacate the Leased Facilities upon termination of the then current term of the Lease
Purchase Agreement.
Non-Substitution Covenant
The City covenants and agrees that, to the extent permitted by law, if an Event of Default occurs
with respect to the City, the City will not construct, own or operate any water tower or like facility not in
existence at the time such Event of Default occurs during the sixty (60) day period subsequent to such
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Event of Default. The provisions of this paragraph shall survive the termination of the Lease Purchase
Agreement as a result of an Event of Default and shall remain in effect and be binding upon the City.
Termination of Lease Term
The Term shall terminate as to the City, including the City’s right to possession and occupancy of
the Leased Facilities pursuant to the Lease Purchase Agreement, upon the earliest of the occurrence of
any of the following events: (i) the last day of the then current Fiscal Year of the City during which there
occurs an Event of Non-Appropriation with respect to the City; (ii) there occurs an Event of Default with
respect to the City under the Lease Purchase Agreement if the Corporation or the Trustee elects to so
terminate; (iii) the date upon which all Rentals and Additional Rentals, as the case may be, required under
the Lease Purchase Agreement shall be paid by the City; or (iv) discharge of the Master Indenture as
provided in the Master Indenture.
Remedies Regarding City Defaults
Upon the occurrence of an Event of Default by the City pursuant to the Lease Purchase
Agreement resulting in an Event of Default on the Series 2011 Bonds pursuant to the Master Indenture,
the City shall have the exclusive right to purchase from the Corporation the Corporation’s right, title, and
interest in the Leased Facilities for a period of ninety (90) days from the date of such default for the
amount of the principal on the Series 2011 Bonds then Outstanding plus accrued interest to such date of
default. Notwithstanding the foregoing, the Corporation and the Trustee may also exercise the remedies
set forth in the Lease Purchase Agreement. Notwithstanding anything herein to the contrary, the Trustee
shall be entitled to lease the Leased Facilities to any entity or combination of entities, public or private,
for such period as is necessary for the Trustee to obtain sufficient moneys to pay in full the principal of,
redemption premium if any, and interest on the Series 2011 Bonds, and the obligations of the Trustee with
respect to the Bondowners and the receipt and disbursement of funds shall be continuing until the lien of
the Master Indenture is discharged as provided in the Master Indenture.
Events of Default Defined
The following shall be Events of Default under the Lease Purchase Agreement:
(a)
Failure by the City to pay any Rentals or Additional Rentals in the amounts and
at the times specified in the Lease Purchase Agreement.
(b)
Failure by the City to observe and perform any covenant, condition or agreement
on its part to be observed or performed, other than as referred to in clause (a), above for a period
of thirty (30) days after written notice specifying such failure and requesting that it be remedied
has been given to the City by the Corporation or the Trustee, unless the Trustee shall agree in
writing to an extension of such time prior to its expiration; provided, however, if the failure stated
in the notice cannot be corrected within the applicable period, the Trustee will not unreasonably
withhold consent to an extension of such time if corrective action is instituted by the City within
the applicable period and diligently pursued until the default is corrected.
(c)
The filing by the City of a voluntary petition in bankruptcy, or failure by the City
promptly to lift any execution, garnishment or attachment of such consequence as would impair
the ability of the City to carry on its operation, or adjudication of the City as a bankrupt, or
assignment by the City for the benefit of creditors, or the entry by the City into an agreement of
composition with creditors, or the approval by a court of competent jurisdiction of a petition
applicable to the City in any proceedings whether voluntary or involuntary instituted under the
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provisions of the federal bankruptcy laws, as amended, or under any similar acts which may
hereafter be enacted.
(d)
Failure by the City to vacate the Leased Facilities by the expiration of the current
Fiscal Year during which an Event of Non-Appropriation occurs.
The above provisions are subject to the following limitations: if by reason of force majeure the
City is unable in whole or in part to carry out its obligations under the Lease Purchase Agreement, other
than its obligation to pay Rentals or Additional Rentals with respect thereto, the City shall not be deemed
in default under the continuance of such inability, provided notice thereof is given to the Corporation and
the Trustee. The term “force majeure” as used herein shall mean, without limitation, the following: acts
of God; strikes lockouts or other industrial disturbances; acts of public enemies; orders or restraints of any
kind of the government of the United States of America or the State of Missouri or their respective
departments, agencies or officials, or any civil or military authority; insurrections; riots; landslides;
earthquakes; fires; storms; droughts; floods; explosions; breakage or accident to machinery, transmission
pipes, conduits or canals; or any other cause or event not reasonably within the control of the City and not
resulting from the City’s negligence. The City agrees, however, to remedy with all reasonable dispatch
the cause or causes preventing the City from carrying out its obligations pursuant to the Lease Purchase
Agreement; provided that the settlement of strikes, lockouts and other industrial disturbances shall be
entirely within the discretion of the City and the City shall not be required to make settlement of strikes,
lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties
when such course is in the judgment of the City unfavorable to the City.
Remedies on Default
Whenever any Event of Default under the Lease Purchase Agreement shall have happened and be
continuing, the Corporation or the Trustee shall have the right, but not the obligation, and without any
further demand or notice, to take any one or more of the following remedial steps:
(a)
By written notice to the City declare all Rentals and Additional Rentals for the
Fiscal Year in which the Event of Default occurred to be immediately due and payable and such
Rentals and Additional Rentals shall thereupon become immediately due and payable; or
(b)
Take whatever action at law or in equity may appear necessary or desirable to
collect the Rentals and Additional Rentals then due and thereafter to become due during the Term
of the Lease Purchase Agreement, or enforce performance and observance of any obligation,
agreement or covenant of the City under the Lease Purchase Agreement.
Upon the occurrence and continuance of any Event of Non-Appropriation, the Trustee as
provided in the Master Indenture shall give notice to the City to vacate the Leased Facilities immediately
(but in no event earlier than the expiration of the then current Fiscal Year for which the City has paid or
appropriated moneys sufficient to pay all Rentals and Additional Rentals due for such Fiscal Year) and
shall, without any further demand or notice: (i) terminate the Lease Purchase Agreement, re-enter the
Leased Facilities and eject all parties in possession thereof therefrom, and lease the Leased Facilities or
any portion thereof, or (ii) take any action at law or in equity deemed necessary or desirable to enforce its
rights with respect to the Project.
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FIRST SUPPLEMENTAL LEASE PURCHASE AGREEMENT
The following is a summary of certain provisions and covenants contained in the First
Supplemental Lease Purchase Agreement (to the extent they relate to the Series 2008 Bonds). This
summary does not purport to be a complete statement of the terms of the First Supplemental Lease
Purchase Agreement and reference is made to the First Supplemental Lease Purchase Agreement in its
entirety for a complete recital of its terms and provisions.
Use of Terms “Bonds”
The terms “Bond” and “Bonds” wherever used in the Lease Purchase Agreement shall be deemed
to include the Series 2011 Bonds, unless the context clearly requires otherwise.
THE DEED OF TRUST
The following is a summary of certain provisions and covenants contained in the Deed of Trust (to the
extent they relate to the Series 2011 Bonds). This summary does not purport to be a complete statement
of the terms of the Deed of Trust and reference is made to the Deed of Trust in its entirety for a complete
recital of its terms and provisions.
Indebtedness Secured
The Deed of Trust has been given and is intended to secure the full and prompt payment of the
principal of, redemption premium, if any, and interest on the Bonds and the performance of the
Corporation’s obligations under the Master Indenture and the Second Supplement (collectively, the
“Obligations”). The Deed of Trust shall be governed by Mo. Rev. Stat. §443.055 and shall secure, among
other things, “future advances” and “future obligations” within the meaning of Mo. Rev. Stat. §443.055.
The priority of the lien securing such future advances and future obligations shall relate back to the date
the Deed of Trust was recorded, all in accordance with Mo. Rev. Stat. §443.055. In addition, the Deed of
Trust shall secure unpaid balances of advances made by UMB Bank, N.A., as Beneficiary (the
“Beneficiary”) with respect to the Leased Facilities, for the payment of Impositions, insurance premiums
and costs incurred for the protection of the Leased Facilities and any charges, expenses and fees,
including, without limitation, attorneys’ fees, which, by the terms of the Deed of Trust, shall be added to
and increase the Obligations. The Deed of Trust shall remain in full force and effect with respect to all of
the Leased Facilities until all Obligations shall have been paid and performed in full. At such time as the
Obligations are paid and performed in accordance with the terms of the Bond Documents, including,
without limitation, the observance of all the agreements contained in the Deed of Trust, the Deed of Trust
shall become void and shall be released at the sole expense of the Corporation.
Security Agreement
The Deed of Trust is intended to be a security agreement pursuant to the Uniform Commercial
Code for any of the items comprising a part of the Project which, under applicable law, may be subject to
a security interest pursuant to the Uniform Commercial Code, and the Corporation grants the Beneficiary
a security interest in said items, whether now owned or hereafter acquired, and including all products and
proceeds of said items. The Corporation agrees that the Beneficiary may file the Deed of Trust, or a
reproduction thereof, in the real estate records or other appropriate index, as a financing statement for any
of the items specified as part of the Project. Any reproduction of the Deed of Trust or of any other
security agreement or financing statement shall be sufficient as a financing statement. In addition, the
Corporation agrees to execute and deliver to the Beneficiary, upon the Beneficiary’s request, any
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financing statements, as well as extensions, renewals and amendments thereof, and reproductions of the
Deed of Trust, in such form as the Beneficiary may require to perfect a security interest with respect to
said items. The Corporation shall pay all costs of filing such financing statements and any extensions,
renewals and amendments thereof, and shall pay all reasonable costs and expenses of any record searches
for financing statements the Beneficiary may reasonably require. Without the prior written consent of the
Beneficiary, the Corporation shall not create or suffer to be created pursuant to the Uniform Commercial
Code any other security interest in said items, including replacements and additions thereto. Upon the
occurrence of an Event of Default under the Deed of Trust the Beneficiary shall have the remedies of a
secured party under the Uniform Commercial Code and, at the Beneficiary’s option, may also invoke the
remedies as otherwise provided in the Deed of Trust. In exercising any of said remedies, the Beneficiary
may proceed against the items of real property and any items of personal property specified as part of the
Leased Facilities separately or together and in any order whatsoever, without in any way affecting the
availability of the Beneficiary’s remedies under the Uniform Commercial Code or of the remedies
otherwise provided in this instrument.
Liens
The Deed of Trust is and shall be maintained as a valid first mortgage lien on the Leased
Facilities subject to no other liens, claims or encumbrances other than those created by the Bond
Documents, the exceptions identified in Beneficiary’s policy of title insurance and other Permitted
Encumbrances. The Corporation shall not create or permit to exist any security interest, lien, claim or
other encumbrance against the Leased Facilities, except for except for Permitted Encumbrances, the liens
in respect of local property taxes which are not yet due and payable, and liens created by the Bond
Documents.
Default; Remedies
The Obligations shall become immediately due and payable in full at the option of the
Beneficiary upon the occurrence of any one or more of the following (each being an “Event of Default”):
(i) the Corporation shall fail to pay or cause payment of any installment of principal or interest, owing
under the Series 2011 Bonds; (ii) the Corporation shall fail to pay or perform any of the Corporation’s
obligations under the Deed of Trust; (iii) any representation or warranty of the Corporation to the
Beneficiary set forth in the Deed of Trust shall be incorrect, incomplete or misleading in any material
respect, or any such representation or warranty shall become incorrect, incomplete or misleading in any
material respect and the Corporation shall fail to give the Beneficiary prompt notice thereof; (iv) the
Corporation shall sell, convey, alienate, assign or otherwise transfer the Leased Facilities, or any part
thereof or interest therein, in any manner other than as contemplated in the Bond Documents, whether
voluntary, involuntary, by operation of law or otherwise, or the Corporation shall enter into any
agreement, written or oral, to so sell, convey, alienate, assign or otherwise transfer the Leased Facilities,
or any part thereof or interest therein; (v) there shall occur any default or an event of default (however
defined or described) under any other deed of trust, mortgage or like real property security instrument
which encumbers the Leased Facilities, or under any document evidencing any obligation secured
thereby, or any foreclosure or similar proceeding shall commence with respect to the Leased Facilities;
(vi) the Corporation shall deliver to the Beneficiary any notice terminating or purporting to terminate, or
the Corporation shall take any other action to terminate or purporting to terminate, the operation of the
Deed of Trust as security for any future advances or future obligations; (vii) the taking of any substantial
part of the Leased Facilities by condemnation or eminent domain or like action; or (viii) the occurrence of
any default or event of default under the Lease Purchase Agreement.
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In each such event:
(1)
Upon demand of the Mortgage Trustee (as that term is defined in the Deed of
Trust) or the Beneficiary, the Corporation shall forthwith surrender to the Beneficiary the actual
possession of all of the Leased Facilities (subject to rights of the City and any other tenants therein in
possession) and it shall be lawful (whether or not the Corporation has so surrendered possession) for the
Beneficiary, either personally or by agents or attorneys, forthwith to enter into or upon the Project Sites
and to exclude the Corporation, the agents and servants of the Corporation, and all parties claiming by,
through or under the Corporation, wholly therefrom, and the Beneficiary shall thereupon be solely and
exclusively entitled to possession of said Project Sites and every part thereof, and to use, operate, manage
and control the same, either personally or by managers, agents, servants or attorneys, to the fullest extent
authorized by law; and upon every such entry, the Beneficiary may, from time to time, at the expense of
the Corporation, make all necessary and proper repairs and replacements to the Leased Facilities as the
Beneficiary in its discretion sees fit, and any amounts so expended shall be due on demand, bear interest
at the maximum rate provided by law, and shall be secured hereby;
(2)
The Mortgage Trustee or the Beneficiary may make demand for and collect and
receive all rents and income from the Project payable to the Corporation, including rents and income
accrued but unpaid prior to the date of such default, and the receipt of the Beneficiary therefor shall be
binding on the Corporation with respect to the amount so paid. All sums of money received by the
Beneficiary from rents and income, after deducting therefrom the reasonable charges and expenses paid
or incurred in connection with the collection and disbursement thereof, shall be applied to the payment of
the Series 2011 Bonds secured by the Deed of Trust in such order and manner as the Beneficiary may
elect, or applied to remedy any default hereunder as the Beneficiary may direct. Any lessee of the Leased
Facilities, or any part thereof, shall be fully protected in relying and acting upon the written statement of
the Beneficiary to the effect that the Deed of Trust is in default and that the Beneficiary is entitled to
receive the rents and income hereunder, notwithstanding any notice to or knowledge of said lessee to the
contrary. Such lessee shall have no duty to determine that any sum paid to the Beneficiary hereunder is
properly applied by the Beneficiary;
(3)
The Mortgage Trustee, at the request of the Beneficiary, shall proceed to sell,
either by himself or by agent or attorney, the Project Sites or any part(s) thereof at public venue or outcry
at a front door (to be designated by the Beneficiary) of the St. Charles County Circuit Court or other
customary place selected by the Beneficiary, to the highest bidder for cash after first giving notice as
required by the statutes of the State and upon such sale the Mortgage Trustee shall receive the proceeds of
such sale and shall execute and deliver deed or deeds or other instruments of conveyance, assignment and
transfer to the property interest sold, to the purchaser or purchasers thereof; and
(4)
The Mortgage Trustee and/or the Beneficiary may proceed by suit or suits at law
or in equity to enforce the Series 2011 Bonds and/or to foreclose this Deed of Trust and/or pursue any
other remedy available to it at law or in equity and in such event the Mortgage Trustee and/or the
Beneficiary shall be entitled to a reasonable fee for services and the Mortgage Trustee and the Beneficiary
shall be entitled to a reasonable fee for the services of their attorneys and agents, and for all expenses,
costs and outlays. Upon or at any time after the filing of any suit to foreclose the lien hereof, the
Beneficiary shall be entitled as a matter of right to the appointment of a receiver of the Leased Facilities,
either before or after sale, without notice and without regard to the solvency or insolvency of the
Corporation at the time of the application for such receiver, and without regard to the then value of the
Leased Facilities, and the Mortgage Trustee, or the Beneficiary, may be appointed as such receiver. Such
receiver shall have full power to collect the rents, issues and profits from the Project and all other powers
necessary or incidental for the protection, possession, control, management and operation of the Project.
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The Beneficiary from time to time may sell or otherwise dispose of any personal property encumbered
hereby at public or private sales in such place and manner as the Beneficiary shall elect. If notice of such
sale is required by law, such notice shall be deemed reasonable and proper if mailed at least ten (10) days
before such sale to the Corporation at the Corporation’s last address shown on the Beneficiary’s records,
whether or not such notice is actually received or accepted.
In any sale or sales made by the Mortgage Trustee under the power herein granted, or upon any
sale or sales under or by virtue of any judicial proceedings: (i) the whole of the Leased Facilities, real,
personal and mixed, may be sold in one parcel as an entirety, or the Lease Facilities may be sold in
separate parcels as may be determined by the Mortgage Trustee in his discretion; (ii) all recitals contained
in any deed or other instrument of conveyance, assignment or transfer made and delivered by the
Mortgage Trustee in pursuance of the powers granted and conferred herein, shall be prima facie evidence
of the facts therein set forth; and (iii) such sale or sales shall operate to divest the Corporation of all right,
title, interest, claim and demand, either at law or in equity, under statute or otherwise, in and to the Leased
Facilities and every part thereof so sold and shall be a perpetual bar, both in law or equity, against the
Corporation and any and all persons claiming or to claim from, through or under the Corporation. Each
time it shall become necessary to insert an advertisement of foreclosure, and sale is not had, the Mortgage
Trustee shall be entitled to receive its customary fee, which shall not be less than the sum of One Hundred
Dollars ($100.00) for services and the amount of all advertising charges from the Corporation, all of
which shall be further secured hereby.
Upon the foreclosure and/or sale of the Leased Facilities, or any part thereof, the proceeds of such
sale or sales shall be applied as follows: first, to the cost and expense of executing the Deed of Trust,
including reasonable compensation of the Mortgage Trustee and the Beneficiary and reasonable attorneys’
fees and expenses, outlays for documentary stamps, cost of procuring title insurance commitments,
continuing abstracts, title searches or examinations reasonably necessary or proper; second, to the
payment of any and all advances made by the Mortgage Trustee or the Beneficiary, with interest thereon
as hereinabove provided; third, to the payment of the Series 2011 Bonds then Outstanding, together with
accrued interest thereon as therein provided, in such order as the Beneficiary shall determine in
accordance with the Master Indenture and the Second Supplement; and fourth, any surplus thereafter shall
be paid to the Corporation or any other party legally entitled thereto.
The Corporation shall not apply for or avail itself of any appraisement, valuation, redemption,
stay, extension or exemption laws, or any so-called “moratorium laws”, now existing or hereafter enacted,
in order to prevent or hinder the enforcement or foreclosure of the Deed of Trust, and waives the benefit
of such laws. The Corporation, for itself, its successors and assigns, wholly waives the period of
redemption and any right of redemption provided under any existing or future law in the event of a
foreclosure of the Deed of Trust. The Corporation, for itself and all who may claim through or under it,
waives any and all right to have the property and estates comprising the Corporation’s interest in the
Leased Facilities marshaled upon any foreclosure of the lien hereof and agrees that any court having
jurisdiction to foreclose such lien may order the Leased Facilities sold as an entirety. The Corporation
waives any order or decree of foreclosure, pursuant to the rights granted in the Deed of Trust, on behalf of
the Corporation, and each and every person acquiring any interest in or title to the Leased Facilities,
subsequent to the date of the Deed of Trust, and on behalf of all other persons to the extent permitted by
applicable law.
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FIRST AMENDMENT TO FIRST DEED OF TRUST
The following is a summary of certain provisions and covenants contained in the First Amendment to
First Deed of Trust (to the extent they relate to the Series 2011 Bonds). This summary does not purport to
be a complete statement of the terms of the First Amendment to First Deed of Trust and reference is made
to the First Amendment to First Deed of Trust in its entirety for a complete recital of its terms and
provisions.
Amount of Series 2011 Bonds
The Deed of Trust as amended and supplemented by the First Amendment to First Deed of Trust
reflects the issuance of the Series 2011 Bonds in the total principal amount of $6,000,000*, which are
secured by the Deed of Trust.
* Preliminary, subject to change.
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