05-25-1989 Special Called MeetingMay 25, 1989
A special called meeting of Mayor and Council was held May 25, 1989 at Smyrna
City Hall. The meeting was called to order at 7:30 o'clock p.m. by presiding
officer Mayor A. Max Bacon. All council members were present except for Bob
Betenbaugh and Bob Davis. Also present was City Attorney Charles E. Camp,
City Administrator John Patterson, City Clerk Melinda Dameron and Gordon
Mortin with Lex Jolley & Company.
Mayor Bacon stated the purpose of the meeting was to adopt the resolution
approving the 1989 Series Water and Sewerage Revenue Refunding Bonds totaling
$3,510,000. Gordon Mortin stated the purpose of the bond issue was to refund
the outstanding amount of $2,900,000 on the 1984 Series Bonds maturing July
1, 1996.
Jim Hawkins made a motion the ordinance be approved to provide for the
payment of the Series 1984 Water and Sewerage Revenue Bonds in the aggregate
principal amount of $2,900,000 through for the issuance of Water and Sewerage
Revenue Refunding Bonds, Series 1989 in the amount of $3,510,000. Bill
Scoggins seconded the motion which__carried-5-0.
With no fu. er usiness, meeting adjourned at 8:00 p.m.
A. MAX CON, MAY
BOBJ?AVTS, WARD,1
BILL a26CGINS, WW 3�500-_.- JAMES M. HAWKINS, WARD 4
INALL, WARE 5 KATHY BROOKS JORDAN, WARD 6
BOB BETENBAUGH, WARD 7
AN ORDINANCE TO PROVIDE FOR THE ACQUISITION BY REDEMPTION
AND PAYMENT OF CERTAIN CITY OF SMYRNA WATER AND SEWERAGE
REVENUE BONDS, SERIES 1984 HERETOFORE ISSUED AND NOW
OUTSTANDING IN THE AGGREGATE PRINCIPAL AMOUNT OF $2,900,000; TO
PROVIDE FOR THE ISSUANCE OF WATER AND SEWERAGE REVENUE
REFUNDING BONDS, SERIES 1989, PURSUANT TO AND IN CONFORMITY
WITH AN ORDINANCE ADOPTED OCTOBER 4, 1984 AND AN ORDINANCE
ADOPTED AUGUST 4, 1986; TO PROVIDE FUNDS TO BE APPLIED TOWARD
THE COST OF SUCH OVERALL UNDERTAKING NOW CONTEMPLATED; TO
REAFFIRM AND ADOPT ALL APPLICABLE TERMS, PROVISIONS, COVENANTS
AND CONDITIONS OF SAID ORDINANCES OF OCTOBER 4, 1984 AND
AUGUST 4, 1986; TO PROVIDE FOR THE ADOPTION OF RATES AND THE
COLLECTION OF FEES AND CHARGES FOR THE SERVICES, FACILITIES AND
COMMODITIES TO BE FURNISHED BY THE WATER AND SEWERAGE SYSTEM OF
THE CITY OF SMYRNA; TO PROVIDE FOR THE CREATION AND MAINTENANCE
OF CERTAIN FUNDS; TO PROVIDE REMEDIES FOR THE OWNERS OF SAID
BONDS; AND FOR OTHER PURPOSES:
WHEREAS, under and by virtue of the authority of the
"Revenue Bond Law" (Title 36, Chapter 82, Article 3 of the
Official Code of Georgia Annotated, as amended) the City of
Smyrna, a "governmental body" as defined in said Revenue Bond
Law (hereinafter sometimes referred to as "City") is authorized
to acquire by redemption, payment or otherwise all or any part
of its outstanding water and sewerage revenue obligations, to
own and operate a water and sewerage system and to maintain
said water and sewerage system, as added to, extended, improved
and equipped, for its own use, and for the use of the public
and to prescribe and revise rates, and to collect fees and
charges for the services, facilities and commodities furnished
by said system, as now existent and as same is hereafter added
to, extended, improved and equipped, and in anticipation of the
collection of revenues from said system to issue revenue bonds
to provide the funds to be applied toward the cost of acquiring
by redemption such water and sewerage revenue obligations and
to pay all expenses necessary to accomplish the foregoing; and
WHEREAS, the City of Smyrna has heretofore authorized,
pursuant to that certain ordinance adopted October 4, 1984, the
issuance of and actually issued and delivered $4,375,000 prin-
cipal amount of its Water and Sewerage Revenue Bonds, Series
1984, dated October 1, 1984 (hereinafter sometimes referred to
as "Series 1984 Bonds"), in the form of fully registered bonds
without coupons, numbered from R-1 upwards, bearing interest
from date at the rate per annum set forth below opposite each
principal maturity, all interest payable January 1, 1985 and
semi-annually thereafter on the 1st days of January and July in
each year, and the principal maturing on the 1st day of July,
in the years and amounts, as follows:
Year
Amount
Rate
Year
Amount
Rate
1985
$ 90,000
7.00%
1994
$
180,000
9.20%
1986
$ 95,000
7.25%
1995
$
195,000
9.40%
1987
$100,000
7.50%
1996
$
215,000
9.60%
1988
$110,000
7.75%
1997
$
235,000
9.75%
1989
$120,000
8.00%
1998
$
255,000
9.90%
1990
$130,000
8.25%
1999
$
285,000
10.00%
1991
$140,000
8.50%
2000
$
310,000
10.10%
1992
$150,000
8.75%
2004
$1,600,000
10.375%
1993
$165,000
9.00%
of which said Series 1984 Bonds there is now outstanding
$3,980,000 principal amount thereof, being bonds maturing in
the years 1989 to 2000, inclusive and in the year 2004; and
WHEREAS, said Series 1984 Bonds have as security for the
payment thereof and the interest thereon a first or prior lien
on the net revenues of the water and sewerage system, remaining
after the payment of the reasonable and necessary costs of
operating and maintaining said system and provision was made in
the ordinance of October 4, 1984 whereby, from time to time
upon meeting certain terms and conditions, additional bonds
could be issued ranking as to lien on the revenues of the water
and sewerage system pari passu with said Series 1984 Bonds; and
WHEREAS, as additional security for the payment of the
Series 1984 Bonds, the City has obtained a Municipal Bond
Guaranty Insurance Policy from the Municipal Bond Insurance
Association (hereinafter sometimes referred to as "MBIA"); and
WHEREAS, the City met the terms and conditions of said
ordinance of October 4, 1984 and, pursuant to an ordinance
adopted August 4, 1986, has authorized the issuance of, and
actually issued and delivered $1,500,000 principal amount of
its Water and Sewerage Revenue Bonds, Series 1986 (hereinafter
sometimes referred to as "Series 1986 Bonds"), dated July 1,
1986, bearing interest from date at the rate per annum set
forth below opposite each principal maturity, all interest
payable semi-annually on the 1st days of January and July in
each year, and the principal maturing on the lst day of July,
in the years and amounts, as follows:
Year
Amount
Rate
Year
Amount
Rate
1988
$50,000
5.00%
1996
$ 80,000
7.00%
1989
$55,000
5.40%
1997
$ 90,000
7.10%
1990
$55,000
5.70%
1998
$ 95,000
7.20%
1991
$60,000
6.00%
1999
$100,000
7.30%
1992
$65,000
6.25%
2000
$110,000
7.40%
1993
$65,000
6.50%
2001
$115,000
7.40%
1994
$70,000
6.70%
2004
$410,000
7.50%
1995
$80,000
6.90%
-2-
of which said Series 1986 bonds there is now outstanding
$1,450,000 principal amount thereof, being bonds maturing in
the years 1989 to 2001, inclusive, and in the year 2004, and
said Series 1986 Bonds rank on a parity as to lien on the net
revenues of said system with the lien securing the payment of
said Series 1984 Bonds; and
WHEREAS, the City has obtained a Municipal Bond Guaranty
Insurance Policy from the Municipal Bond Insurance Association
as additional security for the payment of said Series 1986
Bonds; and
WHEREAS, the investment banking firm of Lex Jolley & Co.,
Inc., Atlanta, Georgia (hereinafter sometimes referred to as
"investment banking firm") has recommended to the City that,
due to present market conditions and in order to achieve
certain debt service savings, the City should advance refund
that portion of said Series 1984 Bonds maturing on and after
July 1, 1996 and now outstanding in the principal amount of
$2,900,000 (hereinafter sometimes referred to as "Refunded
Bonds") on the earliest practicable call date, and the Mayor
and Council of the City of Smyrna, after an independent
investigation and study, has determined that the refunding of
said Refunded Bonds as aforesaid is in the best interest of the
City and its residents; and
WHEREAS, it has been determined that the refunding of the
Refunded Bonds now outstanding should be accomplished by making
due and legal provision for the redemption on July 1, 1995 of
the $2,900,000 aggregate principal amount of said Series 1984
Bonds maturing on and after July 1, 1996 and to pay all
expenses necessary to effect the refunding of all of said
Refunded Bonds; and
WHEREAS, there are now..and will be on hand in the special
fund created in said ordinance of October 4, 1984 and
designated as "City of Smyrna Water and Sewerage System Sinking
Fund" (hereinafter sometimes referred to as "Sinking Fund") and
credited to the special account maintained therein and
designated as "Debt Service Account" the sum of $147,303.75,
which sum shall be withdrawn, simultaneously with the issuance
and delivery of the bonds hereinafter authorized to be issued,
and such moneys used and applied toward the cost of refunding
said Refunded Bonds; and
WHEREAS, it was provided in Section 8 of Article V of said
ordinance of October 4, 1984, as ratified, reaffirmed,
broadened and extended in Section 16 of said ordinance of
August 4, 1986, that additional revenue bonds or obligations
could be issued, from time to time, ranking as to lien on the
revenues of the system pari passu with said Series 1984 Bonds
and Series 1986 Bonds, upon meeting certain terms and
conditions, which are, in part, as follows:
-3-
"(a) The payments covenanted to be made into the
"City of Smyrna Water and Sewerage System Fund" created in
Paragraph 2 of Section 2 of Article IV of said ordinance of
October 4, 1984, as the same has been enlarged and extended by
Section 13 of this ordinance, as the same may have been
enlarged and extended in any proceedings authorizing the
issuance of any additional parity bonds, must be currently
being made in full amount as required and said "Debt Service
Account" and "Debt Service Reserve Account" held within said
Sinking Fund must be at their proper respective balances.
(b) The net earnings of the system for a period of
twelve (12) consecutive months out of the eighteen (18)
consecutive months preceding the month of adoption of the
proceedings authorizing the issuance of such additional bonds
must have been equal to at least one and twenty -hundredths
(1.20) times the maximum debt service requirement for any
succeeding sinking fund year on the Series 1984 Bonds, the
Series 1986 Bonds and any other issue.or issues of parity bonds
therewith then outstanding and on the bonds proposed to be
issued, or in lieu of the foregoing formula, if a new schedule
of rates and charges for the services, facilities and
commodities furnished by the system shall have been adopted and
an independent and recognized firm of Certified Public
Accountants shall certify that had this new rate schedule been
in effect during the period described above the net earnings of
the system would have been equal to at least one and twenty -
hundredths (1.20) times the maximum debt service requirement
for any succeeding sinking fund year on the Series 1984 Bonds,
the Series 1986 Bonds and any parity bonds therewith then
outstanding and on the bonds proposed to be issued. Net
earnings for the purpose of this provision shall be construed
to be the gross earnings of the system remaining after the
payment of the sums required or permitted to be paid to operate
and maintain said system pursuant to the provisions of
Paragraph 1 of Section 2 of Article IV of said ordinance of
October 4, 1984, but before provision for depreciation.
(c) An independent and recognized firm of Certified
Public Accountants shall certify in triplicate to the governing
body of the City that the requirements of Paragraph (a) above
are being complied with and that the requirements of Paragraph
(b) above have been met. A copy of the certificate of the
Certified Public Accountants shall be furnished to the
designated representative of the original purchasers of the
Series 1984 Bonds and the Series 1986 Bonds."; and
WHEREAS, as required by said ordinances of October 4, 1984
and August 4, 1986, a recognized firm of Certified Public
Accountants has certified to the governing body of the City
that it has complied and is complying with the requirements of
Paragraph (a) and has met the requirements of Paragraph (b) as
QC
1
J
set forth above and a copy of said certificate has been
furnished to the designated representative of the original
purchasers of said Series 1984 Bonds and Series 1986 Bonds; and
WHEREAS, the City has made an application for the issuance
of a municipal bond insurance policy with respect to the Series
1989 Bonds hereinafter authorized to be issued and provision
should be made to print a statement of insurance, if a policy
is so issued, on the back of the Series 1989 Bonds; and
WHEREAS, the City has received and accepted the offer of
Lex Jolley & Co., Inc., Atlanta, Georgia, to purchase the
$3,510,000 principal amount of Series 1989 Bonds hereinafter
authorized to be issued at a price of $3,467,880, plus accrued
interest to date of delivery, and the sale of said Series 1989
Bonds at that price will provide the City with moneys
sufficient to finance the cost of the overall undertaking now
contemplated; and
WHEREAS, from the proceeds derived from the sale of the
Series 1989 Bonds hereinafter authorized to be issued and funds
to be provided by the City a sufficient sum will be deposited,
simultaneously with the issuance and delivery of said bonds,
with the Trust Company Bank, Atlanta, Georgia, the Paying Agent
Bank for said Series 1984 Bonds, and will be used to pay the
cost of acquiring certain direct obligations of the United
State of America (hereinafter referred to as "direct
obligations") and to provide an initial cash balance, which
direct obligations and said cash will be deposited in trust
with said Bank, as, Escrow Agent under an Escrow Deposit
Agreement to be entered into by and between the Bank and the
City of Smyrna, and the initial cash balance and the principal
of and the income derived from said direct obligations, will
provide funds in the amounts required to refund all of said
Refunded Bonds as aforesaid and will be used for that purpose,
all as hereinafter provided; and
WHEREAS, upon provision having been duly and legally made
for the acquisition of said Refunded Bonds by redemption and
payment, the $1,080,000 aggregate principal amount of Series
1984 Bonds then outstanding and maturing on and prior to
July 1, 1995 (hereinafter sometimes referred to as "Outstanding
Series 1984 Bonds") and the $1,450,000 aggregate principal
amount of Series 1986 Bonds then outstanding will be the only
presently outstanding revenue bonds of the City having as
security for the payment thereof and interest thereon a lien
against the net revenues of the City's water and sewerage
system and the City has been and is now complying and will
continue to comply in all respects with the applicable terms,
covenants and provisions of said ordinances of October 4, 1984
and August 4, 1986; and
-5-
WHEREAS, prior to the actual issuance and delivery of the
Series 1989 Bonds hereinafter authorized to be issued, the City
of Smyrna will enter into a contract with Bank South, N.A.,
Atlanta, Georgia pursuant to which the Bank will agree to act
as Paying Agent Bank and as Bond Registrar for the bonds
hereinafter authorized to be issued and to perform various
functions with respect to the bonds, including, but not limited
to, the authentication of the bonds of this issue by the manual
signature of a duly authorized officer of the Bank, as Bond
Registrar, the registration, transfer, exchange and related
mechanical and clerical functions, as well as the preparation,
signing and issuance of checks and drafts in payment of the
principal of and interest on the Series 1989 Bonds as same
become due and payable; and
WHEREAS, the City of Smyrna has entered into a contract,
dated April 2, 1952, with the Cobb County -Marietta Water
Authority (hereinafter referred to as "Authority") and said
contract was subsequently amended on February 23, 1957,
pursuant to which the Authority has agreed to sell and deliver
potable water to the City and the City has agreed to purchase
such potable water for the price and under the terms and
conditions set forth in said contract, as amended, and the cost
of the water so purchased by the City of Smyrna constitutes an
operating charge ranking equally with the other costs of
operating and maintaining the City's water and sewerage system,
a duplicate original of said contract, dated April 2, 1952, and
a duplicate original of said amendment, dated February 23,
1957, being on file and of record in the permanent records of
the Mayor and Council of the City of Smyrna kept in the office
of the Clerk of said City and said contract and amendment
thereto, are incorporated herein and made a part hereof; and
WHEREAS, the City of Smyrna has entered into an Agreement,
dated April 13, 1971, with Cobb County (hereinafter referred to
as "County") pursuant to which the County has agreed to provide
sewage treatment and disposal services for the City's
wastewater in accordance with and under the terms and
conditions provided therein, and the cost of such sewage
services constitutes an operating charge ranking equally with
the other costs of operating and maintaining the City's water
and sewerage system, a duplicate original of said Agreement,
dated April 13, 1971, being on file and of record in the
permanent records of the Mayor and Council of the City of
Smyrna kept in the office of the Clerk of said City and said
Agreement, by this reference thereto, is incorporated herein
and made a part hereof.
NOW, THEREFORE, be it ordained by the Mayor and Council of
the City of Smyrna, and it is hereby ordained by authority of
the same, that the $2,900,000 principal amount of City of
Smyrna Water and Sewerage Revenue Bonds, Series 1984, maturing
in the years 1996 to 2000, inclusive, and in the year 2004, be
and the same are hereby called for redemption on July 1, 1995,
and the owners of said Series 1984 Bonds should present same
for payment on July 1, 1995, and receive the principal amount
thereof, the two per centum (2%) call premium and all interest
then due thereon to July 1, 1995.
BE IT FURTHER ORDAINED by the authority aforesaid and it
is hereby ordained by authority of the same, that notice of
call for redemption pertaining to the $2,900,000 principal
amount of said Series 1984 Bonds signed by the Mayor and
attested by the Clerk of the City of Smyrna shall be given to
Trust Company Bank, Atlanta, Georgia, and a copy of said notice
shall be mailed, postage prepaid, at least thirty (30) days
prior to the July 1, 1995 redemption date, to all registered
owners of said Series 1984 Bonds to be redeemed whose addresses
shall appear upon the books of registration provided therefor,
which notice shall be in substantially the following form:
-7-
NOTICE OF CALL FOR REDEMPTION
CITY OF SMYRNA, (GEORGIA)
WATER AND SEWERAGE REVENUE BONDS,
SERIES 1984
NOTICE IS HEREBY given to the, owners of the following
described -Water and Sewerage Revenue Bonds of the City of
Smyrna, Georgia, that'said bonds have been called for
redemption on July 1, 1995, said bonds being in the aggregate
principal amount of $2,900,000 known as "City of Smyrna Water
and Sewerage Revenue Bonds, Series 1984", dated October 1,
1984, bearing interest from date at the rate per annum set
forth below opposite each principal maturity, all interest
payable January 1, 1985 and semi-annually thereafter on the 1st
days of January and July in each year, and the principal
maturing on the lst day of July, in the years and amounts, as
follows:
Year
Amount
Rate
Year
Amount
Rate
1996
$215,000
9.60%
1999
$ 285,000
10.00%
1997
$235,000
9.75%
2000
$ 310,000
10.10%
1998
$255,000
9.90%
2004
$1,600,000
10.375%
Funds for the redemption and payment of said bonds and the
interest then due thereon to July 1, 1995 and the required 2%
premium will be available at Trust Company Bank, Atlanta,
Georgia, on July 1, 1995, and said above described bonds should
be presented to said bank for redemption and payment on said
date. Interest on the above described bonds designated for
redemption shall cease to accrue after the redemption date.
This notice is given under and pursuant to an ordinance of
the Mayor and Council of the City of Smyrna adopted on the
day of May, 1989.
Attest:
Clerk
(S E A L)
Mayor, City of Smyrna, Georgia
:F:]=
BE IT FURTHER ORDAINED by the authority aforesaid and it
is hereby ordained by authority of the same, that the City of
Smyrna enter into that certain Escrow Deposit Agreement
(hereinafter referred to as "Escrow Deposit Agreement") with
Trust Company Bank, Atlanta, Georgia, the Paying Agent Bank for
said Refunded Bonds, as Escrow Agent, on the date of the
issuance and delivery of the Series 1989 Bonds herein
authorized to be issued, and said Escrow Deposit Agreement be
and the same is hereby approved and the Mayor be and is hereby
authorized and directed to execute said Escrow Deposit
Agreement for and on behalf of the City and the Clerk of the
City be and is hereby authorized and directed to attest same
and impress thereon the official seal of the City of Smyrna and
that said Escrow Deposit Agreement shall be in substantially
the form which is on file and of record in the Minute Book of
the Mayor and Council of the City of Smyrna and by this
reference thereto said Escrow Deposit Agreement is incorporated
herein and made a part hereof, subject to such changes,
insertions and omissions as may be required to effect the
refunding of said Refunded Bonds as aforesaid and as same may
be approved by the Mayor and the execution of said Escrow
Deposit Agreement by the officers of the City as herein
authorized shall be conclusive evidence of any such approval.
BE IT FURTHER ORDAINED by the authority aforesaid and it
is hereby ordained by authority of the same, that
simultaneously with the issuance and delivery of the Series
1989 Bonds herein authorized to be issued, the sum of
$147,303.75 then on hand in the special account designated as
"Debt Service Account" and held within the "City of Smyrna
Water and Sewerage System Sinking Fund" shall be withdrawn
therefrom and deposited in trust with Trust Company Bank, as
Escrow Agent under said Escrow Deposit Agreement, as an initial
cash balance and the cash so deposited with the Escrow Agent
shall be subject to a lien and charge in favor of the owners of
said Refunded Bonds and shall be held for the security of such
owners until disbursed as hereinafter and in said Escrow
Deposit Agreement provided.
BE IT FURTHER ORDAINED by the authority aforesaid and it
is hereby ordained by authority of same, that simultaneously
with the -issuance and delivery of the Series 1989 Bonds herein
authorized to be issued, the sum of $3,381,869.96 or such other
amount as may be necessary, derived from the sale of said
Series 1989 Bonds, shall be deposited with Trust Company Bank,
as Escrow Agent under said Escrow Deposit Agreement, and
immediately used to pay the cost of acquiring certain direct
obligations of the United States of America which shall be
deposited in trust with said Bank as Escrow Agent under said
Escrow Deposit Agreement and to pay certain expenses incident
to the refunding of said Refunded Bonds. The direct
obligations so deposited with said Escrow Agent and the income
derived from said direct obligations shall be subject to a lien
-9-
and charge in favor of the owners of said Refunded Bonds and
shall be held for the security of such owners until disbursed
as•hereinafter and in said Escrow Deposit Agreement provided.
BE IT FURTHER ORDAINED by the authority aforesaid and it
is hereby ordained by authority of same, that the initial cash
balance and the principal of and income derived from all of
said direct obligations so deposited in trust with the Escrow
Agent as received have been calculated as being sufficient and
shall be used to refund all of the City's outstanding Refunded
Bonds by making the following payments, on the dates and in the
amounts, as follows:
Date
Principal
Interest
Premium
Total
7/1/89
-0-
$147,303.75
-0-
$
147,303.75
1/1/90
-0-
$147,303.75
-0-
$
147,303.75
7/l/90
-0-
$147,303.75
-0-
$
147,303.75
1/1/91
-0-
$147,303.75
-0-
$
147,303.75
7/1/91
-0-
$147,303.75
-0-
$
147,303.75
l/l/92
-0-
$147,303.75
-0-
$
147,303.75
7/l/92
-0-
$147,303.75
-0-
$
147,303.75
l/l/93
-0-
$147,303.75
-0-
$
147,303.75
7/l/93
-0-
$147,303.75
-0-
$
147,303.75
1/1/94
-0-
$147,303.75
-0-
$
147,303.75
7/l/94
-0-
$147,303.75
-0-
$
147,303.75
1/l/95
-0-
$147,303.75
-0-
$
147,303.75
7/l/95
$2,900,000
$147,303.75
$58,000
$3,105,303.75
BE IT FURTHER ORDAINED by the authority aforesaid and it
is hereby ordained by authority of same, as follows:
Section 1. That all of the applicable provisions,
covenants and conditions contained in Section 8 of Article IV
of said ordinance of October 4, 1984, as ratified, reaffirmed,
broadened and extended in Section 16 of said ordinance of
August 4, 1986, having been met and complied with, there be and
there is hereby authorized to be issued pursuant to said
ordinances, the Revenue Bond Law and the Charter of the City,
$3,510,000 principal amount of water and sewerage revenue bonds
for the purpose of providing funds to be applied toward the
cost of refunding by redemption and payment the City of Smyrna
Water and Sewerage Revenue Bonds, Series 1984, maturing on and
after July 1, 1996, and now outstanding in the aggregate
principal amount of $2,900,000, and to pay all expenses
necessary to accomplish the foregoing, and said bonds shall be
designated as "City of Smyrna Water and Sewerage Revenue
Refunding Bonds, Series 1989" (hereinafter sometimes referred
to as "Series 1989 Bonds"), shall be dated June 1, 1989, shall
be in fully registered form without coupons, shall be in the
denomination of $5,000 or any integral multiple thereof, shall
be numbered R-1 upward, shall be transferable to subsequent
owners as hereinafter provided, shall bear interest from date
at the rate per annum set forth opposite each principal
-10-
maturity, all interest shall be payable January 1, 1990 and
semi-annually thereafter on the 1st days of January and July in
each year, and the principal shall mature on the 1st day of
July, in the years and amounts, as follows:
Year
Amount
Rate
Year
Amount
Rate
1995
$280,000
6.60%
2000
$350,000
6.90%
1996
$275,000
6.70%
2001
$380,000
6.95%
1997
$290,000
6.75%
2002
$405,000
7.00%
1998
$305,000
6.80%
2003
$430,000
7.00%
1999
$335,000
6.85%
2004
$460,000
7.00%
The principal amount of said Series 1989 Bonds shall be payable
at maturity, unless redeemed prior thereto as hereinafter pro-
vided, upon presentation and surrender thereof at the principal
corporate trust office of Bank South, N.A., Atlanta, Georgia,
Paying Agent and Bond Registrar, and payments of interest on
the bonds shall be made by check,or draft payable to the
registered owner as shown on the bond registration book of the
City of Smyrna -kept by the Bond Registrar at the close of
business on the fifteenth day of the calendar month next
preceding the January 1 and July 1 interest payment dates and
such payments'shall be mailed to the registered owner at the
address shown on said bond registration book. Both the
principal of and interest on the bonds of this issue shall be
payable in lawful money of the United States of America.
Section 2. The bonds of this issue shall be executed on
behalf of the City of Smyrna by use of the facsimile signature
of the Mayor and attested by the facsimile signature of the
Clerk of the City of Smyrna and a facsimile of the official
seal of the City shall be imprinted thereon and the bonds shall
be authenticated by the manual signature of a duly authorized
signatory of Bank South, N.A., Atlanta, Georgia, as Bond
Registrar. Said Clerk is hereby authorized to certify by the
use of said Clerk's facsimile signature as to the authenticity
of a true and correct copy of the text of the legal opinion to
be rendered by Sutherland, Asbill•& Brennan, Bond Counsel,
which opinion will be printed on the bonds of this issue. The
validation certificate to be printed on the bonds of this issue
shall be executed by use of the facsimile signature of the
Clerk of the Superior Court of Cobb County and a facsimile of
the official seal of said court shall be imprinted thereon.
There shall be printed on the back of the Series 1989 Bonds a
Statement of Insurance prepared by the issuer of such policy.
In case any officer whose signature shall appear on the bonds
shall cease to be such officer before delivery of such bonds,
such signature shall nevertheless be valid and sufficient for
all purposes the same as if such officer had remained in office
until such delivery. The Series 1989 Bonds, the certificate of
authentication and registration, form of assignment and the
certificate of validation to be endorsed upon the bonds, shall
-11-
be in substantially the following forms, with such variations,
omissions and insertions as may,be'required or permitted by
this ordinance, to -wit:
-12-
No. R-
UNITED STATES OF AMERICA
STATE OF GEORGIA
CITY OF SMYRNA
WATER AND SEWERAGE REVENUE REFUNDING BOND
SERIES 1989
MATURITY DATE: INTEREST RATE: BOND DATE: CUSIP:
June 1, 1989
FOR VALUE RECEIVED, the City of Smyrna, a municipal
corporation of the County of Cobb, State of Georgia, hereby
promises to pay solely from the special fund provided
therefore, as hereinafter set forth, to
, or registered assigns, the principal sum of
DOLLARS
in lawful money of the United States of America, on the date
specified above, unless redeemed prior thereto as hereinafter
provided, upon presentation and surrender hereof at the
principal corporate trust office of Bank South, N.A., Atlanta,
Georgia, Paying Agent and Bond Registrar, and to pay to the
registered owner hereof solely from the special fund interest
on said principal amount from the date hereof or from the most
recent interest payment date to which interest has been paid,
at the rate per annum specified above, on January 1, 1990 and
semi-annually thereafter on the 1st days of January and July in
each year (each an "Interest Payment Date"), until payment of
the principal amount hereof. Payments of interest on this bond
shall be made by check or draft payable to the registered owner
as shown on the bond registration book of the City of Smyrna
kept by the Bond Registrar at the close of business on the
fifteenth day of the calendar month next preceding each
Interest Payment Date and such interest payments shall be
mailed to the registered owner at the address shown on the bond
registration book.
This bond is one of a duly authorized issue in the
aggregate principal amount of $3,510,000 (hereinafter sometimes
referred to as "Series 1989 Bonds") issued for the purpose of
providing funds to be applied toward the cost of refunding by
redemption and payment the City of Smyrna Water and Sewerage
Revenue Bonds, Series 1984, maturing on and after July 1, 1996,
and now outstanding in the aggregate principal amount of
$2,900,000, and to pay all expenses necessary to accomplish the
-13-
foregoing, and is issued under authority of the Revenue Bond
Law (Title 36, Chapter 82, Article 3 of the Official Code of
Georgia Annotated, as amended) and the Charter of the City of
Smyrna, and was duly authorized by ordinances of the Mayor and
Council of the City of Smyrna adopted on the 4th day of
October, 1984, on the 4th day of August, 1986 and on the
day of May, 1989 (same being hereinafter sometimes referred to
as "said ordinances"). The bonds of this issue rank on a
parity as to lien on the net revenues of the City's water and
sewerage system with the City's Water and Sewerage Revenue
Bonds, Series 1984, heretofore issued and delivered pursuant to
the ordinance of October 4, 1984 and now outstanding in the
principal amount of $1,080,000 (the "Outstanding Series 1984
Bonds") and the City's Water and Sewerage Revenue Bonds, Series
1986, heretofore issued and delivered pursuant to the ordinance
of August 4, 1986 and now outstanding in,the principal amount
of $1,450,000 (the "Outstanding Series 1986 Bonds") and shall
be secured by the same lien on the net revenues of said system.
In addition to said Outstanding Series 1984 Bonds, said
Outstanding Series 1986 Bonds and the Series 1989 Bonds
(hereinafter sometimes referred to collectively as "Revenue
Bonds"), the City may issue, under certain terms and conditions
as provided in said ordinances, additional revenue bonds or
obligations which, if issued, will rank on a parity as to lien
on the net revenues of the City's water and sewerage system
with said Revenue Bonds. Reference to said ordinances is
hereby made for a complete description of the fund charged
with, and pledged to, the payment of the principal of and the
interest on the Series 1989 Bonds or any other issue, the
nature and extent of the security, the rights, duties and
obligations of the City, the rights of the owners of the Series
1989 Bonds and the terms and conditions under which additional
parity bonds may be issued to all the provisions of which the
owner hereof, by the acceptance of this bond, assents.
The terms and provisions of this bond and definitions of
certain terms used herein are continued on the reverse side
hereof and all such continued terms and provisions and
definitions shall for all purposes have the same effect as
though fully set forth at this place.
This bond shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under said
ordinances until this bond shall have been authenticated and
registered upon the bond registration book kept by the Bond
Registrar for that purpose, which authentication and
registration shall be evidenced by the execution by the manual
signature of a duly authorized signatory of the Bond Registrar
of the certificate hereon.
-14-
IN WITNESS WHEREOF, the City of Smyrna, Georgia, has
caused this bond to be executed by use of the facsimile
signature of its Mayor and a facsimile of its official seal to
be imprinted hereon and attested by the use of the facsimile
signature of its Clerk, as of the 1st day of June, 1989.
CITY OF SMYRNA
Attest: By:
Mayor
Clerk
(S E A L)
Date of Authentication and Registration:
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This bond is one of th'e Series 1989 Bonds described in the
ordinance of May 1989.
Bank South, N.A., as Bond Registrar
By:
Authorized Signatory
-15-
VALIDATION CERTIFICATE
STATE OF GEORGIA )
COUNTY OF COBB )
The undersigned Clerk of the Superior Court of Cobb
County, State of Georgia, DOES HEREBY CERTIFY that this bond
was validated and confirmed by judgment of the Superior Court
of Cobb County, Georgia, on the day of June, 1989, and
that no intervention or objection was filed in the proceedings
validating same and that no appeal from said judgment of
validation has been taken.
WITNESS my facsimile signature and seal of the Superior
Court of Cobb County, Georgia.
(S E A L)
Clerk, Superior Court,
Cobb County, Georgia
-16-
[THE FOLLOWING SHALL BE PRINTED ON THE BACK
OF THE SERIES 1989 BONDS]
This bond is transferable only upon the bond registration
book kept for that purpose at the principal corporate trust
office of the Bond Registrar by the registered owner hereof in
person, or by attorney duly authorized in writing, upon the
surrender and presentation to the Bond Registrar of this bond
duly endorsed for transfer or accompanied by an assignment duly
executed by the registered owner or attorney duly authorized in
writing, and thereupon a new registered bond, in the same
aggregate principal amount and of the same maturity shall be
issued to the transferee in exchange therefor.
The Series 1989 Bonds are issuable in the form of
registered bonds in the denomination of $5,000 or any integral
multiple thereof and are exchangeable at the principal
corporate trust office of the Bond Registrar in the manner,
subject to the conditions and upon payment of charges, if any,
provided in the ordinance of May , 1989.
Said ordinances provide, among other things, for
prescribing and revising rates and collecting fees and charges
for the services, facilities and commodities furnished by the
water and sewerage system, as now existent and as hereafter
added to, extended, improved and equipped, to the extent
necessary to produce revenues sufficient to pay the reasonable
and necessary costs of operating and maintaining said system,
including the payment of any contractual obligations incurred
pertaining thereto, and to pay into a special fund designated
"City of Smyrna Water and Sewerage System Sinking Fund" the
amounts required to pay the principal of and the interest on
said Revenue Bonds and any other bonds hereafter issued on a
parity therewith as the same become due and payable, either at
maturity or by proceedings for mandatory redemption, and to
create and maintain a reserve therein for that purpose, as well
as t`o°create and maintain a reserve for extensions and
improvements to the system.
This bond shall not be deemed to constitute a debt of the
City of Smyrna nor a pledge of the faith and credit of .said
City, nor shall the City be subject to any pecuniary liability
hereon. This bond shall not be payable from, nor a charge
upon, any funds other than the revenues pledged to the payment
hereof, and is'payable solely from the special fund provided
therefor from the revenues of said system, including all future
additions thereto and any other moneys deposited therein. No
owner of this bond shall ever have the right to compel the
exercise of the taxing power of the City to pay the same, or
the interest hereon, or to enforce payment hereof against any
-17-
other property of the City, nor shall this bond constitute a
charge, lien or encumbrance, legal or equitable, upon any other
property of the City other than the revenues pledged to the
payment hereof.
The Series 1989 Bonds may be redeemed prior to their
respective maturities at the option of the City, either in
whole or in part, on any interest payment date in any year, not
earlier than July 1, 1999 from any moneys available for such
purpose as provided in the ordinance of May , 1989 by
payment of the principal amount thereof and accrued interest
thereon to the date of redemption, together with a premium of
2% of such principal amount if redeemed on or prior to January
1, 2000; 1% of such principal amount if redeemed thereafter and
on or prior to January 1, 2001 and at par without a premium if
redeemed thereafter and before maturity. If the bonds are
called in part, then any bonds so called for redemption shall
be called in the inverse order of their maturities and if less
than a full maturity by lot in such manner'as may be designated
by the Bond Registrar.
In addition, the Series 1989 Bonds maturing July 1, 1995
are subject to mandatory redemption prior to maturity in
accordance with the provisions of the ordinance of May ,
1989, in part, by lot in such manner as may be designated by
.the Bond Registrar at par plus accrued interest to the
redemption date, in the following principal amounts on July 1,
in the years, as follows:
Year
Amount Year Amount
1990
$40,000 1993 $50,000
1991
$40,000 1994 $50,000
1992
$45,000
Notice designating the Series 1989 Bonds (or the portion
of the principal amount of the bonds in multiples of $5,000) to
be acquired by redemption, as aforesaid, shall be mailed,
postage prepaid, to all registered owners of bonds to be
redeemed in whole or in part at the addresses which appear in
the bond registration book at least thirty (30) days prior to
the redemption date, but failure so to mail any such notice
shall not affect the validity of the proceedings for such
redemption or cause the interest to accrue on the principal
amount of the Series 1989 Bonds so designated for redemption
after the redemption date.
To the extent and in the manner permitted by said
ordinances, modifications, alterations, amendments, additions
and recisions of the provisions of said ordinances, or of any
ordinance supplemental thereto or of the Revenue Bonds, may be
made by the City with the consent of the owners of at least
sixty-five.per centum (65%) in aggregate principal amount of
-18-
the Revenue Bonds then outstanding, including any parity
obligations therewith then outstanding, and without the
necessity for notation hereon of reference thereto.
This bond is issued with the intent that the laws of the
State of Georgia shall govern its construction.
In case of default, the owner of this bond shall be
entitled to the remedies provided in said ordinances
authorizing its issuance and in said Revenue Bond Law and any
amendments thereto.
It is hereby recited and certified that all acts, condi-
tions and things required to be done precedent to and in the
issuance of this Water and Sewerage Revenue Bond have been
done, have happened and have been performed in due and legal
form as required by law, and that provision has been made for
the allocation from the anticipated revenues of the water and
sewerage system, as now existent and as hereafter added to,
extended, improved and equipped, of amounts sufficient to pay
the principal of and the interest on all of said Revenue Bonds
as same mature, or are acquired by mandatory redemption, and to
create and maintain a reserve for that purpose, and that said
revenues are irrevocably allocated and pledged to the payment
of said Revenue Bonds and the interest thereon.
-19-
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns
and transfers unto
[please print or typewrite name and address
[Please insert Social Security on Tax Identification Number]
the within bond and all
including postal zip code of assignee]
rights thereunder, hereby constituting and appointing
la'ttorney to transfer this bond on the bond registration book
(kept for such purpose by the Bond Registrar,.with full power of
substitution in the premises.
DATED
Signature Guaranteed: Notice: The signature to this
assignment must correspond with
the name as it appears upon the
face of the within bond in every
particular, without alteration or
enlargement or any change
whatever.
**********
F
STATEMENT OF INSURANCE
-20-
Section 3. Only those Series 1989 Bonds which shall have
endorsed thereon a certificate of authentication and
registration substantially in the form hereinbefore set forth,
duly executed by the manual signature of an authorized
signatory of Bank South, N.A. as Bond Registrar, shall be
entitled to any benefit or security under this ordinance and
such certificate upon any of said bonds when duly executed
shall be conclusive evidence that such bond has been duly
authenticated, registered and delivered. It shall not be
necessary that the same signatory of the Bond Registrar sign
the certificate of authentication and registration on all of
the Series 1989 Bonds that may be issued hereunder at any one
time. The person in whose name any bond shall be registered
shall be deemed and regarded as the absolute owner thereof for
all purposes and the payment of the principal amount, interest
and premium, if any, shall be made only to or upon the order of
the registered owner thereof. All such payments shall be valid
and effectual to satisfy and discharge the liability upon such
bond, including redemption premium, if any, and the interest
thereon to the extent of the sums so paid.
Section 4. The Bond Registrar shall keep the bond
registration book for the registration of the Series 1989 Bonds
and for the registration of transfers of the bonds as herein
provided. The transfer of any bond shall be registered upon
the bond registration book upon the surrender and presentation
of the bond to the Bond Registrar duly endorsed for transfer or
accompanied by an assignment duly executed by the registered
owner or attorney authorize in writing in such form as shall be
satisfactory to the Bond Registrar. Upon any such registration
of transfer, the Bond Registrar shall authenticate and deliver
in exchange for such bond or bonds so surrendered, a new bond
or bonds registered in name of the transferee, of any
denomination or denominations authorized by this ordinance, and
in an aggregate principal amount equal to the aggregate
principal amount of the bonds so surrendered and of the same
maturity.
Section 5. Any Series 1989 Bond, upon presentation and
surrender thereof to the Bond Registrar, together with an
assignment duly executed by the registered owner or duly
authorized attorney, in such form as may be satisfactory to the
Bond Registrar, may be exchanged, at the option of the
registered owner, for an aggregate principal amount of bonds of
the same maturity equal to the principal amount of the bond so
surrendered and of any authorized denomination or
denominations. The Bond Registrar may make a charge for every
exchange or registration of transfer of the Series 1989 Bonds
sufficient to reimburse it for any tax or other governmental
charge required to be paid with respect to such exchange or
registration of transfer, but no other charge shall be made to
the owner for the privilege of exchanging or registering the
transfer of the Series 1989 Bonds under this ordinance.
-21-
Section 6. If any of the Series 1989 Bonds shall become
mutilated, the Bond Registrar in its discretion and at the
expense of the owner of such bond shall authenticate and
deliver a new bond of like tenor registered in the name of the
owner in exchange and substitution for such mutilated bond. If
any bond shall become lost, destroyed or wrongfully taken,
evidence of such loss, destruction or wrongful taking within a
reasonable time thereafter may be submitted to the City and if
such evidence shall be satisfactory and indemnity of a
character in an amount satisfactory shall be given, then the
City at the expense of the owner shall cause a new bond of like
tenor registered in the name of the owner to be authenticated
by the Bond Registrar and delivered to the registered owner.
Section 7. The City shall make all necessary and proper
provisions for the transfer and exchange of the Series 1989
Bonds by the Bond Registrar and the City shall deliver or cause
to be delivered to the Bond Registrar a sufficient quantity of
blank bonds duly executed on behalf of the City, together with
the certificate of validation pertaining thereto duly executed
by the Clerk of the Superior Court of Cobb County, as herein
provided in order that the Bond Registrar shall at all times be
able to register and authenticate the Series 1989 Bonds at the
earliest practicable time in accordance with the provisions of
this ordinance. All bonds surrendered in any such exchange or
registration of transfer shall be forthwith cancelled by the
Bond Registrar and a record thereof duly entered in the
permanent records pertaining to the Series 1989 Bonds
maintained by the Bond Registrar.
Section 8. The Series 1989 Bonds shall stand on a parity
and shall be of equal dignity with the Outstanding Series 1984
Bonds in the principal amount of $1,080,000 issued pursuant to
the ordinance of October 4, 1984 and the Series 1986 Bonds
issued pursuant to the ordinance of August 4, 1986 (all of said
parity bonds including the Series 1989 Bonds being hereinafter
sometimes referred to collectively as "Revenue Bonds"), and
shall be secured by the lien created pursuant to the provisions
of the ordinance of October 4, 1984, as ratified, reaffirmed,
broadened and extended by the ordinance of August 4, 1986, and
as the same is ratified, reaffirmed, broadened and extended by
this ordinance, just as if said Revenue Bonds had been issued
simultaneously under the same ordinance.
Section 9. The Series 1989 Bonds issued hereunder may be
redeemed prior to their respective maturities at the option of
the City in part, on any interest payment date in any year not
earlier than July 1, 1999, from moneys in the "City of Smyrna
Water and Sewerage System Sinking Fund" not required for paying
the principal of and interest on the Outstanding Series 1984
Bonds, the Series 1986 Bonds and the Series 1989 Bonds coming
due, whether at maturity or by proceedings for mandatory
redemption, in the then current sinking fund year and the
-22-
maintenance therein of a reserve in an amount equal to the
maximum debt service requirement coming due in any succeeding
sinking fund year, or the Series 1989 Bonds may be redeemed, in
whole or in part, on any interest payment date in any year not
earlier than July 1, 1999, from any moneys which may be
available for such purpose and deposited with the Paying Agent
Bank on or before the date fixed for redemption. The optional
redemption of the Series 1989 Bonds shall be made by the
payment of the principal amount of the bonds to be redeemed and
accrued interest thereon to date of redemption, together with a
premium of two per centum (2%) of such principal amount if
redeemed on or prior to January 1, 2000, one per centum (1%) of
such principal amount if redeemed thereafter and on or prior to
January 1, 2001 and at par without a premium if redeemed
thereafter and before maturity. If the Series 1989 Bonds are
called for redemption in part, then any bonds so called for
redemption shall be called in inverse order of their maturities
and if less than a full maturity by lot in such manner as may
be designated by the Bond Registrar.
In addition, the Series 1989 Bonds maturing on July 1,
1995 are subject to mandatory redemption prior to maturity on
July 1, 1990 and on each succeeding July 1 to and including
July 1, 1994, in part, by lot in such manner as may be
designated by the Bond Registrar, at par plus accrued interest
to the redemption date, in the following principal amounts on
July 1, in the years, as follows:
Year
Amount Year Amount
1990
$40,000 1993 $50,000
1991
$40,000 1994 $50,000
1992
$45,000
If less than all of the Series 1989 Bonds of a single
maturity are to be redeemed, the Bond Registrar shall treat any
bond of such maturity outstanding in a denomination of greater
than $5,000 as two or more separate bonds in the denomination
of $5,000 each and shall assign separate numbers to each for
the purpose of determining the bonds or the principal amount of
such bonds in a denomination greater than $5,000 to be redeemed
by lot. With respect to any bond called for partial
redemption, the registered owner thereof shall surrender such
bond to the Bond Registrar in exchange for one or more bonds in
any authorized denomination in the aggregate principal amount
equal to the unredeemed principal amount of such bond so
surrendered.
The Bond Registrar shall furnish the City on or before the
forty-fifth (45th) day next preceding each mandatory redemption
date (or optional redemption date if such option is exercised),
with its certificate setting forth the Series 1989 Bonds that
have been selected for mandatory redemption (or optional
redemption) either in whole or in part on such date.
WAC
At least thirty (30) days before the date upon which such
optional redemption or mandatory redemption is to be made a
notice of such optional or mandatory redemption signed by a
duly authorized officer of the Bond Registrar designating the
redemption date and the bonds to be redeemed (in whole or in
part) shall be filed at the place at which the principal of and
interest on the bonds shall be payable and shall be mailed,
postage prepaid, to all registered owners of the Series 1989
Bonds to be redeemed (in whole or in part) at the addresses
which appear upon the bond registration book.
It is expressly provided, however, that the failure so to
mail any such notice of optional redemption or mandatory
redemption of the Series 1989 Bonds shall not affect the
validity of the proceedings for such redemption or cause the
interest to continue to accrue on the principal amount of the
Series 1989 Bonds so designated for redemption after the
redemption date.
Notice having been given in the manner and under the
conditions hereinabove provided, the Series 1989 Bonds so
designated for redemption or the portion of the bonds so
designated for partial redemption shall, on the redemption date
designated in such notice, become and be due and payable at the
redemption price hereinabove specified, and from and after the
date of redemption so designated, unless default shall be made
in the payment of the bonds so designated for redemption or the
portion of the bonds so designated for partial redemption,
interest on the principal amount of said Series 1989 Bonds so
designated for redemption shall cease to accrue on the
redemption date.
So long as the reserve in said Sinking Fund is being
maintained as above provided, or such larger amount as may
hereafter be required as provided in Section 1 of Article II of
said ordinance of October 4, 1984, as hereby ratified and
reaffirmed, in the event it shall issue parity bonds with said
Revenue Bonds, nothing herein contained shall be construed to
limit the right of the City to redeem such future issue or
issues of parity bonds before it redeems the Outstanding Series
1984 Bonds or the Series 1986 Bonds or the Series 1989 Bonds,
or to redeem the Outstanding Series 1984 Bonds or the Series
1986 Bonds, or the Series 1989 Bonds before it redeems the
bonds of such future issue or issues, or it may redeem some of
the bonds of any of said issues, in which event within each
issue subject to redemption such redemption of said bonds shall
be in the inverse order of their maturities as set forth in the
ordinance authorizing their issuance.
-24-
k,
0.1
Nothing herein contained shall be construed to limit the
right of the City to purchase with any excess moneys, as
hereinabove defined, in the Sinking Fund and for sinking fund
purposes, the Series 1989 Bonds in the open market at a price
not exceeding the callable price hereinabove set forth.
Bonds redeemed, purchased or paid cannot be reissued and
shall be cancelled or otherwise mutilated and destroyed, and a
record of such destruction shall be made in the permanent
records of the City and in the records of the Bond Registrar
pertaining to said Series 1989 Bonds.
Section 10. From the proceeds derived from the sale of
the Series 1989 Bonds, including accrued interest, which are
issued under the provisions of this ordinance, the following
payments shall be made, simultaneously with the issuance and
delivery of said Series 1989 Bonds, to the extent and in the
manner herein set forth:
(a) The accrued interest so received shall be
deposited into -the "City of Smyrna Water and Sewerage System
Sinking Fund" hereinafter referred to in Section 11 hereof and
credited to the special account designated as "Debt Service
Account" to be used and applied toward the payment of interest
on the Series 1989 Bonds coming due on January 1, 1990;
(b) The sum of $3,381,869.96, or such other amount
of said proceeds as may be necessary, shall be deposited with
the Trust Company Bank, Atlanta, Georgia, the Paying Agent Bank
for the Series 1984 Bonds and shall be used and applied toward
the cost of refunding by redemption and payment the Series 1984
Bonds maturing on or subsequent to July 1, 1996 and now
outstanding in the aggregate principal amount of $2,900,000 and
to pay certain expenses in connection therewith, all pursuant
to the terms of the Escrow Deposit Agreement with the Trust
Company Bank; and
(c) The balance of the proceeds so received shall be
retained by the original purchasers of the Series 1986 Bonds to
be used and applied toward the payment of the costs incurred by
the City in connection with the issuance and delivery of said
Series 1986 Bonds.
Section 11. As covenanted in Section 1 of Article IV of
said ordinance of October 4, 1984, the City will continue to
operate its water and sewerage system on a fiscal year basis
commencing July 1 in each year and extending through June 30 in
the next year, but it reserves the right to change such fiscal
year by the adoption of proper proceedings to that effect.
The City covenants that it will continue to maintain the
"City of Smyrna Water and Sewerage System Revenue Fund" (here-
inafter referred to as "Revenue Fund") created and covenanted
-25-
to be maintained in said ordinance of October 4, 1984, and into
said fund it will deposit all revenues derived from the
operation and ownership of said system so long as said Revenue
Bonds are outstanding and unpaid, or until provision has been
duly made for the payment thereof and said revenues shall be
disbursed from the Revenue Fund as hereinafter provided:
(a) There shall first be paid from said Revenue Fund
the reasonable and necessary costs of operating, maintaining
and repairing the water and sewerage system, including
salaries, wages, the payment of any contractual obligations
incurred in the operation of said system, cost of materials and
supplies, rentals of leased property, real or personal,
insurance premiums, audit fees and such other charges as proper
to be made for the purpose of operating, maintaining and
repairing said system in accordance with sound business
practice, but before making provision for depreciation.
(b) The City has heretofore created, pursuant to
Paragraph 2 of Section 2 of Article IV of the ordinance of
October 4, 1984, a special fund designated "City of Smyrna
Water and Sewerage System Sinking Fund" (herein sometimes
referred to as "Water and Sewerage System Sinking Fund" or
"Sinking Fund") and said Sinking Fund consists of two accounts
which are held therein, one of which was created and designated
as "Debt Service Account" and the other was created and
designated as "Debt Service Reserve Account" (hereinafter
sometimes referred to as "Reserve Account").
: (i) After making the payments required or
permitted to be made pursuant to the provisions of paragraph
(a) above, there shall be paid from the Revenue Fund into said
Debt Service Account commencing with the month of July, 1989
and continuing from month to month thereafter to June, 1990,
after taking into consideration the moneys on deposit therein,
an amount equal to one -twelfth (1/12) of the debt service
coming due on the Revenue Bonds in the sinking fund year ending
July 1, 1990, and commencing with the month of July, 1990 and
from month to month thereafter an amount equal to one -twelfth
(1/12) of the maximum debt service requirement on the Revenue
Bonds coming due in the then current or any future sinking fund
year, such monthly payments to continue from month to month
until sufficient funds are on hand in said Sinking Fund to pay
all of said outstanding Revenue Bonds as same mature or are
acquired by mandatory redemption and the interest which will
become due and payable thereon.
(ii) After making the payments required to
comply with said subparagraph (i) above, there shall next be
paid into said Debt Service Reserve Account, commencing with
the month of July, 1989, in substantially equal monthly
payments, taking into consideration the amount on deposit
therein, amounts sufficient to create in said Reserve Account
-26-
by July 1, 1994 a debt service reserve equal to the maximum
debt service requirement coming due in any succeeding sinking
fund year on the Revenue Bonds. When the balance in the
Reserve Account shall be equal to the maximum required, no
further payments shall be required to be made into the Reserve
Account unless the Reserve Account shall fall below its
required balance. During the period of accumulation and after
the Reserve Account shall have been accumulated in the full
amount required to be maintained therein as aforesaid, it shall
be maintained for the purpose of paying the principal of and
interest on the Revenue Bonds falling due in any year as to
which there would otherwise be a default and if money is taken
from said Reserve Account for the payment of such principal and
interest, the money so taken shall be replaced in said Reserve
Account from the first moneys in the Revenue Fund thereafter
available and not required to be used for maintenance and
operation changes and not required to be paid into the Debt
Service Account as hereinabove provided in subparagraph (i).
(iii) All sums required to be paid to comply with
the provisions of said subparagraphs (i) and (ii) above shall
be paid on or before the last day of each month in which
payment is due, and if, in any month, for any reason, the City
shall fail to pay the full amount herein required to be paid
into said Sinking Fund the amount of any such deficiency shall
be added to and shall become a part of the amount due and
payable by the City into said Sinking Fund in the next
succeeding month.
(iv) As provided in Paragraph 2 of Section 2 of
Article IV of said ordinance of October 4, 1984, all net
revenues received by the City from its water and sewerage
system immediately become subject to a lien to secure the
payment by the City of the amounts therein agreed to be paid
and the City hereby ratifies and reaffirms the pledge of such
revenues and hereby covenants and agrees that the revenues
received by it from such system shall in like manner be pledged
to secure the payment by the City of the amounts herein agreed
to be paid and that the lien of this pledge shall be valid and
binding against the City and against all other parties having
claims of any kind against the City, whether such claims shall
have arisen from a tort, contract or otherwise and irrespective
of whether such parties have notice thereof.
The Sinking Fund shall continue to be held by Trust
Company Bank of Cobb County, N.A., Smyrna, Georgia, as Sinking
Fund Custodian, and said fund shall be maintained and held in
trust for the benefit of the owners of said Revenue Bonds and
any other bonds or obligations hereafter issued ranking pari
passu therewith and the beneficial interest therein shall be
considered to be in such owners of said Revenue Bonds.
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Section 12. After there have been paid from the Revenue
Fund in each month all amounts hereinabove required or
permitted to be paid pursuant to the provisions of Section 11
hereof and after reserving in the Revenue Fund as a working
capital reserve an amount not to exceed one month's estimated
costs of operating and maintaining the system as determined by
the chief fiscal officer of the City, then there shall next be
paid at the end of each month into a special fund created and
designated in said ordinance of October 4, 1984 as "City of
Smyrna Water and Sewerage System Renewal and Extension Fund"
(hereinafter sometimes referred to as "Renewal and Extension
Fund"), all moneys remaining in said Revenue Fund.
Expenditures shall be made from the Renewal and Extension Fund
only for the purposes provided in Paragraph 3 of Section 2 of
Article IV of said ordinance of October 4, 1984, as hereby
ratified and reaffirmed.
Smyrna Bank and Trust Co., Smyrna, Georgia, is hereby
redesignated as Depository of said Renewal and Extension Fund.
4
As provided in said ordinance of October 4, 1984 and
ratified and reaffirmed in said ordinance of August 4, 1986,
should bonds be hereafter issued ranking as to lien on the
revenues of said system junior and subordinate to the lien
securing the payment of said Revenue Bonds and any parity bonds
therewith hereafter issued, then such payments into the Renewal
and Extension Fund as provided in this Section may be suspended
and the revenues shall be available to the extent necessary to
pay the principal of and interest on such junior lien bonds and
to create and maintain a reasonable reserve therefor, and such
revenues may be allocated and pledged for that purpose.
Moneys in the Renewal and Extension Fund, at the
discretion of the City, may be invested to the extent and in
the manner as provided in Section 7 of Article IV of said
ordinance of October 4, 1984, and all moneys in said Renewal
and Extension Fund and all securities held in and for said fund
and all increments therefrom are hereby pledged to and charged
with the payments mentioned in Paragraph 3 of Section 2 of
Article IV of said ordinance of October 4, 1984, as hereby
ratified and reaffirmed.
Section 13. The City covenants and agrees that it has
heretofore and that it will at all times, and from time to
time, prescribe and place into effect a schedule of rates, fees
and charges for the services, facilities and commodities
furnished by its water and sewerage system, as now existent and
as hereafter added to, extended and improved, and as often as
it shall appear necessary that it will revise and adjust such
schedule of rates, fees and charges for water or sewerage
services and facilities, or both, to the extent necessary to
produce funds sufficient at all times to operate and maintain
said system on a sound businesslike basis and to make the
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payments into the Sinking Fund created by said ordinance of
October 4, 1984, as herein enlarged and extended, in accordance
and compliance with the terms, covenants and conditions of said
ordinance of October 4, 1984, said ordinance of August 4, 1986
and this ordinance and to create and maintain the Renewal and
Extension Fund as provided by said ordinances of October 4,
1984 and August 4, 1986 and this ordinance.
In the event the City shall fail to adopt a schedule or
schedules of rates, fees and charges, or to revise its schedule
or schedules of rates, fees and charges in accordance with the
provisions of this Section, any bondholder, without regard to
whether any default, as defined in Article VII of said
ordinance of October 4, 1984, shall have occurred, may
institute and prosecute in any court of competent jurisdiction
an appropriate action to compel the City to adopt a schedule or
schedules of rates, fees and charges, or to revise its schedule
or schedules of rates, fees and charges, in accordance with the
requirements of this Section and of Section 3 of Article IV of
said ordinance of October 4, 1984.
Section 14. The City further covenants and agrees that it
will not exercise the privilege provided in Article IV, Section
8 of said ordinance of October 4, 1984, as ratified,
reaffirmed, broadened and extended in Section 16 of said
ordinance of August 4, 1986, of issuing additional bonds or
obligations ranking as to lien on the revenues of the system
pari passu with the said Revenue Bonds, unless or until all of
the following conditions are met:
(a) The payments covenanted to be made into.the
"City of Smyrna Water and Sewerage System Fund" created in
Paragraph 2 of Section 2 of Article IV of said ordinance of
October 4, 1984, as enlarged and extended by Section 13 of said
ordinance of August 4, 1986 and as enlarged and extended by
Section 11 of this ordinance, and as the same may have been
enlarged and extended in any proceedings authorizing the
issuance of any additional parity bonds, must be currently
being made in full amount as required and said "Debt Service
Account" and "Debt Service Reserve Account" held within said
Sinking Fund must be at their proper respective balances.
(b) The net earnings of the system for a period of
twelve (12) consecutive months out of the eighteen (18)
consecutive months preceding the month of adoption of the
proceedings authorizing the issuance of such additional bonds
must have been equal to at least one and twenty -hundredths
(1.20) times the maximum debt service requirement for any
succeeding sinking fund year on the Revenue Bonds and any other
issue or issues of parity bonds therewith then outstanding and
on the bonds proposed to be issued; or in lieu of the foregoing
formula, if a new schedule of rates and charges for the
services, facilities and commodities furnished by the system
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i
shall have been adopted and an independent and recognized firm
of Certified Public Accountants shall certify that had this new
rate schedule been in effect during the period described above
the net earnings of the system would have been equal to at
least one and twenty -hundredths (1.20) times the maximum debt
service requirement for any succeeding sinking fund year on the
Revenue Bonds and any parity bonds therewith then outstanding
and on the bonds proposed to be issued. Net earnings for the
purpose of this provision shall be construed to be the gross
earnings of the system remaining after the payment of the sums
required or permitted to be paid to operate and maintain said
system pursuant to the provisions of Paragraph 1 of Section 2
of Article IV of said ordinance of October 4, 1984, but before
provision for depreciation.
(c) An independent and recognized firm of Certified
Public Accountants shall certify in triplicate to the governing
body of the City that the requirements of Paragraph (a) above
are being complied with and that the requirements of Paragraph
(b) above have been met. A copy of the certificate of the
Certified Public Accountants shall be furnished to the
designated representative of the original purchasers of the
Series 1984 Bonds, the Series 1986 Bonds and the Series 1989
Bonds.
(d) Except when bonds are being issued solely for
the purpose of refunding outstanding revenue bonds, the
Consulting Engineers for the City shall provide the City with a
written report recommending the additions, extensions and
improvements be made to the system and stating that same are
feasible, designating in reasonable detail the work and
installation proposed to be done and the estimated cost of
accomplishing such undertaking. Said engineers shall set forth
in said report the projected net earnings to be derived from
the system which will be available for debt service payments
over the life of the Revenue Bonds and any parity bonds
therewith then outstanding and the bonds proposed to be issued
and shall indicate the projected coverage of such debt service
payments in each succeeding sinking fund year. Projected net
earnings in each year for the purpose of this subparagraph (d)
shall be estimated gross earnings of the system in each sinking
fund year remaining after payment of the estimated cost
required or permitted to be paid pursuant to the provisions of
Paragraph 1 of Section 2 of Article IV of said ordinance of
October 4, 1984 for said period to operate, repair and maintain
said system as added to, extended and improved, but before
provision for depreciation.
An executed duplicate original of such report of said
Engineers as required by this provision shall be furnished to
the designated representative of the original purchasers of the
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Series 1984 Bonds, the Series 1986 Bonds and the Series 1989
Bonds not less than ten (10) days before any proceedings are
taken to actually issue such additional bonds.
(e) The governing body of the City shall pass proper
proceedings reciting that all of the above requirements have
been met, shall authorize the issuance of said bonds and shall
provide in such proceedings, among other things, the date such
bonds shall bear, the rate or rates of interest and maturity
dates, as well as the registration and redemption provisions.
The interest on the bonds of any such issue shall fall due on
January 1 and July 1 of each year, and the bonds shall mature
in installments on July 1, but, as to principal, not
necessarily in each year or in equal installments. Any such
proceeding or proceedings shall require the City to increase
the monthly payments then being made into the Sinking Fund to
the extent necessary to pay the principal of and the interest
on the Outstanding Series 1984 Bonds, the Series 1986 Bonds,
the Series 1989 Bonds and on all such parity bonds therewith
then outstanding and on the bonds proposed to be issued as same
become due and payable, either at maturity or by proceedings
for mandatory redemption, in the then current sinking fund
year, and to create within five (5) years from the date of the
bonds to be issued a reserve• in the Reserve Account at least
equal to the maximum debt service requirement coming due in any
succeeding sinking fund year on the Outstanding Series 1984
Bonds, the Series 1986 Bonds, the Series 1989 Bonds and any
parity,bonds therewith then outstanding and on the bonds
proposed to be issued and to maintain said reserve in an amount
sufficient for that purpose. Any such proceeding or
proceedings shall restate and reaffirm, by reference, all of
the applicable terms, conditions and provisions of the
ordinances of October 4, 1984 and August 4, 1986 and this
ordinance.
(f) Such additional bonds or obligations and all
proceedings relative thereto, and the security therefor, shall
be validated as prescribed by law.
Section 15. All of the applicable terms, conditions and
provisions of all other Sections or portions of Sections of
Article IV of said ordinance of October 4, 1984 not herein
specifically referred to are hereby declared applicable to and
are broadened and extended so as to cover the Series 1989 Bonds
and any future issue or issues of parity bonds therewith and
are hereby ratified and reaffirmed and are hereby adopted, and
shall for all purposes apply to the Series. 1989 Bonds as if
said bonds had been originally issued under authority of said
ordinance of October 4, 1984 simultaneously with said Series
1984 Bonds.
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It is further provided, however, that any money in the
Sinking Fund created by said ordinance of October 4, 1984, not
immediately required to pay the interest coming due January 1st
and the principal and interest coming due July 1st on said
Revenue Bonds in any year shall be invested and reinvested to
the extent and in the manner as provided and set forth in
Section 6 of Article IV of said ordinance of October 4, 1984.
Any such securities so purchased shall be held by the Sinking
Fund Custodian in trust until paid at maturity or sold, and all
income or increments therefrom shall be immediately deposited
to the credit of the Account for which same are held. The
moneys in the Sinking Fund, and all income and increments
therefrom were pledged and are hereby pledged to and charged
with: (a) the payment of interest upon the Outstanding Series
1984 Bonds, the Series 1986 Bonds and the Series 1989 Bonds as
such interest falls due; and (b) the payment of the principal
of the Outstanding Series 1984 Bonds, the Series 1986 Bonds
and the Series 1989 Bonds as same become due and payable,
either at maturity or by proceedings for mandatory redemption;
and (c) the optional redemption of the Outstanding Series 1984
Bonds, the Series 1986 Bonds and the Series 1989 Bonds'maturity
at the price and under the conditions provided therefor in said
ordinance of October 4, 1984, said ordinance of August 4, 1986
and this ordinance, respectively; and (d) the purchase of said
Outstanding Series 1984 Bonds, the Series 1986 Bonds and the
Series 1989 Bonds in the open market provided, however, the
price paid shall not exceed the authorized call price
applicable to each such issue; and (e) the transfer of excess
moneys, if any, in the Sinking Fund (as defined in subparagraph
(c) of Paragraph 2 of Section 2 of Article IV of said ordinance
of October 4, 1984) to the Revenue Fund; and (f) the payment of
charges for paying the bonds and interest thereon and the
charges for the registration of the Series 1984 Bonds, the
Series 1986 Bonds and the Series 1989 Bonds secured hereby and
their transfer or exchange in accordance with the terms
thereof; and.(g) the payment of any charges for investment
services.
Section 16. All of the applicable terms, conditions and
provisions of Article V, Article VI, Article VII and Article
VIII and each section and covenant thereof of the ordinance of
October 4, 1984 not specifically referred to herein are hereby
broadened and extended so as to cover the Series 1989 Bonds
issued hereunder and are hereby ratified and reaffirmed as so
extended, and which for all purposes apply to the Series 1989
Bonds as if said bonds had been originally issued under
authority of said ordinance of October 4, 1984, simultaneously
with said Series 1984 Bonds.
Section 17. Anything to the contrary in said ordinances
of October 4, 1984 and August 4, 1986 or this ordinance
contained notwithstanding, it is expressly provided that the
City shall not purchase obligations of the Federal Land Bank,
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the Federal Intermediate Credit Bank or the Central Bank for
Cooperatives as an investment of moneys or as security for
deposits of moneys in any of the special funds created in said
ordinance of October 4, 1984, nor shall any supplemental
ordinance adopted pursuant to the provisions of Article VIII of
said ordinance of October 4, 1984, as ratified, reaffirmed,
broadened and extended by said ordinance of August 4, 1986 and
this ordinance, requiring the consent of bondholders become
effective, unless it shall have obtained the written consent of
the MBIA and issuer of a policy of insurance guaranteeing
timely payment of principal and interest on the Series 1989
Bonds and any future issue of parity bonds.
Section 18. The City hereby covenants and agrees that it
will not, subsequent to the date of the issuance and delivery
of the Series 1989 Bonds, intentionally use any portion of the
proceeds of the Series 1989 Bonds to acquire higher yielding
investments, except as may be otherwise permitted by Section
148 of the Internal Revenue Code of 1986, as amended (the
"Code") and it will comply with, and take such action as may be
required to ensure that the Series 1989 Bonds do not constitute
"arbitrage bonds" with the meaning of Section 148(a) of the
Code.
Section 19. The Series 1989 Bonds herein authorized to be
issued are herby designated as "qualified tax-exempt
obligations" within the meaning of Section 265(b)(3) of the
Code.
Section 20. The Mayor and Clerk of the City of Smyrna are
hereby authorized and directed to execute, for and on behalf of
the City of Smyrna, a certification, based upon facts,
estimates and circumstances, as to the reasonable expectations
regarding the amount, expenditure and use of the proceeds
derived from the sale of the Series 1989 Bonds, as well as such
other documents as may be necessary or desirable in connection
with the issuance and delivery of said Series 1989 Bonds.
Section 21. For the purpose of this ordinance and
pertaining to the Series 1989 Bonds herein authorized to be
issued the terms "original purchasers" and "designated
representative of the original purchasers" shall be construed
to mean Lex Jolley & Co., Inc., Atlanta, Georgia, its
successors or assigns.
Section 22. For the purpose of this ordinance the terms
"principal and interest requirements" and "debt service
requirements" shall be construed to mean the amount required in
each sinking fund year to pay the principal of and interest on
the Outstanding Series 1984 Bonds, the Series 1986 Bonds, the
Series 1989 Bonds and any parity bonds therewith hereafter
issued as the same become due and payable either at maturity or
by proceedings for mandatory redemption.
-3'3-
Section 23. The provisions, terms and conditions of this
ordinance shall constitute a contract by and between the City
of Smyrna and the owners of said Outstanding Series 1984 Bonds,
the Series 1986 Bonds and the owners of the Series 1989 Bonds
authorized to be issued hereunder, and after the issuance of
the Series 1989 Bonds this ordinance shall not be repealed or
amended in any respect which will adversely affect the rights
and interest of the owners of the bonds of any of said issues,
nor shall the governing body of the City pass any proceedings
in any way adversely affecting the rights of such owners, so
long as any of the bonds authorized by said ordinances of
October 4, 1984 and August 4, 1986 and this ordinance, or the
interest thereon, shall remain unpaid or until provision shall
have been duly made therefor.
Any subsequent proceeding or proceedings authorizing the
issuance of additional parity bonds or obligations as permitted
under Section 8 of Article IV of said ordinance of October 4,
1984, Section 16 of said ordinance of August 4, 1986 and
Section 14 of this ordinance, shall in nowise conflict with the
terms and conditions of said ordinances, but shall for all
legal purposes contain all the covenants, agreements and
provisions of said ordinances for the equal protection and
benefit of all owners of said Revenue Bonds.
Section 24. The bonds herein authorized shall be vali-
dated in the manner provided by law, and to that end notice of
the adoption of this ordinance and a copy thereof shall be
served on the District Attorney of the Cobb Judicial Circuit,
in order that proceedings for the above purpose may be
instituted in the Superior Court of Cobb County.
Section 25. Any and all ordinances and resolutions or
parts of ordinances and resolutions, in conflict with this
ordinance this day adopted be and the same are hereby
repealed,and this ordinance shall be in full force and effect
from and after its adoption.
**********
Approved:
Mayor, City of Smyrna, Georgia
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11
TELEPHONE
(404) 525-1859
FAX (404) 525-3048
Lr�c
LEX JOLLEY & CO., INC.
MUNICIPAL AND CORPORATE SECURITIES
Member S.I.P.C.
June 27, 1989
Ms. Melinda Dameron
City Clerk
Post Office Box 1226
Smyrna, Georgia 30081
Re: Bond Purchase Agreement in Connection with
Issuance of $3,510,000 City of Smyrna
(Georgia) Water and Sewerage Revenue
Refunding Bonds, Series 1989
Dear Melinda:
Enclosed is a revised copy of the above. There
was an error in the first paragraph of the front page
which we have corrected at the request of Bob Owens of
Sutherland, Asbill & Brennan. Please discard the
minute book copy you currently have and replace it with
this copy of the contract.
By copy of this letter, I ask that Chuck Camp dis-
card his original copy of the above and replace it with
this copy.
If you have questions or need additional informa-
tion, please do not hesitate to contact me.
Since ely yours,
ordon K. Mortin
President
cc: Honorable A. Max Bacon
Mr. John C. Patterson
LEX JOLLEY
GORDON MORTIN
ED WALL
34 PEACHTREE STREET, N.W. • SUITE 2500 • ATLANTA, GEORGIA 30303-2316
BOND PURCHASE AGREEMENT
$3,510,000
CITY OF SMYRNA (GEORGIA)
WATER AND SEWERAGE REVENUE REFUNDING
BONDS, SERIES 1989
May 22, 1989
City of Smyrna
Smyrna, Georgia
Gentlemen:
On the basis of the representations, warranties and
covenants contained in the Certificates (hereinafter defined)
and in this Bond Purchase Agreement, and upon the terms and
conditions contained in this Bond Purchase Agreement, the
Underwriter listed Exhibit A hereto (the "Underwriter"),
hereby offers to purchase from the City of Smyrna, Georgia
(the "City"), $3,510,000 aggregate principal amount of Water
and Sewerage Revenue Refunding Bonds, Series 1989 (the
"Bonds") to be issued under and pursuant to an Ordinance to
be adopted on May 25, 1989 (the "Bond Resolution").
SECTION 1. THE REPRESENTATIONS, WARRANTIES AND AGREEMENTS
OF THE CITY
By your acceptance hereof you hereby represent and war-
rant to, and agree with, the Underwriter that:
(a) You are a government duly organized and
validly existing under the laws of the State of Georgia, and
are authorized by the provisions of the Constitution and the
laws of the State of Georgia to issue the Bonds.
(b) You have complied with all provisions of the
Constitution and laws of the State of Georgia with respect to
the consummation of, and have full power and authority to
consummate all transactions contemplated by this Bond Pur-
chase Agreement, the Bonds, the Bond Resolution, and any and
all other agreements relating thereto and to issue, sell and
deliver the Bonds to the Underwriter as provided herein sub-
ject to the Bonds being validated by the Superior Court of
the County of Cobb, Georgia.
(c) The information contained in the Official
Statement and in any amendment or supplement that may be
authorized for use by you with respect to the Bonds
(hereinafter collectively referred to as the "Official
Statement"), generally and specifically under the headings
"INTRODUCTION", "PURPOSE OF THE SERIES 1989 BONDS", "EXISTING
SYSTEM", "THE CITY", "LITIGATION", "INFORMATION IN THE
APPENDICES", and "CERTIFICATION", relating to City of Smyrna,
including any financial or statistical information is, and as
of the Closing Time (hereinafter defined) will be, true and
does not contain and will not contain any untrue statement of
a material fact and does not omit and will not omit to state
a material fact necessary in order to make the statements
made, in light of the circumstances under which they were
made, not misleading.
(d) Prior to the Closing Time, you will have duly
authorized all necessary action to be taken by you for: (i)
the issuance and sale of the Bonds upon the terms set forth
herein and in the Bond Resolution and the Official Statement;
(ii) the passage and approval of the Bond Resolution pro-
viding for the issuance of and security for the Bonds; (iii)
the approval of the Official Statement and its use by the
Underwriter in the public offering and sale of the Bonds and
the execution of the Official Statement by the Mayor or other
authorized officer; (iv) the execution, delivery, receipt and
due performance of this Bond Purchase Agreement, the Bonds,
the Bond Resolution, and any and all such other agreements
and documents as may be required to be executed, delivered
and received by you in order to carry out, give effect to and
consummate the transactions contemplated hereby and by the
Official Statement; and (v) the carrying out, giving effect
to and consummation of the transactions contemplated hereby
and by the Bond Resolution and the Official Statement. Exe-
cuted counterparts of the Bond Resolution and ten executed
counterparts of the Official Statement will be delivered to
the Underwriter by you at the Closing Time.
(e) There is no action, suit, proceeding, inquiry
or investigation at law or in equity or before or by any
court, public board or body pending or, to the best of your
knowledge, threatened against or affecting you, or, to the
best of your knowledge, is there any basis therefor, wherein
an unfavorable decision, ruling or finding would adversely
affect the transactions contemplated hereby or by the Offi-
cial Statement or the validity of the Bonds, the Bond
Resolution, this Bond Purchase Agreement or any agreement or
instrument to which you are a party or by which you are bound
and which is used or contemplated for use in the consummation
2
of the transactions contemplated hereby or by the Official
Statement.
(f) The execution and delivery of the Official
Statement, this Bond Purchase Agreement, the Bonds, the Bond
Resolution and other agreements contemplated hereby and by
the Official Statement, and compliance with the provisions
thereof, will not conflict with or constitute on your part a
breach of or a default under any agreement, indenture, mort-
gage, lease or other instrument to which you are subject or
by which you are or may be bound and will not conflict with
or be in violation of any existing law, court or administra-
tive regulation, rule, decree or order.
(g) You have not been notified of any listing or
proposed listing by the Internal Revenue Service to the
effect that you are a bond issuer whose arbitrage certifica-
tions may not be relied upon.
(h) Any certificate signed by any of your autho-
rized officers and delivered to the Underwriter shall be
deemed a representation and warranty by you to the Under-
writer as to the statements made therein.
(i) You will send one copy of your audited finan-
cial statements annually to the Underwriter upon their
request as soon as such financial statements become avail-
able.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE BONDS
On the basis of the representations, warranties and
covenants contained herein and in the other agreements
referred to herein, and subject to the terms and conditions
herein set forth, at the Closing Time, the Underwriter agrees
to purchase from you and you agree to sell to the Under-
writer, the Bonds at 98.80% of the face amount thereof plus
accrued interest to the date of delivery.
Payment for the Bonds shall be made by certified or
official bank check or draft in federal funds payable to the
order of the City of Smyrna, Georgia, at the offices of Lex
Jolley & Co., Inc., Atlanta, Georgia, at 10:30 a.m., local
time, on June 28, 1989, or such other place, time or date as
shall be mutually agreed upon by you and the Underwriter.
The date of such delivery and payment is herein called the
"Closing Date", and the hour and date of such delivery and
payment is herein called the "Closing Time." The delivery of
the Bonds shall be made in definitive form, bearing CUSIP
numbers (provided neither the printing of a wrong number
thereon on any Bond nor failure to print a number thereon
shall constitute cause to refuse delivery of any Bond) and
issued to the registered owners thereof. The Bonds shall be
3
available for examination and packaging by the Underwriter at
least 24 hours prior to the Closing Time.
SECTION 3. CONDITIONS TO THE UNDERWRITER'S OBLIGATIONS
The Underwriter's obligations hereunder shall be subject
to the due performance by you of and compliance by you with
your obligations and agreements to be performed hereunder at
or prior to the Closing Time and to the accuracy of your
representations and warranties contained herein, as of the
date hereof and of the Closing Time, and are also subject to
the following conditions:
(a) The Bonds and the Bond Resolution shall have been
duly authorized, executed and delivered in the form hereto-
fore approved by the Underwriter with only such changes
therein as shall be mutually agreed upon by you and the
Underwriter.
(b) At the Closing Time, the Underwriter shall receive:
(i) The opinion, in form and substance
satisfactory to the Underwriter, dated as of
the Closing Date, of Sutherland, Asbill &
Brennan, Bond Counsel, Atlanta, Georgia, the
form of which is attached hereto as Exhibit
C, and Charles E. Camp, Esquire, Cochran,
Camp & Snipes, Counsel to the City, the form
of which is attached hereto as Exhibit D;
(ii) Legal Opinion, in form and substance satis-
factory to the Underwriter, dated as of the
Closing Date, of Sutherland, Asbill & Brennan
with respect to the information contained in
the Official Statement under the headings
"The Series 1989 Bonds", "Security for the
SERIES 1989 Bonds" and "The Bond Ordinance".
(iii) A certificate, satisfactory to the Under-
writer, of the City Administrator of the City
of Smyrna, dated as of the Closing Date, to
the effect that: (A) you have duly performed
all of your obligations to be performed at or
prior to the Closing Time and that each of
your representations and warranties contained
herein is true and complete as of the Closing
Time; (B) you have authorized, by all neces-
sary action, the execution, delivery, receipt
and due performance of the Bonds, the Bond
Resolution and any and all such other agree-
ments and documents as may be required to be
executed, delivered and received by you in
order to carry out, give effect to and
consummate the transactions contemplated
0
hereby and by the Official Statement; (C) no
litigation is pending or to the best of your
knowledge threatened, to restrain or enjoin
the issuance or sale of the Bonds or in any
way affecting any authority for or the
validity of the Bonds, the Bond Resolution or
your existence or powers; and (D) the
execution, delivery, receipt and due
performance of the Bonds, the Bond Resolution
and other agreements contemplated hereby and
by the Official Statement under the
circumstances contemplated thereby and your
compliance with the provisions thereof will
not conflict with or constitute on your part
a breach of or a default under any agreement,
indenture, mortgage, lease or other
instrument to which you are subject or by
which you are or may be bound and will not
conflict with or be in violation of any
existing law, court or administrative
regulation, rule, decree or order;
(iv) A commitment by AMBAC Indemnity Corporation
(AMBAC) or Bond Investors Guaranty Insurance
Corporation (BIGI) or Municipal Bond Investor
Assurance Corporation (MBIA) of a policy of
municipal bond insurance resulting in Aaa/AAA
rating by Standard & Poor's Corporation and
Moody's Investors Service, Inc. respectively;
(v) Such additional certificates as the Under-
writer and its counsel may reasonably request
to evidence performance of or compliance with
the provisions hereof and the transactions
contemplated hereby and by the Official
Statement, all such certificates and other
documents to be satisfactory in form and
substance to the Underwriter.
SECTION 4. THE UNDERWRITER'S RIGHT TO CANCEL
The Underwriter shall have the right to cancel the
Underwriter's obligation hereunder to purchase the Bonds by
notifying you in writing or by telegram of its election to do
so between the date hereof and the Closing Time, if at any
time hereafter and prior to the Closing Time:
(a) A committee of the House of Representatives or the
Senate of the Congress of the United States of
America (the "United States") or said House of Rep-
resentatives or Senate shall have pending before it
5
legislation introduced previous to the Closing Time,
which legislation, if enacted in its form as intro-
duced or as amended, would, in the Underwriter's
sole opinion, have the purpose or effect of imposing
federal income taxation upon revenues or other
income of the general character to be derived by you
or by any similar body or upon interest received on
obligations of the general character of the Bonds,
or the Bonds, or which, in the Underwriter's sole
opinion, materially adversely affects the market
price of the Bonds;
(b) A tentative decision with respect to legislation
shall be reached by a committee of the House of
Representatives or the Senate of the Congress of the
United States or legislation shall be favorably
reported by such committee or be introduced, by
amendment or otherwise, in or be passed by the House
of Representatives or the Senate, or recommended to
the Congress of the United States for passage by the
President of the United States, or be enacted by the
Congress of the United States, or a decision by a
court established under Article III of the
Constitution of the United States or the Tax Court
of the United States shall be rendered, or a ruling,
regulation or order of the Treasury Department of
the United States or the Internal Revenue Service
shall be made or proposed having, in the
Underwriter's sole opinion, the purpose or effect of
imposing, or any other event shall have occurred
which, in the Underwriter's sole opinion, results or
may result in the imposition of, federal income
taxation upon revenues or other income of the
general character to be derived by you or by any
similar body or upon interest received on
obligations of the general character of the Bonds,
or the Bonds, or which, in the Underwriter's sole
opinion, materially adversely affects the market
price of the Bonds;
(c) Any legislation, Resolution, rule or regulation
shall be introduced in or be enacted or imposed by
any governmental body, department or agency in the
State of Georgia, or a decision by any court of
competent jurisdiction within the State of Georgia
shall be rendered which, in the Underwriter's sole
opinion, materially adversely affects the market
price of the Bonds;
(d) A stop order, ruling, regulation or official state-
ment by, or on behalf of, the Securities and
Exchange Commission or any other federal or state
governmental agency having jurisdiction of the sub-
ject matter shall be issued or made to the effect
N.
that the issuance, offering or sale of obligations
of the general character of the Bonds, or the
issuance, offering or sale of the Bonds, including
all underlying obligations, as contemplated hereby
or by the Official Statement, is in violation or
would be in violation of any provision of the fed-
eral securities laws, the state securities laws, the
Securities Act of 1933, as amended and as then in
effect, or the qualification provisions of the Trust
Indenture Act of 1939, as amended and as then in
effect;
(e) Legislation shall be enacted by the Congress of the
United States, or a decision by a court established
under Article III of the Constitution of the United
States shall be rendered, to the effect that
obligations of the general character of the Bonds,
including all the underlying obligations, are not
exempt from registration under or other requirements
of the Securities Act of 1933, as amended and as
then in effect, or the Securities Exchange Act of
1934, as amended and as then in effect, or that the
Bond Resolution is not exempt from qualification
under or other requirements of the Trust Indenture
Act of 1939, as amended and as then in effect;
(f) Any event shall have occurred, or information
becomes known, which, in the Underwriter's sole
opinion, makes untrue in any material respect any
statement or information contained in the Official
Statement, or has the effect that the Official
Statement contains an untrue statement of a material
fact or omits to state a material fact necessary in
order to make the statements made, in light of the
circumstances under which they were made, not mis-
leading;
(g) Additional material restrictions not in force as of
the date hereof shall have been imposed upon trading
in securities generally by a governmental authority
or by any national securities exchange;
(h) The New York Stock Exchange or other national secu-
rities exchange, or any governmental authority,
shall impose, as to the Bonds or obligations of the
general character of the Bonds, any material
- restrictions not now in force, or increase materi-
ally those now in force, with respect to the exten-
sion of credit by, or the charge to the net capital
requirements of, the Underwriter;
(i) A general banking moratorium shall have been estab-
lished by federal, New York or Georgia authorities;
7
(j) A war involving the United States shall have been
declared, or any conflict involving the armed forces
of the United States shall have escalated, or any
other national emergency relating to the effective
operation of government or the financial community
shall have occurred, which, in the Underwriter's
sole opinion, materially adversely affects the mar-
ket price of the Bonds; or
(1) AMBAC BIGI or MBIA shall withdraw its municipal bond
insurance policy on the Bonds prior to the Closing
Time.
SECTION 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
TO SURVIVE DELIVERY
All of your representations, warranties and agreements
shall remain operative and in full force and effect, regard-
less of any investigations made by the Underwriter on its own
behalf, and shall survive delivery of the Bonds to the
Underwriter.
SECTION 6. PAYMENT OF EXPENSES
Unless you and the Underwriter otherwise agree, all
expenses and costs of issuance of the Bonds are to be paid by
the City out of Bond proceeds.
SECTION 7. USE OF OFFICIAL STATEMENT
You authorize the use and distribution of, and will make
available, the Official Statement for the use and distribu-
tion by the Underwriter in connection with the sale of the
Bonds.
SECTION 8. CONTRIBUTION
If the Underwriter suffers any losses, claims, damages,
liabilities or expenses resulting from litigation against the
Underwriter by any owner of any of the Bonds which lawsuit
questions the accuracy and sufficiency of the Official
Statement, the manner in which the Bonds were issued, and any
legal matters relating to issuance of the Bonds, then such
losses, claims, damages, liabilities or expenses shall be
shared by the City and the Underwriter in accordance with the
relative fault of the parties. The relative fault shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact relates
to information supplied by the City or the Underwriter and
the parties' relative intent, knowledge, access to informa-
tion, and opportunity to correct or prevent such statement or
omission. If relative fault cannot be determined, then the
City and the Underwriter shall share in such losses in such
proportion as is appropriate to reflect the relative benefits
8
received by the City and the Underwriter, respectively, from
offering of the Bonds. The relative benefits received by the
City and the Underwriter, respectively, shall be deemed to be
in the same proportion as the total proceeds from the of-
fering (before deducting issuance costs and expenses other
than underwriting discounts and commissions) received by the
City on the one hand bear to the total underwriting discounts
and commissions received by the Underwriter on the other
hand.
SECTION 9. NOTICE
Any notice or other communication to be given to you
under this Agreement may be given by mailing or delivering
the same in writing to Mr. John Patterson, City Manager of
the City of Smyrna, City Hall, Smyrna, Georgia 30081 and any
notice or other communication to be given to the Underwriters
under this Agreement may be given by delivering the same to
Gordon K. Mortin, President, Lex Jolley & Co., Inc., Suite
2500, 34 Peachtree Street, Atlanta, Georgia 30303.
SECTION 10. APPLICABLE LAW; NONASSIGNABILITY
This Agreement shall be governed by the laws of the
State of Georgia. This Agreement shall not be assigned by
you.
SECTION 11. EXECUTION OF COUNTERPARTS
This Agreement may be executed in several counterparts,
each of which shall be regarded as an original and all of
which shall constitute one and the same document.
Accepted as of the date
first above written
Very truly yours,
LEX JOLLEY & CO., INC.
By:
Go don K. Mortin
President
CITY OF SMYRNA
A. Max Bacon, Mayor
9
Exhibit A
to
Bond Purchase Agreement
Underwriter of Bonds
Principal Amount
Lex Jolley & Co., Inc. $3,510,000
Maturity
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Exhibit B
to"
Bond Purchase Agreement
$3,510,000
Series 1989 Bonds
Principal
Amount
$280,000
275,000
290,000
305,000
335,000
350,000
380,000
405,000
430,000
460,000
Interest
Rate
6.60%
6.70
6.75
6.80
6.85
6.90
6.95
7.00
7.00
7.00
Exhibit C
(Legal Opinion
of Sutherland, Asbill & Brennan)
[TO COME]
Exhibit D
(Legal Opinion of Charles E. Camp
(Letterhead of Cochran, Camp & Snipes)
Lex Jolley & Co., Inc.
34 Peachtree St. Suite 2500
Atlanta, Georgia 30303
Sutherland, Asbill & Brennan
3100 First Atlanta Tower
Atlanta, Georgia 30383
Gentlemen:
This opinion is being rendered to you in connection with
the issuance by the City of Smyrna, Georgia (the "City") of
its Water and Sewerage Revenue Refunding Bonds, Series 1989
(the "Bonds") in the aggregate principal amount of
$3,535,000. The Bonds have been issued and delivered pur-
suant to and in accordance with provisions of a Bond Resolu-
tion adopted by the City on May 25, 1989 (the "Bond
Resolution").
As counsel to the City and in connection with the
issuance of the Bonds, we have examined such records and
documents as are necessary in order to render this opinion.
Based on our examination, it is our opinion that:
1. The City is a duly organized and existing political
subdivision under the Constitution and laws of the
State of Georgia.
2. The Bond Resolution was duly adopted by the City on
May 25, in accordance with O.C.G.A. 36-82-63 and is
in full force and effect in the form in which it
was adopted.
Lex Jolley & Co., Inc.
Sutherland, Asbill & Brennan
Page Two
3. The adoption by the City of the Bond Resolution and
the performance by the City of its obligations
thereunder, do not and will not violate any provi-
sion of the Constitution, laws or regulations of
the State of Georgia and are not and will not be in
conflict with any provisions of any charter, by-
laws, Resolution or Resolution of the City and do
not and will not cause any default by the City
under any other agreement to which the City is a
party.
4. No litigation of any nature is now pending, or to
our knowledge, threatened, which seeks to or does
restrain or enjoin the issuance or delivery of the
Bonds or the levy or collection of any utility
charges or fees to pay the interest on or principal
of the Bonds, or in any manner questions the
authority or proceedings for the issuance of the
Bonds or for the collection of said utility charges
or fees, or affects the validity of the Bonds or
the collection of said utility charges or otherwise
affects the transactions contemplated by the
issuance and delivery of the Bonds.
Sincerely,
SUTHERLAND, ASBILL & BRENNAN
3100 FIRST ATLANTA TOWER
ATLANTA, GEORGIA 30383-3001
CABLE: SUTAB ATLANTA 1275 PENNSY LVANIA AVENUE, N.W.
TELECOPIER: (404) 658-8914 (404) 658-8700 WASHINGTON, D.C. 20004-2404
TELEX: 54-2672 (202) 383-0100
June 28, 1989
Mayor and Council
City of Smyrna, Georgia
Re: $3,510,000 City of Smyrna (Georgia) Water and
Sewerage Revenue Refunding Bonds, Series 1989
Ladies and Gentlemen:
We have examined a certified copy of the validation
proceedings, judgment of validation entered on June 19, 1989,
ordinance of the Mayor and Council of the City of Smyrna
adopted on May 25, 1989 (hereinafter referred to as said
ordinance")
, the Escrow Deposit Agreement entered into by and
between the City and Trust Company Bank, Atlanta, Georgia
(hereinafter referred to as "Escrow Agent"), the law and other
documents relating to the City of Smyrna Water and Sewerage
Revenue Refunding Bonds, Series 1989 (hereinafter sometimes
referred to as "Series 1989 Bonds") in the aggregate principal
amount of $3,510,000. Said Series 1989 Bonds are fully
registered bonds without coupons, dated June 1, 1989, in the
denomination of $5,000 or any integral multiple thereof,
transferable to subsequent owners as therein provided, bearing
interest from date at the rate per annum set forth below
opposite each principal maturity, all interest payable
January 1, 1990 and semi-annually thereafter on the lst days of
January and July in each year, and the principal maturing on
the 1st day of July, in the years and amounts, as follows:
Year
Amount
Rate
Year
Amount
Rate
1995
$280,000
6.60%
2000
$350,000
6.90%
1996
$275,000
6.70%
2001
$380,000
6.95%
1997
$290,000
6.75%
2002
$405,000
7.00%
1998
$305,000
6.80%
2003
$430,000
7.00%
1999
$335,000
6.85%
2004
$460,000
7.00%
The Series 1989 Bonds are subject to redemption prior to
their respective maturities as stated in the text of the Series
1989 Bonds and in the manner and upon the terms set forth in
said ordinance.
The Series 1989 Bonds are being issued under authority of
the Constitution of the State of Georgia and the Revenue Bond
Law (Title 36, Chapter 82, Article 3 of the Official Code of
Georgia Annotated, as amended), and pursuant to that certain
ordinance adopted by the Mayor and Council of the City of
Mayor and Council
City of Smyrna
Page 2
Smyrna on October 4, 1984, as ratified, reaffirmed, broadened
and extended by that certain ordinance of August 4, 1986 and
said ordinance, for the purpose of providing funds to be
applied toward the cost of refunding by redemption and payment
the City of Smyrna Water and Sewerage Revenue Bonds, Series
1984, maturing on and after July 1, 1996, and now outstanding
in the aggregate principal amount of $2,900,000, and to pay all
expenses necessary to accomplish the foregoing.
A portion of the proceeds derived from the sale of the
Series 1989 Bonds is being deposited with the Escrow Agent and
is being used and applied, together with funds to be
contributed by the City, simultaneously with the issuance and
delivery of said Series 1989 Bonds, to pay the cost of
acquiring certain direct obligations of the United States of
America and to provide an initial cash balance, all of which
direct obligations and said cash will be held, supervised,
maintained and administered pursuant to the terms of said
Escrow Deposit Agreement. Under the provisions of said Escrow
Deposit Agreement the initial cash and the principal of and
interest on all of said direct obligations so deposited with
the Escrow Agent will be applied on the dates, in the amounts,
and to the extent required by said Escrow Deposit Agreement to
refund all of the City's Water and Sewerage Revenue Bonds,
Series 1984, maturing on and after July 1, 1996, now
outstanding in the aggregate principal amount of $2,900,000
(hereinafter referred to as "Refunded Bonds") by redemption and
payment, all as authorized and provided in said ordinance.
We are relying solely on the opinion of Deemer Davidson
Carter Higgins PC, Certified Public Accountants, that the
principal of and interest on said direct obligations deposited
in trust with the Escrow Agent are scheduled to mature in
amounts and at times to provide funds, which together with said
cash, will be sufficient to refund all of the Refunded Bonds by
paying the principal amount thereof, the premium, and the
interest thereon until the redemption date, all as provided in
said Escrow Deposit Agreement. Thus, provision having been
duly and legally made for the payment in full of said Refunded
Bonds, same are no longer outstanding and the lien on the net
revenues of the City's water and sewerage system as security
for the payment of the Refunded Bonds has been fully and
completely discharged.
The City, pursuant to the ordinance adopted October 4,
1984, has heretofore issued and delivered $4,375,000 principal
amount of Water and Sewerage Revenue Bonds, Series 1984 (the
"Series 1984 Bonds") and provision was made in the ordinance
for the issuance upon certain terms and conditions of
additional bonds ranking on a parity as to lien on the net
Mayor and Council
City of Smyrna
Page 3
revenues of the system with the Series 1984 Bonds. The City
met those terms and conditions of the ordinance of October 4,
1984 and pursuant to the ordinance adopted August 4, 1986 has
heretofore issued and delivered $1,500,000 principal amount of
Water and Sewerage Revenue Bonds, Series 1986 (the "Series 1986
Bonds") ranking on a parity with the Series 1984 Bonds. The
Series 1989 Bonds have been issued in accordance with the terms
and conditions of the ordinances of October 4, 1984 and
August 4, 1986 and rank on a parity with the Series 1984 Bonds
(excluding the Refunded Bonds) now outstanding in the principal
amount of $1,080,000 (hereinafter referred to as "Outstanding
Series 1984 Bonds") and the Series 1986 Bonds now outstanding
in the principal amount of $1,450,000. The ordinance of
October 4, 1984, as ratified, reaffirmed, broadened and
extended by the ordinance of August 4, 1986 and said ordinance,
provides that additional bonds may be issued from time to time,
under certain terms and conditions, ranking pari passu as to
lien on the net revenues of the water and sewerage system with
the lien enjoyed by the Outstanding Series 1984 Bonds, the
Series 1986 Bonds and the Series 1989 Bonds.
The Series 1989 Bonds shall not be deemed to constitute a
debt of the City of Smyrna, nor a pledge of the faith and
credit of said City, and the City is not subject to any
pecuniary liability thereon, and no owner of any of the Series
1989 Bonds shall ever have the right to compel the exercise of
the taxing power of the City to pay the same, or the interest
thereon, or to enforce payment thereof against any property of
the City, nor shall the Series 1989 Bonds constitute a charge,
lien or encumbrance, legal or equitable, upon any property of
the City other than the revenues of the water and sewerage
systemm as now existent and as hereafter added to, extended,
improved and equipped, pledged to the payment of the Series
1989 Bonds and the interest thereon.
We express no opinion with respect to the accuracy,
completeness or sufficiency of the Official Statement, nor any
opinion as to compliance by the City or the underwriters of the
Series 1989 Bonds with any federal or state statute, regulation
or ruling with respect to the sale or distribution of the
Series 1989 Bonds.
In rendering our opinion that the interest on the Series
1989 Bonds is excluded from gross income for federal income tax
purposes, we have relied as to questions of fact material to
our opinion upon certificates and certified proceedings of
public officials, including officials of the City, and
representations of the City with respect to the use of the
Mayor and Council.
City of Smyrna
Page 4
proceeds of the Series 1989 Bonds and the nature and use of the
facilities being financed or refinanced thereby without
undertaking to verify the same by independent investigation.
The City has covenanted in said ordinance that it will
not, subsequent to the date hereof, intentionally use any
portion of the proceeds of the Series 1989 Bonds to acquire
higher yielding investments or to replace funds which were used
directly or indirectly to acquire higher yielding investments,
except as may be otherwise permitted by Section 148 of the
Internal Revenue Code of 1986, as amended (the "Code"). In
rendering our opinion set forth in paragraph (e) below, we have
relied solely on the opinion of Haynes & Miller, Washington,
D.C., Special Tax Counsel, as to the matters set forth therein,
to wit: (i) assuming compliance by the City with the above -
described covenant, the Series 1989 Bonds are not "arbitrage
bonds" within the meaning of Section 148(a) of the Code; and
(ii) the Series 1989 Bonds are not an issue described in
Sections 149(d)(3) and 149(d)(4) of the Code.
We have also examined an executed and registered Series
1989 Bond and we are of the opinion that:
(a) The Revenue Bond Law (Title 36, Chapter 82,
Article 3 of the Official Code of Georgia Annotated, as
amended), is valid and said ordinance provides for
prescribing and revising rates and collecting fees and
charges for the services, facilities and commodities
furnished by the water and sewerage system to the extent
necessary to provide sufficient funds to pay the
reasonable and necessary cost of operating, repairing and
maintaining said system, including any contractual
obligations incurred pertaining thereto, to make the
payments into a special fund designated "City of Smyrna
Water and Sewerage System Sinking Fund" (the "Sinking
Fund") of the amounts required to pay the principal of and
interest on the Outstanding Series 1984 Bonds, the Series
1986 Bonds, the Series 1989 Bonds and any additional bonds
hereafter issued on a parity therewith as the same become
due and payable, either at maturity or by proceedings for
mandatory redemption, and to create and maintain a reserve
for that purpose in a special account designated as "Debt
Service Reserve Account" held with said Sinking Fund, as
well as to create and maintain a reserve for extensions
and improvements to the system.
(b) The lien created on the net revenues derived
from the operation of the water and sewerage system
securing the payment of the principal of and interest on
the Outstanding Series 1984 Bonds, the Series 1986 Bonds
Mayor and Council
City of Smyrna
Page 5
and the Series 1989 Bonds constitutes a first or prior
pledge of said revenues to any heretofore made or that may
hereafter be made, except that the City may issue, from
time to time upon meeting certain terms and conditions as
provided in the ordinance of October 4, 1984, as ratified,
reaffirmed, broadened and extended by the ordinance of
August 4, 1986 and said ordinance, additional bonds or
obligations, and if issued, said bonds shall enjoy a lien
on the net revenues of said system as security for the
payment thereof and interest thereon of equal rank and
dignity with the lien securing the payment of the
Outstanding Series 1984 Bonds, the Series 1986 Bonds and
the Series 1989 Bonds.
(c) The Series 1989 Bonds are valid special
obligations of the City of Smyrna in accordance with the
terms thereof, payable solely from the revenues produced
by the water and sewerage system of said City, including
all future additions and improvements thereto, from the
said Sinking Fund, including the Debt Service Reserve
Account held therein, which said Sinking Fund, by the
ordinance of October 4, 1984, as ratified, reaffirmed,
broadened and extended by the ordinance of August 4, 1986
and by said ordinance, is pledged to and charged with the
payment of the principal of and the interest on the
Outstanding Series 1984 Bonds, the Series 1986 Bonds, the
Series 1989 Bonds and any parity obligations therewith
hereafter issued; and the ordinances of October 4, 1984
and August 4, 1986 and said ordinance contain reasonable
covenants and provisions in accordance with the law in
respect to the extension, improvement, maintenance, repair
and operation of said water and sewerage system.
(d) The interest on the Series 1989 Bonds is exempt
from present income taxation within the State of Georgia.
(e) In reliance on the above -described opinion of
Haynes & Miller and assuming compliance by the City with
the above -described covenant, based on existing statutes,
regulations, rulings and court decisions, interest on the
Series 1989 Bonds (i) is excluded from gross income for
federal income tax purposes and (ii) is not an item of tax
preference for purposes of the federal alternative minimum
tax imposed on individuals and corporations; provided,
however, it should be noted that with respect to
corporations (as defined for federal income tax purposes)
such interest is taken into account in determining
adjusted net book income (adjusted current earnings for
taxable years ending after December 31, 1989) for the
purpose of computing the federal alternative minimum tax
Mayor and Council
City of Smyrna
Page 6
imposed on such corporations. We express no opinion
regarding other federal tax consequences arising with
respect to the Series 1989 Bonds.
Very truly yours,
SUTHERLAND, ASBILL & BRENNAN
By:
NOTICE OF CALL FOR REDEMPTION
CITY OF SMYRNA, (GEORGIA)
WATER AND SEWERAGE REVENUE BONDS,
SERIES 1984
NOTICE IS HEREBY given to the owners of the following
described Water and Sewerage Revenue Bonds of the City of
Smyrna, Georgia, that said bonds have been called for
redemption on July 1, 1995, said bonds being in the aggregate
principal amount of $2,900,000 known as "City of Smyrna Water
and Sewerage Revenue Bonds, Series 1984", dated October 1,
1984, bearing interest from date at the rate per annum set
forth below opposite each principal maturity, all interest
payable January 1, 1985 and semi-annually thereafter on the 1st
days of January and July in each year, and the principal
maturing on the 1st day of July, in the years and amounts, as
follows:
Year
Amount
Rate
Year
Amount
Rate
1996
$215,000
9.60%
1999
$ 285,000
10.00%
1997
$235,000
9.75%
2000
$ 310,000
10.10%
1998
$255,000
9.90%
2004
$1,600,000
10.375%
Funds for the redemption and payment of said bonds and the
interest then due thereon to July 1, 1995 and the required 2%
premium will be available at Trust Company Bank, Atlanta,
Georgia, on July 1, 1995, and said above described bonds should
be presented to said bank for redemption and payment on said
date. Interest on the above described bonds designated for
redemption shall cease to accrue after the redemption date.
This notice is given under and pursuant to an ordinance of
the Mayor and Council of the City of Smyrna adopted on the 25th
day of May, 1989.
is
Mayor, City of Smyrna, Georgia
Attest:
(S E A L)
.4
t
INCUMBENCY CERTIFICATE
I, Melinda Dameron, Clerk of the City of Smyrna, Georgia,
DO HEREBY CERTIFY:
1. The following is a correct list of the names of the
officers of the City of Smyrna who now hold said offices, the
dates of their election or appointment, and the dates of the
beginning and ending of their terms of office.
DATE OF
DATE OF
ELECTION OR
COMMENCEMENT
DATE OF END
NAME/OFFICE
APPOINTMENT
OF TERM
OF TERM
Month Day Year
Month Day Year
Month Day Year
A. Max Bacon,
11/3/87
1/4/88
1/6/92
Mayor
Bob Davis,
11/3/87
1/4/88
1/6/92
Councilman
James M. Hawkins,
11/3/87
1/4/88
1/6/92
Councilman
Kathy Jordan,
11/3/87
1/4/88
1/6/92
Councilwoman
Wade Lnenicka,
11/3/87
1/4/88
1/6/92
Councilman
Bill Scoggins,
11/3/87
1/4/88
1/6/92
Councilman
Jack Shinall,
11/3/87
1/4/88
1/6/92
Councilman
Melinda Dameron,
1/4/88
1/4/88
1/6/92
Clerk
2. All the foregoing officers have duly filed their
oaths of office, and each of them legally required to give bond
or undertaking has filed such bond or undertaking in form and
amount as required by law, and has otherwise duly qualified and
each is the acting officer holding the respective office
immediately following his or her name.
3. The governing body of the City is known as the Mayor
and Council of the City of Smyrna and said governing body meets
in regular session on the 1st and 3rd Monday of each month at
7:30 P.M.
4. The official seal of the City, being the only seal
used in the execution of bonds, certificates, notes and
contracts, is the seal which impression is affixed opposite my
signature upon this certificate.
WITNESS my hand and the official seal of the City of
Smyrna, Georgia, this the 28th day of June, 1989.
Clerk
(S E A L)
I, A. Max Bacon, Mayor of the City of Smyrna, Georgia, do
hereby certify that Melinda Dameron has been duly appointed and
is now Clerk of the City of Smyrna.
Mayor
- 2 -
CERTIFICATE RESPONSIVE TO
SECTION 3(b)(iii) OF THE BOND PURCHASE AGREEMENT
I, John Patterson, City Administrator of the City of
Smyrna, Georgia, do hereby certify that: (A) Capitalized
terms used herein have the meanings assigned to them in the
Bond Purchase Agreement between the City of Smyrna and the
underwriters named in Exhibit A thereto dated May 22, 1989;
(B) the City has duly performed all of its obligations to be
performed at or prior to the Closing Time and each of the
City's representations and warranties contained in the Bond
i
Purchase Agreement is true and complete as of the Closing
Time; (C) the City has authorized, by all necessary action,
I
the execution, delivery, receipt and due performance of the
I
Bonds, the Bond Resolution, and any and all such other
agreements and documents as may be required to be executed,
delivered and received by the City in order to carry out,
give effect to and consummate the transactions contemplated
by the Bond Purchase Agreement and by the Official Statement;
(D) no litigation is pending, or to the best of my knowledge
threatened, to restrain or enjoin the issuance or sale of the i
Bonds or in any way affecting any authority for or the
validity of the Bonds, the Bond Resolution or the existence
or powers of the City; (E) the execution, delivery, receipt
and due performance of the Bonds, the Bond Resolution and i
other agreements contemplated by the Bond Purchase Agreement
and by the Official Statement under the circumstances
i
contemplated thereby and the City's compliance with the
provisions thereof will not conflict with or constitute on
i
the City's part a breach of or a default under any agreement,
indenture, mortagage, lease or other instrument to which the
City is subject or by which the City is or may be bound and
will not conflict with or be in violation of any existing
law, court or administrative regulation, rule, decree or
order.
Witness my hand this the 28th day of June, 1989.
City dministrator
RECEIPT FOR SERIES 1989 BONDS
The undersigned duly authorized representative of Lex
Jolley & Co., Inc. hereby acknowledges that, as designated
representative of the original purchasers, I have this day
received from the Bank South, N.A., Atlanta, Georgia, as Bond
i
Registrar, $3,510,000 aggregate principal amount of City of
Smyrna Water and Sewerage Revenue Refunding Bonds, Series
1989, dated June 1, 1989, in the form of fully registered
i
bonds without coupons, transferable to subsequent owners as
therein provided, bearing interest from date at the rate per
i
annum set forth below opposite each principal maturity, all j
interest payable January 1, 1990 and semi-annually thereafter
on the 1st days of January and July in each year, and the j
pricnipal maturing on the lst day of July, in the years and
amounts, as follows:
Year
Amount
Rate
Year
Amount
Rate
1995
$280,000
6.60%
2000
$350,000
6.90%
1996
$275,000
6.70%
2001
$380,000
6.95%
1997
$290,000
6.75%
2002
$405,000
7.00%
1998
$305,000
6.80%
2003
$430,000
7.00%
1999
$335,000
6.85%
2004
$460,000
7.00%
WITNESS my hand
this the
28th day of
June, 1989.
LEX JOLLEY & CO., INC.
i
i
By•
OFFICER'S CERTIFICATE --BOND REGISTRAR
As to Authentication and Registration
ands as to Receipt ofl° Blank Bonds
I, Michael F. Kemp, Assistant Vice President of Bank
South, N.A., Atlanta, Georgia (the "Bank"), Bond Registrar for
the $3,510,000 aggregate principal amount of City of Smyrna
Water and Sewerage Revenue Refunding Bonds, Series 1989 (the
"Bonds"), consisting of fully registered bonds without
i
coupons, bearing interest from date at the rates per annum and
the principal maturing on the dates and in the amounts as set
I
forth in the schedule attached hereto and marked "Schedule A,"
do hereby certify, as follows:
(1) That $3,510,000 aggregate principal amount of the
Bonds have been duly registered in the name of the owner and a
record thereof was duly made in the Bond Registration Book
kept by the Bank for such purpose.
(2) That each of the Bonds was duly authenticated by an
authorized signatory of the Bank by the manual execution of
the Certificate of Authentication and Registration thereon.
(3) That said Bonds in the aggregate principal amount
of $3,510,000 were delivered this day to Lex Jolley & Co.,
Inc., Atlanta, Georgia, the original purchasers of the Bonds.
(4) That the Bank has received 950 blank Bonds duly
executed on behalf of the City of Smyrna, together with the
certificate of validation pertaining thereto duly executed by
the Clerk of the Superior Court of Cobb County, for use by the
Bank in effecting the delivery of the Bonds on this date and
the subsequent registration of transfer and exchange of the
Bonds, all as is provided in the ordinance adopted by the
Mayor and Council of the City of Smyrna on May 25, 1989 i
authorizing the issuance of the Bonds.
(5) That the Bank has received each of the documents
specified in the Registrar and Paying Agency Agreement,
entered into by and between the Bank and the City of Smyrna,
dated as of June 22, 1989.
WITNESS my hand and the official seal of Bank South,
N.A., Atlanta, Georgia, this the 28th day of June, 1989.
BANK SOUTH, N.A.
Atlanta, Georgia
(S E A L)
By:
Assistant Vice Presi ent
-2-
i
SCHEDULE "A"
$3,510,000 City of Smyrna (Georgia) Water and Sewerage
Revenue Refunding Bonds, Series 1989, dated June 1, 1989, in
the form of fully registered bonds without coupons,
transferable to subsequent owners as therein provided, bearing
interest from date at the rate per annum set forth below
opposite each principal maturity, all interest payable
January 1, 1990 and semi-annually thereafter on the 1st days
of January and July in each year, and the principal maturing
on the 1st day of July, in the years and amounts, as follows:
Year Amount Rate Year Amount Rate
1995 $280,000 6.60% 2000 $350,000 6.90%
1996 $275,000 6.70% 2001 $380,000 6.95%
1997 $290,000 6.75% 2002 $405,000 7.00%
1998 $305,000 6.80% 2003 $430,000 7.00%
1999 $335,000 6.85% 2004 $460,000 7.00%
RECEIPT OF PAYMENT FOR BONDS
GEORGIA, COBB COUNTY
The undersigned, officials of the City of Smyrna, hereby
acknowledge receipt of payment from the purchasers of the
$3,510,000 aggregate principal amount of City of Smyrna Water
and Sewerage Revenue Refunding Bonds, Series 1989, dated
June 1, 1989, (the "Series 1989 Bonds"), said proceeds so
received being:
Principal Amount
Less Discount
Plus Accrued Interest
from June 1, 1989 to
date of delivery
Total
$3,510,000.00
42,120.00
$3,467,880.00
18,103.31
$3,485,983.31
same being the full and complete purchase price of said
Series 1989 Bonds authorized pursuant to the ordinance of the
Mayor and Council of the City of Smyrna adopted on May 25,
1989. The proceeds so received have been applied as follows:
(a) The sum of $3,386,000 has been deposited in trust
with the Trust Company Bank, Atlanta, Georgia, the Paying
Agent Bank for the City of Smyrna Water and Sewerage Revenue
Bonds, Series 1984 (the "Series 1984 Bonds") and shall be
used and applied toward the cost of refunding on July 1, 1995
all of said Series 1984 Bonds maturing on and after July 1,
1996 and now outstanding in the principal amount of
$2,900,000 and to pay certain expenses incident thereto, all
pursuant to the terms and provisions of that certain Escrow
i
1
i
Deposit Agreement of even date herewith between the City and !
said Bank, as Escrow Agent, all as authorized and provided
for in said ordinance of May 25, 1989;
(b) The sum of $18,103.31 has been deposited with the
Trust Company Bank of Cobb County, N.A., Smyrna, Georgia, as
Custodian of the "City of Smyrna Water and Sewerage System
Sinking Fund" and credited to the special account designated
as the "Debt Service Account" to be used and applied toward
the payment of interest on the Series 1989 Bonds coming due
January 1, 1990;
(c) The sum of $23,500 representing the premium on the
Municipal Bond Guaranty Insurance Policy issued with respect
to the Series 1989 Bonds and the Standard & Poor's
Corporation Rating Fee have been paid to the proper party;
and
(d) The sum of $58,380 has been retained by the
original purchasers of the Series 1989 Bonds to be used and
applied on behalf of the City to the payment of the costs and
expenses incurred in connection with the overall undertaking.
IN WITNESS WHEREOF, we have hereunto affixed our
signatures and the official seal of the City of Smyrna,
Georgia, this the 28th day of June, 1989.
i
6UISAXL�
Clerk, -City of Mayor, City of
Smyrna, Georgia Smyrna, Georgia
(S E A L) '
-2-
AUTHENTICATION ORDER
Bank South, N.A.
Corporate Trust Office
Atlanta, Georgia
Re: $3,510,000 City of Smyrna (Georgia)
Water and Sewerage Revenue Refunding Bonds,
Series 1989
Gentlemen:
The City of Smyrna, acting by and through the Mayor and
Council of the City of Smyrna, has sold the above -captioned
bonds to Lex Jolley & Co., Inc., Atlanta, Georgia Atlanta,
Georgia (the "original purchasers") and the undersigned on
behalf of the City has caused said bonds, as described in
"Schedule A" attached hereto and by this reference thereto
made a part hereof, to be delivered to you, as Bond Registrar
i
for said Series 1989 Bonds, and you are hereby authorized and
directed to register and authenticate said Series 1989 Bonds
as requested by the original purchasers and thereafter
deliver said bonds to the designated representative of said
original purchasers upon advice that payment has been duly
made therefor.
WITNESS my hand this 28th day of June, 1989.
CITY OF SM N
By:
Mayor
SCHEDULE "A"
$3,510,000 City of Smyrna (Georgia) Water and Sewerage
Revenue Refunding Bonds, Series 1989, dated June 1, 1989, in
the form of fully registered bonds without coupons,
transferable to subsequent owners as therein provided, bearing
interest from date at the rate per annum set forth below
opposite each principal maturity, all interest payable '
January 1, 1990 and semi-annually thereafter on the lst days j
of January and July in each year, and the principal maturing
on the 1st day of July, in the years and amounts, as follows:
Year
Amount
Rate
Year
Amount
Rate
1995
$280,000
6.60%
2000
$350,000
6.90%
1996
$275,000
6.70%
2001
$380,000
6.95%
1997
$290,000
6.75%
2002
$405,000
7.00%
1998
$305,000
6.80%
2003
$430,000
7.00%
1999
$335,000
6.85%
2004
$460,000
7.00%
EXECUTION, SIGNATURE AND NO -LITIGATION CERTIFICATE
We, the undersigned, being officers of the City of
Smyrna, Georgia, as indicated by the official titles opposite
our respective signatures, DO HEREBY CERTIFY that the
hereinafter described bonds have been officially executed by
the Mayor of the City of Smyrna by use of his facsimile
signature and attested by the Clerk by the use of her
facsimile signature and a facsimile of the official seal of
the City of Smyrna has been imprinted on each of said bonds,
same being $3,510,000 principal amount of revenue bonds,
i
i
designated "CITY OF SMYRNA WATER AND SEWERAGE REVENUE
REFUNDING BONDS, SERIES 1989" (hereinafter sometimes referred
i
to as "Series 1989 Bonds"), dated June 1, 1989, in fully
registered form without coupons, transferable to subsequent
owners as therein provided, in the denomination of $5,000 or
any integral multiple thereof, bearing interest from date at
the rate per annum set forth below opposite each principal
maturity, all interest payable January 1, 1990 and semi-
annually thereafter on the lst days of January and July in
each year, and the principal maturing on the 1st day of July,
in the years and amounts, as follows:
Year
Amount
Rate
Year
Amount
Rate
1995
$280,000
6.60%
2000
$350,000
6.90%
1996
$275,000
6.70%
2001
$380,000
6.95%
1997
$290,000
6.75%
2002
$405,000
7.00%
1998
$305,000
6.80%
2003
$430,000
7.00%
1999
$335,000
6.85%
2004
$460,000
7.00%
WE FURTHER CERTIFY that the facsimile signatures of the
Mayor and Clerk of the City of Smyrna as the same appear on
the bonds are true and accurate facsimile signatures and we
hereby authorize their use on said Series 1989 Bonds.
WE FURTHER CERTIFY that the facsimile seal of the City of
Smyrna which is printed on each of the Series 1989 Bonds is a
true and accurate facsimile of the official seal of the City
of Smyrna and that it is the same seal as that impressed on
this Certificate.
WE FURTHER CERTIFY that the Mayor and Clerk of the City
of Smyrna are authorized to and have duly executed and
delivered the Escrow Deposit Agreement, dated June 28, 1989,
by and between the City of Smyrna and the Trust Company Bank,
Atlanta, Georgia, to said Bank.
WE FURTHER CERTIFY that no litigation of any kind is now
pending or threatened, either in state or federal courts, !
restraining or enjoining the issuance or delivery of said
Series 1989 Bonds, or any proceedings of any kind questioning
the authority under which said bonds are issued, or the terms
and conditions of the ordinance adopted May 25, 1989
authorizing the issuance and delivery of the Series 1989
1
Bonds, or affecting the validity of said Series 1989 Bonds; or
in any manner questioning the prescribing or charging by said
City of fees and charges for services, facilities and
commodities furnished by the City's water and sewerage system
sufficient to provide for the payment of the principal of and
interest on the Series 1989 Bonds as same become due and
�m
CERTIFICATE AS TO USE OF PROCEEDS
AND QUALIFIED TAX-EXEMPT OBLIGATIONS
In connection with the issuance of the $3,510,000
aggregate principal amount of City of Smyrna Water and
Sewerage Revenue Refunding Bonds, Series 1989 (the "Bonds"),
the undersigned does hereby certify as follows:
1. He is City Administrator of the City of Smyrna and as
such is familiar with the operation and use of the existing
water and sewerage facilities of the City of Smyrna.
2. The proceeds to be derived from the sale of the Bonds
(excluding moneys to be used to pay expenses in connection
with the issuance and delivery of the Bonds) are to be used
to provide funds to be applied toward the cost of refunding
by redemption and payment all of the City of Smyrna Water and
Sewerage Revenue Bonds, Series 1984, maturing on or
subsequent to July 1, 1996 and now outstanding in the
aggregate principal amount of $2,900,000, all as more fully
set forth in the ordinance adopted May 25, 1989 authorizing
the issuance of the Bonds.
3. The City's water and sewerage system as now existent
and as hereafter added to extended, improved and equipped
(the "System") is now and will be owned, operated and
maintained by the City.
4. The System serves the general public. No portion of
i
the services and facilities provided by the System are made
available to any one user, or limited group of users, on a
basis other than on the same basis as such services and
facilities are made available to the general public,
recognizing that the rates, fees and charges for such items
may vary among reasonable classifications of users and the
services and facilities provided by the System.
5. There are no output or take -on -pay contracts with any
private persons or entities with respect to the System's
services, facilities or commodities.
6. No portion of the System is or will be leased to any
private persons or entities.
7. No portion of the System is subject to any management
contract with a private person (other than as an employee of
the City) or entity.
8. In the ordinance adopted May 25, 1989 providing for
the issuance and delivery of the Bonds, same have been
designated as "qualified tax-exempt obligations" within the
meaning of Section 265(b)(3) of the Internal Revenue Code of
1986, as amended (the "Code").
9. It is reasonably anticipated that the principal
amount of "qualified tax-exempt obligations" (within the
meaning of Section 265(b)(3) of the Code) to be issued during
the calendar year 1989, including the Bonds, will not exceed
Ten Million Dollars ($10,000,000).
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Certificate this 28th day of June, 1989.
i
John P tterson
City Adininistrator,
City of Smyrna
-2-
payable either at maturity or by proceedings for mandatory
redemption; that neither the existence of said City nor the
titles of the present officers to their respective offices are
being contested; and that no authority or proceedings for the
issuance of said Series 1989 Bonds have been repealed, revoked
or rescinded.
WE FURTHER CERTIFY that none of the revenues derived or
to be derived from the ownership and operation of the water
and sewerage system of the City have been pledged or
hypothecated in any manner or for any purpose other than as
provided and set forth in the ordinance of the Mayor and
Council of the City of Smyrna adopted May 25, 1989 ratifying,
reaffirming, broadening and extending those certain ordinances
of October 4, 1984 and August 4, 1986, and authorizing the
issuance of the $3,510,000 principal amount of Water and
Sewerage Revenue Refunding Bonds, Series 1989, and said Series
1989 Bonds have as security for the payment thereof a lien on
all, or so much as may be necessary, of the net revenues of
the City's water and sewerage system remaining after the
payment of the reasonable and necessary costs of operating,
repairing and maintaining said system, including the payment
of any contractual obligations incurred pertaining to the
operation of said system, ranking on a parity with the lien
created on said net revenues securing the payment of the
City's Series 1984 Bonds heretofore issued pursuant to said
ordinance of October 4, 1984 maturing on or prior to
January 1, 1995 and now outstanding in the aggregate principal
- 3 -
1j
amount of $1,080,000, and the City's Series 1986 Bonds
heretofore issued pursuant to said ordinance of August 4, 1986
now outstanding in the aggregate principal amount of
$1,450,000, which lien constitutes a first or prior lien on
the net revenues of said system, all as more fully set forth
in said ordinance of May 25, 1989.
WITNESS our hands and the official seal of the City of
Smyrna, Georgia, this the 28th day of June, 1989.
SIGNATURE OFFICIAL TITLE EXPIRATION OF TERM
J.
0 , f", *
Mayor, City of 1/6/92
Smyrna, Georgia
Clerk, City of 1/6/92
Smyrna, Georgia
(S E A L)
I, Jay C. Stephenson, Clerk of the Superior Court of Cobb
County, Georgia, DO HEREBY CERTIFY that the certified copy of
the record of the proceedings to validate the $3,510,000
principal amount of the City of Smyrna Water and Sewerage
Revenue Refunding Bonds, Series 1989, in the case of the State
of Georgia vs. City of Smyrna, Civil Action File Number
891364�--99, in the Superior Court of Cobb County, which copy
of the record bears a certificate dated the 19th day of June,
1989, constitutes a true and correct copy of all proceedings
in said case, and that no proceedings of any kind questioning
- 4 -
the issuance or sale of said bonds or the judgment validating
the same have been filed.
I FURTHER CERTIFY to the accuracy of the following certi-
ficate and consent to its use, along with a facsimile of my
signature, on each of the bonds:
STATE OF GEORGIA )
COUNTY OF COBB )
The undersigned Clerk of the Superior Court of Cobb
County, State of Georgia, DOES HEREBY CERTIFY that this bond
was validated and confirmed by judgment of the Superior Court
of Cobb County, Georgia, on the 19th day of June, 1989, and
that no intervention or objection was filed in the proceedings
validating same and that no appeal from said judgment of
validation has been taken.
WITNESS my facsimile signature and seal of the Superior
Court of Cobb County, Georgia.
s/Jay C. Stephenson
Clerk, Superior Court
Cobb County, Georgia
and I have caused a facsimile of the official seal of the
Superior Court of Cobb County to be imprinted on each of said
Series 1989 Bonds.
WITNESS my hand and official seal of the Superior Court
of Cobb County, Georgia, this the 28th day of June, 1989.
Clerk, SupLsrior Court
Cobb County, Georgia'
(S E A L)
- 5 -
1
I hereby certify that the signatures of the above and
foregoing subscribed officers are true and genu'ne.
v�
(S E A L)
June 28, 1989
$3,510,000
City of Smyrna (Georgia)
Water and Sewerage Revenue Refunding Bonds
Series 1989
UNDERWRITER'S CERTIFICATE
The undersigned hereby certifies the following as of the
date of this certificate, relating to the sale and delivery by the
City of Smyrna, Georgia of the above -captioned bonds issue (the
"Bonds").
(1) The above Bonds were purchased for a purchase price of
$3,467,880.00, plus accrued interest. The Bonds were initially
offered to the public at the prices shown on the final Official
Statement for the Bonds, (the "Initial Issue Price"). At least 5%
of each maturity were actually sold to members of the public
(excluding bond houses, brokers and other intermediaries) at the
Initial Issue Price.
(2) In our judgment, the maintenance of a Reserve Account
for the Bonds has been a vital factor in marketing the Bonds at
interest rates and terms comparable to bonds similar to the Bonds.
(3) For purposes of calculating the yield on the Bonds,
there has been taken into account as interest the premium to be paid
on a policy of municipal bond insurance issued by MBIA guaranteeing
timely payment of interest and principal on the Bonds (the
"Insurance Policy"). As a result of the "Aaa/AAA" rating accorded
to the Bonds as a result of such policy the present value of the
premium paid for such policy is less than the present value of the
interest savings attributable thereto, using a present value factor
equal to the yield on the Bonds computed without regard to such
premium.
LEX JOLLEY & CO., INC.
FOR_/ M11
11 01
00, MOO
June 28, 1989
$3,510,000
City of Smyrna (Georgia)
Water and Sewerage Revenue Refunding Bonds
Series 1989
NON -ARBITRAGE CERTIFICATE OF THE CITY OF SMYRNA, GEORGIA
On this date the City of Smyrna, Georgia (the "Issuer") will issue and
deliver the above -described bonds (collectively the "Bonds"). Together with
other officials of the Issuer, the undersigned is charged with the
responsibility of issuing the Bonds.
A. General
(1) At the request of the Issuer, certain schedules (the "Schedules") have
been prepared by Haynes and Miller for purposes of detailing certain relevant
aspects of the refunding program. The sufficiency of the escrow cash flow to
pay the 1984 Bonds (as hereinafter defined) as reflected on these Schedules
has been verified by Deemer Davidson Carter Higgins, P.C., Certified Public
Accountants.
(2) This certificate is executed for the purpose of setting forth the
facts and estimates upon which the Issuer bases its reasonable expectations
that the Bonds are not arbitrage bonds under Section 148 of the Internal
Revenue Code of 1986, as amended, (the "Code") and applicable regulations,
court decisions and published positions of the Internal Revenue Service with
respect thereto. Unless otherwise indicated by the context in which used,
words and phrases used herein have the meaning ascribed to them in the
regulations and capitalized terms have the meaning given in the financing
documents included in the transcript.
(3) The Bonds are being issued:
(a) to advance refund and defease the City of Smyrna Water and
Sewerage Revenue Bonds, Series 1984 maturing July 1, 1996 and
thereafter (the "Refunded Bonds") as more fully described herein; and
(b) to fund the cost of issuance of the Bonds.
(4) As established in the attached certificate of the purchaser, the
initial issue price of the Bonds is as shown on the final Official Statement.
-2 -
B. The Refunding Program
As more fully detailed in the Schedules and in the Escrow Deposit
Agreement, the refunding will be generally implemented as follows:
Simultaneously with the issuance and delivery of the Bonds, the Issuer and
Trust Company Bank, Atlanta, Georgia as escrow agent (the "Escrow Agent"),
will enter into an Escrow Deposit Agreement (the "Escrow Agreement") which
will provide for the creation of an irrevocable trust fund (the "Escrow Fund")
for the purpose of providing for the payment of the principal of, call premium
on and interest on the Refunded Bonds maturing July 1, 1996 and thereafter.
The Issuer will deposit into the Escrow Fund proceeds in the amount of
$3,383,000 to be applied to the purchase of certain United States Treasury
obligations --State and Local Government Series ("SLGs"). $147,303.75.held in
the bond fund for the Refunded Bonds will be transferred to the Escrow Fund
and held as cash to pay the next interest payment due on the Refunded Bonds.
C. The Bonds
(1) The receipts and disbursements with respect to the Bonds, including
issuance costs, underwriting spread and accrued interest, are detailed in the
Schedules.
(2) The principal amounts, interest rates, interest and principal payment
dates, and debt service with respect to the Bonds are detailed in the
Schedules.
(3) (a) Using the initial offering price as the "purchase price" and
taking into account a MBIA bond insurance premium, the yield on the
Bonds is computed in the Schedules to be 6.977191; (the "Bond
Yield").
(b) Using the prices paid for the SLGs as the "purchase price," the
yield on such obligations is computed in the Schedules to be less
than 6.9771910.
(c) For purposes of computing the yield on the Bonds, the accrued
interest, shown on the Schedules has been taken into account.
(4) Moneys deposited to the Debt Service Account within the Sinking Fund,
including subsequent deposits thereto, will be spent within a 13-month period
beginning on the date of deposit and will be depleted at least once a year
except for a reasonable carryover amount not in excess of 1/12 of the annual
debt service with respect to the Bonds. Such funds are designed to achieve a
proper matching of the Issuer's revenues and debt service on the Bonds within
each bond year. Such moneys will be invested without restriction as to yield.
(5) Issuer revenues held as a debt service reserve in -the Sinking Fund for
the Series 1984 Bonds will be maintained in a Debt Service Reserve Account for
the Bonds and the unrefunded portion of the Series 1984 Bonds and invested
without yield restriction.
-3-
(6) A Renewal and Extension Fund was created under the ordinance for the
1984 Bonds. Absent a default this fund is expected to be used for other
purposes and not to pay debt service on the Bonds.
(7) Other than the funds described above, there are no other funds or
accounts of the Issuer which (i) are reasonably expected to be used to pay
debt service on the Bonds or which are pledged as collateral to secure
repayment of debt service on the Bonds and (ii) for which there is a
reasonable assurance that amounts therein will be available to pay debt
service on the Bonds.
(8) There are no other obligations of the Issuer which are issued at
substantially the same time as the Bonds, are sold pursuant to a common plan
of financing together with the Bonds, or are payable out of substantially the
same source of funds (or will have substantially the same claim to be paid out
of substantially the same source of funds) as the Bonds.
(9) Accrued interest with respect to the Bonds will be applied within one
year from the date hereof toward the payment of interest first due on the
Bonds, as detailed in the Schedules. Such monies will be invested without
restriction as to yield.
(10) Neither the City nor any subordinate entity will issue additional
tax-exempt obligations (other than private activity bonds) in excess of
$1,490,000 during the calender year 1989.
D. Miscellaneous
(1) To the best of my knowledge, information and belief, the above
expectations are reasonable.
(2) The Issuer has not been notified of any listing of it by the Internal
Revenue Service as an issuer that may not certify its Bonds.
(3) The Issuer has covenanted to comply with the arbitrage requirements of
Section 148 of the Code.
(4) The Issuer has irrevocably authorized and directed that the Refunded
Bonds maturing July 1, 1996 and thereafter be called on July 1, 1995.
CITY OF SMYRNA, GEORGIA
Mayor