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04-05-1999 Regular MeetingApril 5, 1999 The regular scheduled meeting of Mayor and Council was held at Smyrna City Hall. The meeting was called to order by presiding officer Mayor A. Max Bacon at 7:30 o'clock p.m. All council members were present except Councilman Cramer who was out of town. Also present was City Administrator Howard Smith, City Clerk Melinda Dameron, City Attorney Charles E. Camp, and representatives of the press. Invocation was given by Reverend Lee Delbridge, followed by the pledge to the flag. CITIZENS INPUT: Mayor Bacon recognized Ms. Kathy Scott, advisory member of the South Cobb Arts Alliance Story Telling Project. Ms. Scott stated this program is in reference to the Mable House and further explained that Cobb County has acquired the use of the Mable House through a long- term lease from the trust. Ms. Scott stated she is involved in the history of the Mable family and also their descendants and they will be looking for descendants of the Mathis family, hoping to create a story -telling project based on fact. Ms. Scott asked that if any of the listening audience know of a civic association that would like to be involved in this project, to contact her at 770-426-9794, the South Cobb Arts Alliance at the Mable House or Susan Smith at 770-943-4054. Mayor Bacon recognized Representative Randy Sauder. Representative Sauder thanked the city for allowing him to be present tonight and the citizens for writing and calling him during the legislative session to let them know the issues that were important to them. Representative Sauder asked Mayor Bacon to join him as he presented Mr. Kenneth D. Burts, founder of Key Lime Pie, Inc., with a resolution from the General Assembly honoring him for his civic involvement. Mr. Burts thanked Representative Sauder and the city for the honor. PUBLIC HEARINGS: (A) Variance Request - 1535 Springleaf Court - Reduce Side Yard Setback from 25 Feet to 20 Feet Mr. Smith stated the applicant, Lifestyle Residential Corporation, is requesting the variance to reduce the side yard setback from 25 feet to 20 feet because the original building lot allowed for a 16-foot wide building and all of the units are 20 feet wide and they are therefore requesting the variance. Mr. Smith stated there is a notification signed by the contiguous occupants in recognition of the request. Mayor Bacon stated this is a public hearing and asked if anyone was present in opposition to the granting of the variance request. There was none. Councilman Scoggins asked Mr. John Mankin, representing Lifestyle Residential Corporation, to briefly explain why the variance is being requested. Mr. Mankin stated they have designed a new product for Phase IV of Windy Hill Forest which is adjacent to these lots. He further indicted this is for Peppertree - Unit 2 and these are the remaining lots in Phase 2 of Peppertree and this is the only lot that is sixteen feet wide. Mr. Mankin stated they had designed a 20-foot wide unit to coincide with all of the last development they have done at the location within the last year and a half. Mr. Mankin stated this is the only lot that is 16-feet wide and will require a redesign, architectural design, and they would like to be able to stay with the 20-foot wide lots which are a lot roomier and seem to do better for them. Councilman Scoggins asked how many units have been added to the development and Mr. Mankin responded they have added approximately 35 units in the last eighteen months. Councilman Scoggins made a motion that the variance request at 1535 Springleaf Court to reduce the side yard setback from 25 feet to 20 feet be approved. Councilman Newcomb seconded the motion. Motion was approved 6-0 (Councilman Cramer was absent). (B) Request for Special Land Use Permit - 2390 Atlanta Road Mr. Smith stated the applicant, AirTouch Cellular, has requested permission to erect a tower at 2390 Atlanta Road on a leased .I I acres from the Apostolic Assembly of the Faith of Jesus Christ. Mayor Bacon stated this is a public hearing and asked if anyone was present in opposition to the granting of the request for a special land use permit. There was none. April 5, 1999, meeting - continued Councilman Hawkins asked Mr. Chuck Palmer, of Troutman Sanders, 5200 Nations Bank Plaza, representing AirTouch Cellular to briefly explain the nature of the request. Mr. Palmer stated this proposed site would be the first one in the City of Smyrna and the reason they need the site is due to an engineering (coverage) problem for their customers who live in, work in and drive through the City of Smyrna. Mr. Palmer stated AirTouch does not desire to build any more towers than they have to as it is obviously a huge expenditure, capital expenditure, for them to do that and they would much prefer to stick with their existing system and not build a single other tower. He then stated that unfortunately they feel they have to and presented some engineering studies to the council and stated Ms. Justina Beech is present if there are any questions about the study. Mr. Palmer indicated the problem areas in the City of Smyrna on an engineering diagram and stated the diagram shows the need for a site in this area. Mr. Palmer stated they are hoping to solve the problem areas indicated on the diagram and the first thing they do when they search for a site is to try to find an industrial or heavy commercialized area and stated this site is a heavy commercialized area with Belmont Hills Shopping Center nearby. He stated the site they have selected is a little to the north of Belmont Hills and on a hill behind the former Eckerd Drug Store, which is now a church. Mr. Palmer stated they are over 350 feet off Atlanta Road and they are proposing to build a 180-foot monopole tower. Mr. Palmer stated they would like to build their monopole to handle four tower companies, four wireless providers, and further explained there are seven or eight wireless providers in the Atlanta area at this time. Mr. Palmer stated there is a monopole at the police station and Ms. Payne, real estate department of AirTouch, has met with AT&T and there is nothing more they would like to do than to go on the monopole with AT&T but that will not work. Mr. Palmer stated they can not go on that pole and meet their engineering needs. Mr. Palmer stated what they are proposing and asking the city's permission for is to build their own tower at 180 feet and build it so that at least three other companies can go on there and that would be it for them and expects that to do what they need for the foreseeable future. Mayor Bacon asked about the current utility poles that are in the same general area and asked about the height of them. Mr. Palmer stated the electric distribution poles are about 100 feet in height and the proposed pole would be 180 feet in height. Mayor Bacon asked Mr. Palmer if they propose any type camouflage for the pole. Mr. Palmer stated AirTouch has disguised poles as trees, placed them in church steeples and other creative things to camouflage the towers. He stated at the 180-foot range, one of the things they could do is camouflage the site as lights with outdoor canisters and he provided a picture to the council. Councilman Hawkins asked about the location of the closest AirTouch tower to this site and Mr. Palmer responded at Gann Road in unincorporated Cobb County. Councilman Hawkins stated that according to the engineering diagram, the coverage for the City of Smyrna is actually pretty good but there are a couple of problems with the application. Mr. Hawkins stated the proposed site is on top of a hill and 180 feet up in the air and asked if anyone had contacted Lockheed -Martin to get approval. Mr. Palmer stated they have had an engineer look at that concern and they will have to get FAA approval. He then stated they have had an engineer do a consultant's report and he has indicated that the height is OK from the FAA perspective. Mr. Palmer stated he would be happy to provide that report. Mr. Hawkins asked Mr. Palmer if he had read the ordinance governing the towers and Mr. Palmer stated he had. Mr. Hawkins asked about the ordinance provision that... "any tower over 70 feet high must be at least the height of the tower away from any adjoining structures." Mr. Palmer stated they meet that requirement. Mr. Hawkins questioned the close proximity of the church to the tower location. Mr. Palmer responded stated the ordinance states... "from any adjoining off -site structure" and further stated they are on the Eckerd site, the same site, and they are leasing property from them. Mr. Hawkins asked if Mr. Palmer was saying if the tower fell and hit the church, then it would be alright? Mr. Palmer stated the property owner has determined whether or not they are willing to allow them to go on the site, and AirTouch pays them rent and the property owner assumes the risk or certainly get compensated for that. Mr. Hawkins stated he did not see any measurements to any off -site structures on the map submitted. Mr. Palmer stated they had the surveyor look at the site and that is why they are so far back off Atlanta Road and in the back corner. Mr. Palmer further stated there are some other buildings up there to the side but they are 180 feet away from them - to the north of their site. Mr. Palmer stated the Eckerd site appears to be 180 feet from the proposed site. Mr. Hawkins asked Mr. Palmer if he has read Section 1510 of the Code of Ordinances and Mr. Palmer responded he has. Mr. Palmer stated they tried to address those concerns and felt they had met them in the impact analysis that was submitted to Mr. Broyles. Mr. Hawkins asked specifically about paragraph "O" which states... "you must be 3000 feet away from any parcel of land which is either named or used for residential uses." Mr. Palmer stated the portion of the Code of Ordinances he had stopped with paragraph " N " and the ones he had highlighted were April 5, 1999, meeting - continued paragraphs "A" through "K" . Mr. Palmer stated he would be more than happy to address the ones Mr. Hawkins was talking about but he did not know the distances but would be happy to have a surveyor measure them. Mr: Palmer stated one of the concerns he would have from the AT&T tower perspective is if AT&T builds that structure there then they control an area around that which will prevent anyone else from getting in and that would effectively preclude AirTouch from providing its service as it needs to under its license and that is why they would need to have some relief from that particular requirement. He further stated that is why they propose to build their tower to accommodate three other users so there would be four providers on one monopole. Councilman Lnenicka asked about the conversations with AT&T. Mr. Lnenicka stated when the city allowed construction of that tower, one of the requirements was that they make that tower available to other users so the city did not have a plethora of towers springing up all over downtown Smyrna and that there would be provisions made, not only for public safety use, but for other commercial uses. Mr. Lnenicka stated he would like to know more about what AT&T told AirTouch. Ms. Maureen Payne, AirTouch Cellular, 4150 Ashford Dunwoody Road, stated AT&T has made their tower available to Sprint, and an EMS System as well so the tower is at a maximum and has three carriers and it was not built tall enough to handle additional carriers. Mayor Bacon stated when the city allowed the AT&T tower, they assumed that would take care of all the need for this area for any additional cell towers. Mr. Palmer stated there is no way that anyone could build a 150-foot monopole in the center of the city and expect to accommodate the seven or eight companies that provide service in the metro area. He stated that is not realistic and if they had built a 300-foot tower or a 250-foot tower then that would have been a more realistic expectation of providing their service and they would have been happy about that and would have been over there right away. Mayor Bacon asked why the tower would have to be higher and Mr. Palmer stated you have to have space between each of the companies otherwise you end up with signal interference, so the companies have to be one on top of each other. Councilman Lnenicka asked if there is a spot on the tower that might not be ideal but would be acceptable. Mr. Palmer asked their engineer, Ms. Payne, to address that issue. Ms. Payne stated that unfortunately that tower does not give them the height they need based on the way their system is designed and the coverage needs. Ms. Payne stated they need a 180-foot tower and a 100-foot tower would provide them with some coverage but then they would be required, based on their system design needs, to build another tower - either 100 foot or a 125 foot or a 150 foot tower. She stated the 180-foot tower would provide them with the coverage they need using one location as opposed to multiple locations. Mr. Lnenicka asked if the smaller tower would be less expensive. Ms. Payne stated she could not answer that. Councilman Hawkins asked Councilman Hawkins since the city requires a certain distance from a tower to the nearest adjacent structure, it would seem the corollary would be that if someone were to build a structure would they then impact the ability of an adjacent property owner to ever build a structure on their property due to the fact that a tower could collapse and fall upon that building? Mr. Lnenicka stated he was not sure how the building codes work with that but this is a relatively new situation for the city. Councilman Hawkins stated he did not have an answer to that question but stated it was a good point. Councilman Wood stated Smyrna has at least four towers in the city - Highlands Park, one in unincorporated Cobb County on Gann Road (property completely surrounded by the city), South Cobb Drive south of Concord Road and the multi -use tower that was built primarily to provide emergency service support for the City of Smyrna. Mr. Wood stated there are four towers in a relatively small area - 12.6 square miles. Mr. Wood stated there are already four or five towers behind Belmont Hills Shopping Center relating to radio transmission. Mr. Wood stated his concerns have been raised already but from an aesthetic point of view, it would be a bad location since there is no way to hide it and feels there must be a better location that is not so aesthetically difficult and would not be such a limiting factor as to what the city could attract to that immediate area. Mr. Wood stated he personally feels the city has enough towers and has contributed the city's share to the tower needs. Mr. Palmer stated he would like to submit the FAA study that Mr. Hawkins raised. Mr. Palmer stated if there are concerns about this particular site and concerns about alternatives that might be better, he is sure that AirTouch would be amenable to sitting down and looking at those with the city and seeing if there is a site that would be better than this proposed site. Mr. Palmer stated it was important that they provide service in the city. Mayor Bacon asked if the city allows this to be built, would this prohibit the property owners from around that cell tower to develop their property? Mr. Palmer stated the way other local governments in the metro area have done this is that it does not. April 5, 1999, meeting - continued Councilman Newcomb stated when the city passed the requirement concerning how many feet away from a structure a tower must be, there was a lot of discussion because they wanted no structure off site to be any closer than the height of the antenna in case it were to fall but if the owner of the property wanted to build one that fell on their own building that was their concern. Mr. Newcomb asked if the persons AirTouch planned to lease the property from, actually owned the property. Mr. Palmer stated they are leasing the site from the owners of the property and so it is as if AirTouch is there with their permission. Mr. Newcomb stated he would have to consider that and perhaps consult with the attorneys because it would allow a structure that close to the building. Mr. Newcomb stated the City of Smyrna has made quite an effort to pass changes in the sign ordinance, increases in landscaping requirements, overlay districts which further increase landscaping and reduce signage. Councilman Newcomb stated the proposed location of the tower would be on top of a hill, create a very visual impact and in his opinion is a poor location. Mr. Palmer stated he was not certain, with respect to the distance of the building on their own property, and again the owner has said it is fine if you lease this property from me, I am willing to assume the risk and he is being compensated for that. Mr. Palmer stated the monopoles are designed not to fall but if they do fall they are engineered structurally so they only fall one-third of the distance of the height of the tower - so a 180-foot tower would be designed to fall only for a 60-foot distance. He stated so he felt they met the distance requirement for off -site structures and they would meet that with respect to the structures that are on -site as well. Mr. Palmer stated the ordinance only addresses the distance from off -site structures. Mr. Palmer stated he would like to request the ability to work with the city and if there is something that can be done with respect to this particular site or if there is another area that would meet their engineering needs, they would love to explore that with the city. He further stated if this could be held to allow them an opportunity to do that, they would certainly appreciate that opportunity and would work with whomever the city feels is appropriate in order to do that. Councilman Newcomb stated there is one other issue that he would like to mention. He stated the church is a residential use even though it is on commercial property and if the distance requirements are " x " number of feet that Mr. Hawkins quoted from a residential use, it seems like it has to be further away from that structure that is being used as a church, which is a residential use. Mr. Palmer stated it was his understanding that the way the zoning ordinance is written is to address off -site uses not on -site. Councilman Hawkins stated he sympathizes with AirTouch if they are having service problems. Mr. Hawkins stated the duty of this body is to do what is in the best interests of the citizens of the city and not particularly what is in the best interest of a private company. Councilman Hawkins made a motion that the application for a special land use permit at 2390 Atlanta Road be denied. Mr. Hawkins further stated that rather than hold the application, since in his opinion that was the worst possible site that could have been selected and did not know what could be done to the site to make it acceptable - being highly visible, around a great many other structures, is a 180-foot high tower and sits on a hill - and the application does not meet the basic intent of the code, he is just going to move that the application be denied. Mr. Hawkins stated this does not mean they can not come back before council if they find another location for a tower. Councilman Scoggins seconded the motion. Motion was approved 6-0 (Councilman Cramer was absent). Mayor Bacon stated if there were any other locations that might be better for everybody, he was sure the city would be willing to sit down with AirTouch and talk about them. FORMAL BUSINESS: (A) Appointment to Keep Smyrna Beautiful - Ward 4 Councilman Hawkins made a motion that Lillian McCall be re -appointed to serve as the Ward 4 representative on the Keep Smyrna Beautiful board. Councilman Wood seconded the motion. Motion was approved 6-0 (Councilman Cramer was absent). (B) Appointments to Downtown Development Authority Mayor Bacon asked that this item be tabled to the April 19 council meeting. Councilman Newcomb made a motion that this item be tabled to the April 19, 1999, council meeting. Councilman Lnenicka seconded the motion. Motion was approved 6-0 (Councilman Cramer was absent). April 5, 1999, meeting - continued (C) Approve Renewal of Property and Casualty Insurance - 07/01/99 - 07/01/2000 - Saville and Associates , Mr. Smith stated this issue was reviewed through the Human Resources Committee and it is actually a reduction from the premiums of the previous year. Mr. Smith stated in 1998-1999 the city paid $272,893 and this premium is $272,718 which is a slight reduction and includes the addition of the new fire station, museum and depot, as well as a number of new vehicles. Mr. Smith stated this renewal comes as a recommendation from the Human Resources Committee, chaired by Councilman Wood. Councilman Wood stated the committee reviewed this renewal policy and last year the present vendor submitted a proposal on this for a three-year term which the city had the option to renew annually but with a fixed rate structure. Councilman Wood stated the actual premium will be slightly less even with the additional exposures listed above. Councilman Wood made a motion to approve the renewal of the property and casualty insurance through Saville and Associates, underwritten by Zurich American. Councilman Lnenicka seconded the motion. Motion was approved 6-0 (Councilman Cramer was absent). (D) Approval of $6,645,000 City of Smyrna Water and Sewerage Revenue Bonds - Series 1999 Mr. Smith stated this issue comes about through the work of the Public Works Committee when they asked the city to review the immediate and long-term needs of the water and sewer system due to the growth in the City of Smyrna. Mr. Smith stated the consulting engineers, Welker and Associates, Public Works Director Scott Stokes and City Engineer Ken Hildebrandt, reviewed the cost of improvements and funding of the project. Mr. Smith stated the decision was made to propose a capital expenditure for future construction of water and sewer needs of $4,466,673 million. Mr. Smith further stated that working with the consultants it was also decided that it would be based on interest rates that it would be wise to consider refinancing, based on favorable rates at this time, 1989 bonds as part of this. Mr. Smith stated the remaining total on those bonds is $2,136,105 million with the total amount being discussed for new and refunding bonds of $6,725,189 in water and sewer revenue funds. Councilman Lnenicka asked the city's financial advisor, Gordon Mortin, to come forward and explain the financial details. Mr. Mortin stated each councilperson has received a summary book on the bond issue. Mr. Mortin explained that when he was at the city two weeks ago to discuss this issue, it was explained that this is a relatively small issue from the point of view relative to the billion dollars that the City of Atlanta has just done. Mr. Mortin stated one of the things the city wanted to do was look at doing this on a private placement basis versus the public remarketed issue if it could be done at an interest rate that would at least bring the city to a break even point which has been done. Mr. Mortin stated the bonds were priced on March 23, 1999, and the bonds will be dated the first day of April, 1999, and will be delivered the 26' of April and the total interest cost, which is the permitted reinvestment rate, is 4.28 % . He stated they will use $2,136,105 of the proceeds of the bonds to deposit to the escrow account to call for redemption the Series 1989 bonds that mature in 2000 through 2004. He stated there is approximately $47,000 in the sinking fund for the 1989 bonds that will be used as part of the funds and will end up depositing to the construction fund, including interest earnings during the next two years, $4,650,000. Mr. Mortin stated the total bond issuance cost, including their placement agent fee, is $103,292. He stated from the refunding portion of the 1989 bonds, the city will save $116,551 between now and 2004 and if you bring that amount back to today's dollars it is worth about $106,406. Mr. Mortin explained that what is actually happening is that from the savings from the reduced debt service on the 1989 bonds, the city will more than pay for the issuance expenses of raising what is really $4,650,000 in new money. Mr. Mortin asked the council tonight to have a motion to adopt the bond ordinance which authorizes the issuance of the bonds and the execution of the placement agent agreement. He stated they will start the validation process tomorrow and will be done by City Attorney Chuck Camp. Mr. Mortin stated also present tonight is Terri Finister, Sutherland, Asbill and Brennan, bond counsel for this transaction. Councilman Wood asked Mr. Mortin if these are water/sewer revenue bonds that are paid for from water/sewer revenues and not taxes and Mr. Mortin responded that was correct. Mr. Mortin also stated there is no property tax pledged to or can be levied or collected for these bonds. Mr. Mortin further stated the city is actually only increasing debt service by about April 5, 1999, meeting - continued $220,000 a year and raising some $4,650,000 in new money. He stated the debt expires in 2011, which is only about a twelve-year debt. Councilman Hawkins stated one of the driving reasons for doing this is based on the need for a lot of infrastructure work required in this area when the new retail development is built. Mr. Hawkins stated the city also has a lot of on -going maintenance projects throughout the city and for the last three to four years the city has been paying for those out-of-pocket as we go. Mr. Hawkins stated with the current interest rate being so low, it was decided to go ahead and issue the bonds. Councilman Lnenicka stated that according to the consulting engineer's report, the city has identified thirty separate areas that need infrastructure improvements including approximately 15,400 lineal feet of sewer main replacement; 13,000 lineal feet of water main upgrades; and water and sewer relocations required for the proposed downtown street improvements. He stated the new water mains will replace existing undersized mains thereby improving domestic service and fire protection flows; the proposed sewer improvements will help eliminate costly maintenance, potential overflows and reduce infiltration and inflow costs. Mr. Lnenicka stated he feels this is an appropriate and sound fiscal policy for the city to issue these bonds and reinvest in the infrastructure of the city. Mr. Lnenicka stated that as Mr. Mortin referred to the cost the City of Atlanta is facing in terms of water/sewer and infrastructure reconstruction, he feels it is prudent to do a little bit all along the way and keep things up as opposed to let them deteriorate to a point where the job becomes so massive and the cost so burdensome that the public really doesn't understand how the elected officials could ever let it get to that point. Councilman Lnenicka stated this is this is a progressive, preventative step to keep Smyrna ahead of that kind of curve. Councilman Lnenicka made a motion that the city adopt the 1999 Series Water and Sewer Bonds Ordinance and Placement Agreement. Councilman Wood seconded the motion. Motion was approved 6-0 (Councilman Cramer was absent). Councilman Lnenicka thanked Mr. Mortin for his assistance. COMMERCIAL BUILDING PERMITS: There were none. BID AWARDS: There were none. CONSENT AGENDA: (A) Approval of March 15, 1999, Minutes (B) Approval to Install Three-way Stop Signs at Intersection of King Valley Drive and Queensgate Drive (C) Approval to Purchase Chevrolet Truck (Animal Control Vehicle) - Police Department (D) Approval to Use Council Chambers - Sunday, April 11, 1999 - 6:30 - 9:30 p.m. - Ward 6 Meeting (Cumberland Vail Homeowners Association) (E) Approval to Use Council Chambers - Monday, April 19, 1999 - 1:00 - 5:00 p.m. - Congressman Bob Barr - Field Hearing (F) Approve Renewal of Property and Casualty Insurance - 07-01-99 - 07-01-2000 - Saville and Associates (G) Approval of 1999 Community Development Block Grant (CDBG) Award and Authorize Mayor to Sign Subrecipient Agreement (H) Approval to Install "No Parking" Signs Along Both Sides of Cindy Lane and to Install a "Dead End" Sign at Entrance of Lake Drive and Cindy Lane (I) Approval to Purchase 1999 Ford Taurus from State Contract for Police Department - Detective Division (J) Approval of Resolution - Emergency Telephone Number 9-1-1 (K) Approval to Request Bids - Fire Hose (Fire Department) (L) Approval to Bid/Negotiate as Appropriate - New Furniture for Fire Station (M) Approval to Bid/Negotiate as Appropriate - Rehabilitation of the Weather Warning Sirens (N) Approval to Advertise Abandonment of a Portion of South Argo Road (Existing Right - of -Way) Councilman Lnenicka made a motion the consent agenda be approved. Councilman Wood seconded the motion. Motion was approved 6-0 (Councilman Cramer was absent). April 5, 1999, meeting - continued COMMITTEE REPORTS: Councilwoman Capilouto announced the Falling Waters Subdivision will hold a neighborhood meeting on Wednesday, April 8, 1999, at 7:00 p.m. at the Smyrna Community Center. Councilman Newcomb reported the landscaping in the buffer area and in the median on Spring Road is on going. He stated the city is working to do further landscaping in the median and asked Mr. Smith if additional plantings would be seen in the next couple of weeks. Mr. Smith responded that Ken Hildebrandt, City Engineer and Ann Kirk, Keep Smyrna Beautiful, have been working with Post Landscape on a plan for that area since it is an addition to what the County had originally put in. Mr. Newcomb stated the city is rushing this completion before the weather gets hotter. Mr. Newcomb stated he is pleased to see the landscaping going in and reported that Cobb D.O.T. has the construction company back out there to finish up the Campbell Road/Spring Road intersection. Mr. Newcomb thanked the members of the Smyrna Police Department who spent part of last Friday working on behalf of Special Olympics to raise money by working tables at the Red Lobster. Councilman Scoggins had no report this evening. Councilman Hawkins reported that for the residents of Cindy Lane that were watching tonight, the council approved the installation of "No Parking" signs requested by those residents and he will contact the Public Works Department and schedule the placement of those signs. Councilman Hawkins reported that on March 31, 1999, there was a meeting of the residents of the unincorporated section of Dunn Street in which they were invited to annex into the city. Mr. Hawkins stated there were about 20 residents present at the meeting and some applications for annexation were submitted at the meeting. Mr. Hawkins reported some of the residents took the application home with them and annexation applications will be mailed to those residents who did not attend the meeting. Mr. Hawkins stated the residents would be asked to return their applications before the April 19 council meeting. Councilman Lnenicka announced that John Phagan Durham had passed away recently. Mr. Lnenicka stated Mr. Durham was a long-time resident of the City of Smyrna and a long-time member of the Civil Service Board and gave a lot of service to the City. Mr. Lnenicka stated Mr. Durham will be missed. Councilman Lnenicka commented on a rezoning in Vinings that had recently taken place. Councilman Lnenicka stated that in the March 17 Marietta Daily Journal it was reported that the Cobb County Commissioners rezoned 1.2 acres from Neighborhood Shopping and Low Density Residential R-30 to Multi -family Residential RM-12 for a thirty -unit condominium. Mr. Lnenicka stated he could not imagine the city rezoning that kind of density much less in Vinings and again reiterated that maybe some folks down in Vinings need to think about the protection that the City of Smyrna would afford them in terms of land use planning and development and control over their destiny. He stated the city is a lot closer to them than some of the folks that make those decisions. Councilman Lnenicka announced several neighborhood meetings coming up. He stated on the consent agenda tonight that Sunday, April 11, a meeting at city hall at 7:00 p.m. with the Cumberland Vail Homeowners Association and reminded those folks of the meeting and invited them to attend that annual meeting. Mr. Lnenicka then stated there will be two more meetings will be on the consent agenda for the April 19 council meeting - Tuesday, April 20, at 7:30 p.m. there will be a meeting at city hall of the Paces Ferry North Homeowners Association and on Wednesday, April 21, at 7:30 p.m. a meeting of Campbellwood and Creatwood Forest subdivision. He stated the purpose of these meetings is to talk about issues of concern and in particular with Campbell Wood and Creatwood Forest there is interest in forming a more formal neighborhood association. Mr. Lnenicka stated he would be available to answer questions and will be in attendance at the meetings and looks forward to meeting with those residents. Councilman Wood stated this is a busy time in the city with a lot of citizens participating in a lot of different events. He stated that over the month of March, the city held the Smyrna Night of Comedy, dedication of Lattanzi Field, dedication of new facilities at Tolleson Park, Keep Smyrna Beautiful Awards banquet and this month the city will host the dedication of the museum and welcome center and probably other things as well. Mr. Wood stated that in all of these areas, the city had excellent participation from the citizens and those that have a genuine April 5, 1999, meeting - continued desire to participate in making Smyrna a better place to live and work and raise a family and the city is grateful for that. Mr. Wood stated last week at the Keep Smyrna Beautiful awards banquet many people were recognized for their contributions to this organization and the City of Smyrna and certainly the city has gotten a great deal of recognition in the Keep Smyrna Beautiful programs and related things such as recycling, etc. Mr. Wood stated Larry and Sue Brissey were recognized with a new award - "Distinguished Service Award" - and congratulated them and thanked them for all they do for the community. Mr. Smith announced the annual report will be available next week; the gazebo by the pond at the community center has been landscaped and booked for its first wedding this summer; Jonquil Jog applications are available at city hall; the Arthur Bacon Golf Tournament is coming up in May; Comedy Night held in March was a huge success. Mayor Bacon reported the Smyrna Little League had their opening day ceremonies last week and there were probably between 600 - 800 people attended the event. Mayor Bacon reported the museum and Aunt Fanny's Cabin will be dedicated soon and that will be a special day for everyone. ADJOURNMENT With no further business, the meeting adjourned at 8:48 p.m. I a j&j4 , A. MAX BACON, MAYOR MELINDA DAMERON, CITY CLERK CHARLENE CAPILOU O, WARD 1 RON NEWCOMB, WARD 2 _ C i '/ 7 —jrJAMES M. HAW161�9, WARD 4 /, La ILI'-t//),—, e�;7L r ��7 t:�6� - CHARLES PETE WOOD, WARD 7 ANDERSON, HUNT & COMPANY, P.C. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS JONATHAN F. ANDERSON, CPA DONALD W. HUNT, CPA BRETT J. MGGLUNG, CPA April 5,1999 Mayor and Council of the City of Smyrna Smyrna, Georgia Knox Wall Division of Morgan Keegan & Company, Inc. Atlanta, Georgia Sutherland Asbill & Brennan LLP Atlanta, Georgia SUITE 600- 1950 NORTH PARK PLACE ATLANTA, GEORGIA 30339 (770)952-6557 FAX: (770) 951-2674 Re: $6,645,000 City of Smyrna Water and Sewerage Revenue Bonds, Series 1999 Ladies and Gentlemen: We have examined the books and records of the City of Smyrna with respect to its water and sewerage system (the "System") and hereby certify that the payments covenanted to be made into the "City of Smyrna Water and Sewerage System Sinking Fund" (the "Sinking Fund") created in Paragraph 2 of Section 2 of Article IV of an ordinance adopted by the Mayor and Council of the City of Smyrna (the "City") on October 4, 1984 (the "1984 Ordinance"), authorizing the issuance of $4,375,000 aggregate principal amount of the City's Water and Sewerage Revenue Bonds, Series 1984, as ratified, reaffirmed, broadened and extended in Section 13 of an ordinance adopted by the City on August 4, 1986, authorizing the issuance of $1,500,000 aggregate principal amount of the City's Water and Sewerage Revenue Bonds, Series 1986, Section 11 of an ordinance adopted by the City on May 25, 1989, authorizing the issuance of $3,510,000 aggregate principal amount of the City's Water and Sewerage Revenue Refunding Bonds, Series 1989 (the "Series 1989 Bonds") and Section 12 of an ordinance adopted by the City on May 5, 1997, as supplemented and amended on June 2, 1997, authorizing the issuance of $875,000 aggregate principal amount of the City's Water and Sewerage Revenue Refunding Bonds, Series 1997 (the "Series 1997 Bonds"), are currently being made in the full amount as required and the "Debt Service Account" and "Debt Service Reserve Account" held within the Sinking Fund are at their proper respective balances. Mayor and Council of the City of Smyrna Knox Wall Sutherland Asbill & Brennan LLP April 5, 1999 Page 2 Based on such examination of the System, the net earnings of the System for the period of January 1, 1998 through December 31, 1998 are equal to at least 1.20 times the maximum debt service requirement for any succeeding sinking fund year on all of the outstanding Series 1989 Bonds and Series 1997 Bonds and on the Series 1999 Bonds proposed to be issued. "Debt service requirement" is defined as the amount required in each sinking fund year to pay the principal of and interest on the outstanding Series 1989 Bonds and Series 1997 Bonds and on the Series 1999 Bonds proposed to be issued as the same become due and payable either at maturity or by proceedings for mandatory redemption. "Net earnings" is defined as the gross earnings of the System remaining after the payment of the sums required or permitted to be paid to operate and maintain the System pursuant to the provisions of Paragraph 1 of Section 2 of Article IV of the 1984 Ordinance, but before provisions for depreciation. Very truly yours, p, AN ERSON, HUNT & COMP , P.C. AN ORDINANCE TO PROVIDE FOR THE ACQUISITION BY REDEMPTION, PAYMENT OR OTHERWISE OF THE CITY OF SMYRNA WATER AND SEWERAGE REVENUE REFUNDING BONDS, SERIES 1989 MATURING IN THE YEARS 2000 THROUGH 2O04 HERETOFORE ISSUED AND NOW OUTSTANDING IN THE AGGREGATE PRINCIPAL AMOUNT OF $2,025,000; TO PROVIDE FOR ADDITIONS, EXTENSIONS AND IMPROVEMENTS TO REFUNDING AND IMPROVEMENT THE WATER AND SEWERAGE SYSTEM OF THE CITY OF SMYRNA; TO PROVIDE FOR THE ISSUANCE OF WATER AND SEWERAGE REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 1999, PURSUANT TO AND IN CONFORMITY WITH AN ORDINANCE ADOPTED OCTOBER 4, 1984, AS RATIFIED, REAFFIRMED, BROADENED AND EXTENDED BY ORDINANCES ADOPTED AUGUST 4, 1986, MAY 25, 1989, MAY 5, 1997 AND JUNE 2, 1997; 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, AUGUST 4, 1986, MAY 25, 1989, MAY 5, 1997 AND JUNE 2, 1997; 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 RATIFY AND AUTHORIZE THE EXECUTION AND DELIVERY OF A BOND PLACEMENT AGREEMENT WITH RESPECT TO THE SERIES 1999 BONDS; TO DESIGNATE THE SERIES 1999 BONDS AS "QUALIFIED TAX-EXEMPT OBLIGATIONS" WITHIN THE MEANING OF SECTION 265(b)(3) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED; TO PROVIDE REMEDIES FOR THE OWNERS OF THE SERIES 1999 BONDS; TO PROVIDE FOR THE ANNUAL SUBMISSION OF CERTAIN FINANCIAL INFORMATION AND OPERATING DATA PURSUANT TO RULE 15c2-12 PROMULGATED BY THE SECURITIES ACT OF 1934, AS AMENDED; 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 the "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 (the "System"), 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 the System, as now existent and as same is hereafter added to, extended, 284478.1 improved and equipped, and in anticipation of the revenues from the 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, pursuant to that certain ordinance adopted October 4, 1984 (the "1984 Ordinance"), has heretofore authorized the issuance of, and actually issued and delivered, $4,375,000 aggregate principal amount of its Water and Sewerage Revenue Bonds, Series 1984 (the "Series 1984 Bonds"), which Series 1984 Bonds have been paid in full; and WHEREAS, the City in the 1984 Ordinance pledged and created a first and prior lien on the net revenues of the System remaining after the payment of the reasonable and necessary costs of operating and maintaining the System, as security for the payment of the principal of and interest on the Series 1984 Bonds, and provision was made in the 1984 Ordinance whereby, from time to time upon meeting certain terms and conditions, additional bonds could be issued ranking on a parity as to lien on the revenues of the System with the Series 1984 Bonds and the provisions of the 1984 Ordinance have been carried forward, ratified, reaffirmed, broadened and extended to provide for the issuance of additional bonds as hereinafter described; and WHEREAS, the City met the terms and conditions of the 1984 Ordinance and, pursuant to an ordinance adopted August 4, 1986 (the "1986 Ordinance"), has authorized the issuance of, and actually issued and delivered, $1,500,000 aggregate principal amount of its Water and Sewerage Revenue Bonds, Series 1986 (the "Series 1986 Bonds"), which Series 1986 Bonds have been paid in full; and WHEREAS, pursuant to an ordinance adopted May 25, 1989 (the "1989 Ordinance"), the City authorized the issuance of, and actually issued and delivered, $3,510,000 aggregate principal amount of its Water and Sewerage Revenue Refunding Bonds, Series 1989 (the "Series 1989 Bonds"), dated June 1, 1989, bearing interest from date at the rate per annum set forth below opposite each principal maturity, all interest payable January 1, 1990 and semiannually 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: Y= Amount R= Year Amount Ratt 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 and of the Series 1989 Bonds there is now outstanding $2,360,000 aggregate principal amount thereof, being bonds maturing in the years 1999 through 2004 and the Series 1989 Bonds have as 284478.1 _2_ security for the payment thereof and interest thereon a first and prior lien on the net revenues of the System; and WHEREAS, the City obtained a Municipal Bond Guaranty Insurance Policy from Municipal Bond Investors Assurance Corporation (now known as MBIA Insurance Corporation-- "MBIA") as additional security for the payment of the Series 1989 Bonds; and WHEREAS, pursuant to an ordinance adopted May 5, 1997, as supplemented and amended on June 2, 1997 (collectively, the "1997 Ordinance"), the City authorized the issuance of, and actually issued and delivered, $875,000 original principal amount of its Water and Sewerage Revenue Refunding Bonds, Series 1997, dated May 1, 1997, in the form of a single fully registered bond without coupons registered in the name of Cede & Co., as nominee for The Depository Trust Company, transferable to subsequent owners as therein provided, bearing interest from date at the rate of 5 percent per annum, all interest payable semiannually on the 1st days of January and July in each year, commencing on January 1, 1998, and the principal thereof maturing on the lst day of July, 2004, subject to mandatory sinking fund redemption on July 1, 1998 and on each succeeding July 1 to and including July 1, 2003 with a final maturity on July 1, 2004, and of the Series 1997 Bonds there is now outstanding $775,000 aggregate principal amount thereof, and the Series 1997 Bonds rank on a parity as to lien on the net revenues of the System with the lien securing the payment of the outstanding Series 1989 Bonds; and WHEREAS, the City has received a recommendation from Knox Wall Division of Morgan Keegan & Company, Inc., Atlanta, Georgia (the "Placement Agent") that, due to present market conditions, it is advisable, feasible and in the best interests of the City that the Series 1989 Bonds maturing in the years 2000 through 2004 now outstanding in the aggregate principal amount of $2,025,000 (the "Refunded Bonds") be refunded at this time in order to effect a savings in the debt service requirements on the City's now outstanding water and sewerage revenue obligations and the City has determined, after its own independent study and investigation, that it is in the best interest of the City and its citizens and taxpayers to refund the Refunded Bonds as aforesaid; and WHEREAS, the City has received a further recommendation from the Placement Agent, and the City has after careful study and investigation determined, that the refunding of the Refunded Bonds should be accomplished by making due and legal provision for the redemption on July 1, 1999 of the Series 1989 Bonds maturing July 1, 2000 and thereafter, in the aggregate principal amount of $2,025,000, by paying the principal amount thereof, the 2 percent redemption premium in connection therewith and the interest to accrue thereon until such date of redemption, and the payment of all expenses necessary to accomplish the foregoing; and WHEREAS, a portion of the proceeds derived from the sale of the Series 1999 Bonds, as hereinafter defined and authorized to be issued, will be deposited in trust in a special escrow account, simultaneously with the issuance and delivery of the Series 1999 Bonds, to be held by U.S. Trust Bank, National Association, successor to Reliance Trust Company, the paying agent for the Series 1989 Bonds (the "Series 1989 Paying Agent"), in an amount sufficient to pay the 284478.1 -3- principal of, interest on and redemption premium with respect to the Refunded Bonds on July 1, 1999 and to pay certain expenses in connection with the refunding of the Refunded Bonds and said moneys will be used and applied toward the cost of refunding the Refunded Bonds, as aforesaid, all as hereinafter provided; and WHEREAS, the Mayor and Council of the City of Smyrna (the "Mayor and Council") have heretofore made an investigation of all the facts and circumstances pertaining to the need for adding to, extending, improving and equipping its System so as to adequately provide for the immediate needs of the residents of the City and its environs and they have determined that by the expenditure of approximately $4,650,000 they can add to, extend, improve and equip the System in accordance with, or substantially in accordance with, The City of Smyrna, GA Engineering Report Series 1999 Bond Issue, dated April 1999 and prepared by the City's Consulting Engineers, Welker & Associates, Inc., Marietta, Georgia (the "Engineering Report"); and WHEREAS, it was determined that the most feasible method of raising the funds required to finance the cost of refunding the Refunded Bonds and the cost of the capital improvements to the System now contemplated as well as in the future is for the City to issue $6,645,000 City of Smyrna Water and Sewerage Revenue Bonds, Series 1999 (the "Series 1999 Bonds"), which Series 1999 Bonds will rank on a parity as to lien on the net revenues of the System with the outstanding Series 1989 Bonds (excluding the Refunded Bonds) and the Series 1997 Bonds (collectively, the "Prior Bonds") by the issuance and delivery of water and sewerage revenue bonds for such purpose; and WHEREAS, it was provided in Section 8 of Article IV of the 1984 Ordinance, as ratified, reaffirmed, broadened and extended in Section 16 of the 1986 Ordinance, Section 14 of the 1989 Ordinance and Section 15 of the 1997 Ordinance, that additional revenue bonds or obligations could be issued, from time to time, ranking on a parity as to lien on the revenues of the System with the Prior Bonds, upon meeting certain terms and conditions, which are, in part, as follows: (a) The payments covenanted to be made into the Sinking Fund, as the same may have been enlarged and extended by 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 (as hereinafter defined) of the System for a period of 12 consecutive months out of the 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 1.20 times the maximum debt service requirement for any succeeding sinking fund year on the [Prior] 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 2W7s.1 -4- 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 1.20 times the maximum debt service requirement for any succeeding sinking fund year on the [Prior] 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 the System pursuant to the provisions of Paragraph 1 of Section 2 of Article IV of the 1984 Ordinance, 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 [Prior] 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 [Prior] 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 the 1984 Ordinance for said period to operate, repair and maintain the System, 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 [Prior] Bonds not less than 10 days before any proceedings are taken to actually issue such additional bonds. 284478.1 -5 WHEREAS, as required by the 1984 Ordinance, as ratified, reaffirmed, broadened and extended by the 1986 Ordinance, the 1989 Ordinance and the 1997 Ordinance (collectively, the "Prior Ordinances"), 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 set forth above and a copy of said certificate has been furnished to the designated representative of the original purchasers of the Prior Bonds; and WHEREAS, as required by the Prior Ordinances, a firm of Consulting Engineers has furnished the City with its written report recommending that certain additions, extensions and improvements to the System are feasible and should be made, all as more fully set forth in the Engineering Report, and the Consulting Engineers have also set forth in the Engineering Report the projected net earnings to be derived from the System as defined in Paragraph (d) of Section 8 of Article IV of the 1984 Ordinance, which will be available for debt service payments over the life of the Prior Bonds and the bonds hereinafter authorized to be issued and have indicated the projected coverage of such debt service in each sinking fund year and such written report of the Consulting Engineers has been furnished to the designated representative of the original purchasers of the Prior Bonds; and WHEREAS, the Placement Agent has agreed to place the Series 1999 Bonds with'investors at a price of par plus accrued interest and the City has agreed to pay the Placement Agent a fee of $66,450 for its services; and WHEREAS, upon provision having been duly and legally made for the acquisition of the Refunded Bonds by redemption and payment, the $335,000 aggregate principal amount of Series 1989 Bonds then outstanding and maturing on July 1, 1999 and the $775,000 aggregate principal amount of Series 1997 Bonds then outstanding and maturing mandatorily on July 1 in the years 1999 through 2003 with a final maturity on July 1, 2004 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 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 the Prior Ordinances; and WHEREAS, prior to the actual issuance and delivery of the Series 1999 Bonds, the City will enter into a contract with U.S. Bank Trust, National Association pursuant to which U.S. Bank Trust, National Association will agree to act as Paying Agent and as Bond Registrar (the "Paying Agent" and/or "Bond Registrar") for the Series 1999 Bonds and to perform various functions with respect to the Series 1999 Bonds, including, but not limited to, the authentication of the Series 1999 Bonds by the manual signature of a duly authorized signatory of the 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 1999 Bonds as same become due and payable either at maturity or by proceedings for mandatory redemption; and 284478.1 -6 WHEREAS, the City has entered into a contract, dated April 2, 1952 (the "Water Contract"), with the Cobb County -Marietta Water Authority (the "Authority") which contract has a term of 50 years 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 constitutes an operating charge ranking equally with the other costs of operating and maintaining the System, an executed duplicate original of said contract and said amendment being on file and of record in the permanent records of the Mayor and Council kept in the office of the Clerk of the City and said contract and amendment, by this reference thereto, are incorporated herein and made a part hereof; and WHEREAS, the City has entered into an agreement, dated April 13, 1971 (the "Sewer Contract"), with Cobb County (the "County") which contract has a term of 30 years and 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 System, an executed duplicate original of said agreement being on file and of record in the permanent records of the Mayor and Council kept in the office of the Clerk of the City and said agreement, by this reference thereto, is incorporated herein and made a part hereof; and WHEREAS, the Consulting Engineers have been provided a letter by the Authority stating its willingness to renegotiate the terms of such contract prior to its expiration, as set forth in the Engineering Report, which, by this reference thereto, is incorporated herein. 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 Refunded Bonds maturing on July 1, 2000 and thereafter, outstanding in the aggregate principal amount of $2,025,000, be and the same are irrevocably called for redemption on July 1, 1999 and the owners of said Refunded Bonds should present same for payment on July 1, 1999, and receive the principal thereof, the redemption premium and accrued interest thereon to July 1, 1999. BE IT FURTHER ORDAINED by the authority aforesaid, and it is hereby ordained by authority of the same, that at least 30 days prior to the July 1, 1999 redemption date a notice of call for redemption of the Refunded Bonds being called for redemption on July 1, 1999 signed by an authorized signatory of U.S. Bank Trust, successor to Reliance Trust Company, as Bond Registrar for the Refunded Bonds, shall be mailed, postage prepaid, to all registered owners of the Refunded Bonds being called for redemption whose addresses shall appear upon the books of registration provided therefor, which notice shall be in substantially the following form: 284478.1 -7- V.J NOTICE OF CALL FOR REDEMPTION CITY OF SMYRNA WATER AND SEWERAGE REVENUE REFUNDING BONDS SERIES 1989 NOTICE is hereby given to the owners of the following described revenue bonds that said bonds maturing July 1, 2000 through July 1, 2004 have been called for redemption on July 1, 1999, said bonds being in the aggregate principal amount of $2,025,000 known as "City of Smyrna Water and Sewerage Revenue Refunding Bonds, Series 1989," dated June 1, 1989, bearing interest from date at the rate per annum set forth below opposite each principal maturity, all interest payable January 1, 1990 and semiannually 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: Yg= Amounl R= C USIP No. 2000 $350,000 6.90% 2001 380,000 6.95 2002 405,000 7.00 2003 430,000 7.00 2004 460,000 7.00 Funds for the redemption and payment of said bonds and the interest then due thereon to July 1, 1999 and the required 2 percent premium will be available at U.S. Trust Bank, National Association, Atlanta, Georgia, successor to Reliance Trust Company, Atlanta, Georgia, on July 1, 1999, 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 July 1, 1999 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 5th day of April, 1999. 284478.1 U.S. TRUST BANK, NATIONAL ASSOCIATION, successor to Reliance Trust Company, as Bond Registrar Authorized Signatory 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 1999 Bonds, the sum of $2,089,035 derived from the sale of the Series 1999 Bonds, or such other amount as shall be necessary, plus $47,070 representing the pro rata portion of the debt service account sinking fund accruals applicable to the Refunded Bonds shall be deposited with the Series 1989 Paying Agent, in an account hereby created and designated the "1989 Escrow Account," to pay the principal of, interest on and redemption premium with respect to the Refunded Bonds on July 1, 1999. The moneys so deposited with the Series 1989 Paying Agent and the income derived from such moneys shall be subject to a lien and charge in favor of the owners of, and are hereby pledged to the payment of, the Refunded Bonds and shall be held for the security of such owners until used and applied as hereinafter provided. Any moneys in the 1989 Escrow Account in excess of the amount necessary to pay the principal of, interest on and redemption premium with respect to the Refunded Bonds shall be transferred to the hereinafter described 1999 Construction Fund and applied in accordance with the provisions of Section 15 of this Ordinance relating to the 1999 Construction Fund. BE IT FURTHER ORDAINED by the authority aforesaid, and it is hereby ordained by authority of the same, that the moneys so deposited in trust in the 1989 Escrow Account with the Series 1989 Paying Agent have been calculated as being sufficient and shall be used to refund all of the Refunded Bonds by making the following payments, on the dates and in the amounts, as follows: REFUNDED BONDS D-= Princ na_l Premiu Iutere�sJ TQW 7/l/99 $2,025,000 $40,500 $70,605 $2,136,105 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 the 1984 Ordinance, as ratified, reaffirmed, broadened and extended in Section 16 of the 1986 Ordinance, Section 14 of the 1989 Ordinance and Section 15 of the 1997 Ordinance, having been met and complied with, there be and there is hereby authorized to be issued pursuant to the Prior Ordinances and this Ordinance, the Revenue Bond Law and the Charter of the City, $6,645,000 aggregate principal amount of water and sewerage revenue bonds for the purpose of providing funds to be applied toward the cost of refunding by redemption, payment or otherwise the City of Smyrna Water and Sewerage Revenue Refunding Bonds, Series 1989, maturing on and after July 1, 2000, in the aggregate principal amount of $2,025,000, to finance, in whole or in part, the cost of adding to, extending, improving and equipping the System, acquiring the necessary property therefor, both real and personal, and to pay all expenses necessary to accomplish the foregoing, and said bonds shall be designated as "City of Smyrna Water and Sewerage Revenue 284478.1 -9- Refunding and Improvement Bonds, Series 1999" (the "Series 1999 Bonds"), shall be dated April 1, 1999, shall be initially issued as book -entry only bonds in fully registered form without coupons, shall be in the denomination of $100,000 or any integral multiple of $5,000 in excess thereof, shall be numbered R-1 upward, shall be transferable to subsequent owners as hereinafter provided and shall bear interest from date at the rate per annum set forth opposite each principal maturity, all interest payable semiannually on the 1st days of January and July in each year, commencing on July 1, 1999, and the principal maturing on the 1st day of July, in the years and amounts, as follows: Y= Amount R= Y= Amount Rats 2003 $1,680,000 3.80% 2008 $715,000 4.30% 2004 460,000 4.05 2009 745,000 4.35 2005 630,000 4.10 2010 780,000 4.40 2006 660,000 4.15 2011 290,000 4.50 2007 685,000 4.25 The Series 1999 Bonds maturing July 1, 2003 are subject to mandatory redemption prior to maturity, 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: Y= Amouut 2000 $395,000 2001 415,000 2002 430,000 The foregoing schedule leaves $440,000 principal amount of Series 1999 Bond to be paid July 1, 2003. The principal amount of the Series 1999 Bonds shall be payable at maturity upon presentation and surrender thereof at the principal corporate trust office of U.S. Bank Trust, National Association, Atlanta, Georgia, Paying Agent and Bond Registrar, and payments of interest on the Series 1999 Bonds shall be made by check or draft payable to the registered owner as shown on the bond registration book of the City 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 the bond registration book. Both the principal of and interest on the Series 1999 Bonds shall be payable in lawful money of the United States of America. Section 2. The Series 1999 Bonds shall be executed on behalf of the City by use of the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of the Clerk of the City and the official seal of the City shall be impressed thereon or a facsimile thereof imprinted thereon and the Series 1999 Bonds shall be authenticated by the manual signature of a duly authorized signatory of the Bond Registrar. The Clerk is hereby authorized to certify by the asaa�s.i -10- use of the Clerk's manual or 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 LLP, Bond Counsel, which opinion will be printed on the Series 1999 Bonds to the extent Series 1999 Bonds are printed. The validation certificate to be printed on the Series 1999 Bonds shall be executed by use of the manual or facsimile signature of the Clerk of the Superior Court of Cobb County and the official seal of said court or a facsimile thereof shall be imprinted thereon. In case any signatory whose signature shall appear on the Series 1999 Bonds shall cease to be such signatory before delivery of the Series 1999 Bonds, such signature shall nevertheless be valid and sufficient for all purposes the same as if such signatory had remained in office until such delivery. The Series 1999 Bonds, the certificate of authentication and registration, form of assignment and the certificate of validation to be endorsed upon the Series 1999 Bonds shall be in substantially the following forms, with such variations, omissions and insertions as may be required or permitted by this Ordinance: 284478.1 -11- UNITED STATES OF AMERICA STATE OF GEORGIA CITY OF SMYRNA WATER AND SEWERAGE REVENUE REFUNDING AND IMPROVEMENT BOND SERIES 1999 MATURITY DATE: INTEREST RATE: BOND DATE: CUSIP: April 1, 1999 FOR VALUE RECEIVED, the City of Smyrna (the "City"), a municipal corporation of the County of Cobb, State of Georgia, hereby promises to pay solely from the special fund provided therefor, 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 U.S. Trust Bank, National Association, Atlanta, Georgia, Paying Agent and Bond Registrar (the "Paying Agent" and/or "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, semiannually on the 1st days of January and July in each year (each an "Interest Payment Date"), commencing July 1, 1999, 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 $6,645,000 (the "Series 1999 Bonds"), of like tenor, except as to numbers, denominations, interest rates, dates of maturity and redemption provisions, issued for the purpose of providing funds to be applied toward the cost of refunding by redemption, payment or otherwise the City of Smyrna Water and Sewerage Revenue Refunding Bonds, Series 1989, maturing on and after July 1, 2000, in the aggregate principal amount of $2,025,000 (the "Refunded Bonds"), to finance, in whole or in part, the cost of adding to, extending, improving and equipping the City's water and sewerage system (the "System"), acquiring the necessary property therefor, both real and personal, and to pay all i expenses necessary to accomplish the 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 284478.1 -12- of the City of Smyrna adopted on October 4, 1984, August 4, 1986, May 25, 1989, May 5, 1997 and June 2, 1997 (the "Prior Ordinances") and an ordinance of the Mayor and Council of the City of Smyrna adopted on April 5, 1999 (the "1999 Ordinance" and, together with the Prior Ordinances, the "Ordinances"). The Series 1999 Bonds rank on a parity as to lien on the net revenues of the System, with the City's Water and Sewerage Revenue Refunding Bonds, Series 1989 heretofore issued and delivered pursuant to the ordinance of May 25, 1989 and now outstanding in the aggregate principal amount of $335,000 (excluding the Refunded Bonds, the "Series 1989 Bonds") and the City's Water and Sewerage Revenue Refunding Bonds, Series 1997 heretofore issued and delivered pursuant to the ordinances of May 5, 1997 and June 2, 1997 and now outstanding in the aggregate principal amount of $775,000 (the "Series 1997 Bonds" and, together with the Series 1989 Bonds, the "Prior Bonds") and shall be secured by the same lien on the net revenues of the System. In addition to the Prior Bonds and the Series 1999 Bonds (collectively, the "Bonds"), the City may issue, under certain terms and conditions as provided in the Ordinances, additional revenue bonds or obligations which, if issued, will rank on a parity as to lien on the net revenues of the System with the Bonds. Reference to the 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 1999 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 1999 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 person in whose name this bond is registered on the registration books kept by the bond Registrar shall be deemed to be the owner of this bond for all purposes. The Series 1999 Bonds are being issued by means of a book -entry system, with actual Series 1999 Bonds immobilized at The Depository Trust Company, New York, New York (the "Securities Depository"), or its successor as Securities Depository, evidencing ownership of the Series 1999 Bonds in principal amounts of $100,000 or any integral multiples of $5,000 in excess thereof, and with transfers of Beneficial Ownership effected on the records of the Securities Depository and its participants pursuant to the rules and procedures established by the Securities Depository. Actual Series 1999 Bonds are not available for distribution to the owners of a beneficial interest in the Series 1999 Bond registered in book -entry form (the "Beneficial Owners"), except under the limited circumstances set forth in the 1999 Ordinance. The principal, redemption premium (if any) and interest on the Series 1999 Bonds are payable by the Paying Agent to Cede & Co., as nominee of the Securities Depository. Transfers of principal, redemption premium (if any) and interest payments to participants of the Securities Depository is the responsibility of the Securities Depository; transfers of principal, redemption premium (if any) and interest to Beneficial Owners of the Series 1999 Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of Beneficial Owners. Neither the City nor the Paying Agent is responsible or liable for maintaining, supervising or reviewing the records maintained by the Securities Depository, its participants or persons acting through such participants. If the Series 1999 Bonds are no longer registered to a Securities Depository or its nominee, this bond may be registered as transferred only i upon the registration books kept for that purpose at the principal corporate trust office of the Bond Registrar by the registered owner hereof in person, or by his or her attorney duly authorized in 284478.1 -13- writing, upon presentation and surrender to the Bond Registrar of this bond duly endorsed for registration of transfer or accompanied by an assignment duly executed by the registered owner or his or her attorney duly authorized in writing, and thereupon a new registered bond certificate, in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor. In addition, if the Series 1999 Bonds are no longer registered to a Securities Depository, this bond may be exchanged by the registered owner hereof or his or her duly authorized attorney upon presentation at the principal corporate trust office of the Bond Registrar for an equal aggregate principal amount of Series 1999 Bonds of the same maturity and in any authorized denominations in the manner, subject to the conditions and upon payment of charges, if any, provided in the Ordinances. 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 1999 Bonds are issuable in the form of fully registered bonds in the denomination of $100,000 or any integral multiple of $5,000 in excess 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 1999 Ordinance. The Ordinances provide, among other things, for prescribing and revising rates and collecting fees and charges for the services, facilities and commodities furnished by the System to the extent necessary to produce revenues sufficient to pay the reasonable and necessary costs of operating and maintaining the 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 the 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 to 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 be 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 the 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 other 284478.1 -14- 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 1999 Bonds are not subject to optional redemption prior to maturity. The Series 1999 Bonds maturing July 1, 2003 are subject to mandatory redemption prior to maturity, 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 2000 $395,000 2001 415,000 2002 430,000 The foregoing schedule leaves $440,000 principal amount of the Series 1999 Bonds to be paid July 1, 2003 . Notice designating the Series 1999 Bonds (or the portion of the principal amount of the Series 1999 Bonds in multiples of $100,000 or any integral multiple of $5,000 in excess thereof) to be acquired by redemption shall be mailed, postage prepaid, not more than 60 days nor less than 30 days prior to the redemption date, to all registered owners of Series 1999 Bonds to be redeemed in whole or in part at the addresses which appear in the bond registration book, 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 1999 Bonds so designated for redemption after the redemption date. To the extent and in the manner permitted by the Ordinances, modifications, alterations, amendments, additions and revisions of the provisions of the Ordinances, or of any ordinance supplemental thereto or of the Bonds, may be made by the City with the consent of the owners of at least 65 percent in aggregate principal amount of the 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 the Ordinances authorizing its issuance and in said Revenue Bond Law and any amendments thereto. It is hereby recited and certified that all acts, conditions and things required to be done precedent to and in the issuance of this 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 284478.1 -15- allocation from the anticipated revenues of the System of amounts sufficient to pay the principal of and the interest on all of the 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 the Bonds and the interest thereon. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the 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. 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 April, 1999. CITY OF SMYRNA Attest: By Mayor Clerk (SEAL) Date of Authentication and Registration: CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Bond is one of the Series 1999 Bonds described in the ordinance of April 5, 1999. U.S. TRUST BANK, NATIONAL ASSOCIATION, as Bond Registrar LN Authorized Signatory 284478.1 -16- 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 April, 1999, 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 Cobb County, Georgia. Clerk, Superior Court, Cobb County, Georgia (SEAL) 284478.1 -17- 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 attorney 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. (Signature Guaranteed) Notice: Signature(s) must be guaranteed by an eligible guarantor institution (such as banks, stockbrokers, savings and loan associations and credit unions) with membership in an approved Signature Guarantee Medallion Program pursuant to S.E.C. Rule 17Ad-15. -18- 284478.1 Registered Owner Notice: The signature(s) on this assignment must correspond with the name as it appears on the face of the within bond in every particular without alterations, enlargement or any change whatsoever. Section 3. Only those Series 1999 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 the Bond Registrar, shall be entitled to any benefit or security under this Ordinance and such certificate upon any of the Series 1999 Bonds when duly executed shall be conclusive evidence that such Series 1999 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 1999 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 Series 1999 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 1999 Bonds and for the registration of transfers of the Series 1999 Bonds as herein provided. The transfer of any Series 1999 Bond shall be registered upon the bond registration book upon the surrender and presentation of the Series 1999 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 Series 1999 Bond or Bonds so surrendered, a new Series 1999 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 Series 1999 Bonds so surrendered and of the same maturity. Section 5. Any Series 1999 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 Series 1999 Bonds of the same maturity equal to the principal amount of the Series 1999 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 1999 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 1999 Bonds under this Ordinance. Section 6. If any of the Series 1999 Bonds shall become mutilated, the Bond Registrar in its discretion and at the expense of the owner of such Series 1999 Bond shall authenticate and deliver a new Series 1999 Bond of like tenor registered in the name of the owner in exchange and substitution for such mutilated Series 1999 Bond. If any Series 1999 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 284478.1 -19- 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 Series 1999 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. (a) Upon the initial issuance, the ownership of each Series 1999 Bonds shall be registered in the name of the Securities Depository or the Securities Depository Nominee, and ownership thereof shall be maintained in Book -Entry Form by the Securities Depository for the account of the Agent Members thereof. Initially, each maturity of the Series 1999 Bonds shall be registered in the name of Cede & Co., as the nominee of The Depository Trust Company. Beneficial Owners will not receive Series 1999 Bonds from the Bond Registrar evidencing their ownership interests. Except as provided in subsection (c) of this Section 7, the Series 1999 Bonds may be transferred, in whole but not in part, only to the Securities Depository or the Securities Depository Nominee, or to a successor Securities Depository selected or approved by the or to a nominee of such successor Securities Depository. (b) With respect to Series 1999 Bonds registered in the name of the Securities Depository or the Securities Depository Nominee, neither the City, the Bond Registrar nor the Paying Agent shall have any responsibility or obligation to any Agent Member or Beneficial Owner. Without limiting the foregoing, neither the City, the Bond Registrar nor the Paying Agent shall have any responsibility or obligation with respect to: (i) the accuracy of the records of the Securities Depository, the Securities Depository Nominee or any Agent Member with respect to any Beneficial Ownership interest in the Series 1999 Bonds; (ii) the delivery to any Agent Member, any Beneficial Owner or any other person, other than the Securities Depository or the Securities Depository Nominee, of any notice with respect to the Series 1999 Bonds; or (iii) the payment to any Agent Member, any Beneficial Owner or any other person, other than the Securities Depository or the Securities Depository Nominee, of any amount with respect to the principal, premium, if any, or interest on the Series 1999 Bonds. So long as any Series 1999 Bonds are registered in Book -Entry Form, the City, the Bond Registrar and the Paying Agent may treat the Securities Depository as, and deem the Securities Depository to be, the absolute owner of such Series 1999 Bonds for all purposes whatsoever, including without limitation: (i) the payment of principal, premium, if any, and interest on such Series 1999 Bonds; (ii) giving notices of redemption and other matters with respect to such Series 1999 Bonds; 284478.1 -20- (iii) the selection of Series 1999 Bonds for redemption; (iv) registering transfers with respect to such Series 1999 Bonds; and (v) voting and obtaining consents under the Ordinances. So long as any Series 1999 Bonds are registered in Book -Entry Form, the Paying Agent shall pay all principal of, premium, if any, and interest on the Series 1999 Bonds only to the Securities Depository or the Securities Depository Nominee as shown in the bond register, and all such payments shall be valid and effective to fully discharge the City's obligations with respect to payment of principal of, premium, if any, and interest on the Series 1999 Bonds to the extent so paid. (c) If at any time (i) the City determines that the Securities Depository is incapable of discharging its responsibilities described herein, (ii) the Securities Depository notifies the City or the Paying Agent that it is unwilling or unable to continue as Securities Depository with respect to the Series 1999 Bonds, or (iii) the Securities Depository shall no longer be registered or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation and a successor Securities Depository is not appointed by the City within 90 days after the City receives notice or becomes aware of such condition, as the case may be, then this Section 7 shall no longer be applicable and the City shall execute and the Bond Registrar shall authenticate and deliver Series 1999 Bonds representing the Series 1999 Bonds to the bondholders. Series 1999 Bonds issued pursuant to this subsection (c) shall be registered in such names and authorized denominations as the Securities Depository, pursuant to instructions from the Agent Member or otherwise, shall instruct the Bond Registrar. Upon exchange, the Bond Registrar shall authenticate and deliver such Series 1999 Bonds representing the Series 1999 Bonds to the persons in whose names such Series 1999 Bonds are so registered on the business day immediately preceding the date of such exchange. Section 8. The Series 1999 Bonds shall stand on a parity and shall be of equal dignity with the Prior Bonds, and shall be secured by the lien created pursuant to the provisions of the Prior Ordinances, just as if the Series 1999 Bonds and the Prior Bonds had been issued simultaneously under the same ordinance. Section 9. The Series 1999 Bonds issued hereunder may not be optionally redeemed prior to their respective maturities. The Series 1999 Bonds maturing July 1, 2003 shall be subject to mandatory redemption prior to maturity on July 1, 2000 and on each succeeding July 1 to and including July 1, 2003, 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: 284478.1 -21- Y-L Amount 2000 $395,000 2001 415,000 2002 430,000 The foregoing schedule leaves $440,000 principal amount of Series 1999 Bonds to be paid July 1, 2003. Section 10. If less than all of the Series 1999 Bonds of a single maturity are to be redeemed, the Bond Registrar shall treat any Series 1999 Bond of such maturity outstanding in a denomination of greater than $100,000 principal amount as two or more separate Series 1999 Bonds in the denomination of $100,000 or any integral multiple of $5,000 in excess of $100,000 each and shall assign separate numbers to each for the purpose of determining the Series 1999 Bonds or the portion of such Series 1999 Bonds in a denomination greater than $100,000 to be redeemed by lot. With respect to any Series 1999 Bond called for partial redemption, the registered owner thereof shall surrender such Series 1999 Bond to the Bond Registrar in exchange for one or more Series 1999 Bonds in any authorized denomination of $100,000 principal amount or any integral multiple of $5,000 in excess thereof in the aggregate equal to the unredeemed principal amount of such Series 1999 Bond so surrendered. The Bond Registrar shall furnish the City prior to each mandatory redemption date with its certificate setting forth the Series 1999 Bonds that have been selected for mandatory redemption either in whole or in part on such date. Not less than 30 days before any date upon which any such mandatory redemption is to be made a notice of such redemption signed by a duly authorized signatory of the Bond Registrar designating the Series 1999 Bonds to be redeemed (in whole or in part) shall be filed at the place at which the principal of and interest on the Series 1999 Bonds shall be payable and shall be mailed, postage prepaid, to all registered owners of Series 1999 Bonds to be redeemed (in whole or in part) at addresses which appear upon the bond registration book. It is expressly provided, however, that the failure so to mail any such notice of the mandatory redemption of the Series 1999 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 such Series 1999 Bonds so designated for redemption after the redemption date. Notice having been given in the manner and under the conditions hereinabove provided, the Series 1999 Bonds so designated for redemption or the portion of the Series 1999 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 Series 1999 Bonds so designated for redemption or the portion of the Series 1999 Bonds so designated for partial 284478.1 -22- redemption, interest on the principal amount of said Series 1999 Bonds so designated for redemption shall cease to accrue on the redemption date. Section 11. From the proceeds derived from the sale of the Series 1999 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 the Series 1999 Bonds, to the extent and in the manner herein set forth: (a) The accrued interest received on the Series 1999 Bonds shall be deposited into the Sinking Fund hereinafter referred to in Section 16 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 1999 Bonds coming due on July 1, 1999. (b) The sum of $2,089,035, or such other amount as may be necessary, together with sinking fund accruals on the Refunded Bonds in the amount of $47,070, shall be deposited with the Series 1989 Paying Agent, and shall be used and applied toward the cost of refunding by redemption, payment or otherwise all of the Refunded Bonds in the aggregate principal amount of $2,025,000 and to pay certain expenses incident thereto. (c) The sum of $103,291.66, or such amount as shall be necessary, shall be deposited into the "1999 Expense Account" hereinafter created and used and applied toward the payment by or on behalf of the City of fees, charges and expenses incurred in connection with the issuance and delivery of the Series 1999 Bonds. (d) The balance of the proceeds received from the sale of the Series 1999 Bonds shall be deposited into the special fund hereby created and designated as "City of Smyrna Water and Sewerage System Construction Fund--1999" (the "1999 Construction Fund"). Section 12. Simultaneously with the issuance and delivery of the Series 1999 Bonds, an amount equal to the pro rata portion of the current sinking fund year debt service accruals applicable to debt service on the Refunded Bonds (estimated to be $47,070) shall be deposited in the 1989 Escrow Account held by the Series 1989 Paying Agent, and, together with $2,089,035 of the proceeds of the Series 1999 Bonds, or such other amount as shall be necessary, shall be used to pay the principal of, interest on and redemption premium with respect to the Refunded Bonds on July 1,1999 and such moneys and interest thereon shall be subject to a lien and charge in favor of the owners of the Refunded Bonds and shall be held for the security of such owners until used and applied as herein provided. Section 13. There is hereby created a separate account designated as the " 1999 Expense Account," to be held by the Paying Agent. All payments from the 1999 Expense Account shall be 284478.1 -23- applied at the written direction of the City to the payment of costs and expenses incurred by the City in connection with the issuance and delivery of the Series 1999 Bonds. Moneys remaining in the 1999 Expense Account after the earlier of (i) the payment of all costs and expenses in connection with the Series 1999 Bonds or (ii) the date 90 days after the date of issuance and delivery of the Series 1999 Bonds shall be transferred upon direction of the City to the 1999 Construction Fund and applied to System improvements in accordance with Section 15 hereof or immediately applied to the payment of bond issuance costs. Section 14. The additions, extensions and improvements to the System now contemplated shall be accomplished in accordance, or substantially in accordance, with the Engineering Report. The Engineering Report has been approved and ratified and a copy of said Engineering Report has been recorded in the Minute Book of the Mayor and Council, said Minute Book being kept in the office of the Clerk of the City, and the Engineering Report, by this reference thereto, is incorporated herein and made a part hereof. Section 15. The moneys so deposited into the 1999 Construction Fund as aforesaid, and any other funds acquired for this purpose by gift, donation, grant or otherwise, shall be held by the Depository as hereinafter named in trust for the owners of the Series 1999 Bonds and shall be applied toward the payment of the cost of adding to, extending, improving and equipping the System, in accordance, or substantially in accordance, with the Engineering Report and in accordance with and subject to the provisions and restrictions set forth in this Ordinance and the applicable provisions and restrictions set forth in the Prior Ordinances and the City covenants that it will not cause or permit to be paid from the 1999 Construction Fund any sums represented as aforesaid, except in accordance, or substantially in accordance, with the Engineering Report and the provisions and restrictions set forth in the Prior Ordinances and in this Ordinance. Article III, Section 3 of the 1984 Ordinance, as carried forward, ratified, reaffirmed, broadened and extended by'the 1986 Ordinance, the 1989 Ordinance and the 1997 Ordinance, is hereby amended to provide that moneys on deposit in the 1999 Construction Fund may be invested in pooled investment programs sponsored by the State of Georgia for the investment of local government funds, in addition to the other investments listed in said Section of Article III. U.S. Trust Bank, National Association, Atlanta, Georgia, is hereby designated as Depository for the 1999 Construction Fund herein created. Section 16. As covenanted in Section 1 of Article IV of the 1984 Ordinance, the City will continue to operate the 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" (the "Revenue Fund") created and covenanted to be maintained in the 1984 Ordinance, and into it will deposit all revenues derived from the operation and ownership of the System so long as the Prior Bonds and the Series 1999 Bonds (collectively, the 284478.1 -24- "Bonds") are outstanding and unpaid, or until provision has been duly made for the payment thereof and said revenues shall be from the Revenue Fund as hereinafter provided: (a) There shall first be paid from the Revenue Fund the reasonable and necessary costs of operating, maintaining and repairing the System, including salaries, wages, the payment of any contractual obligations incurred in the operation of the System, cost of materials and supplies, rentals of leased property, real or personal, insurance premiums, audit fees and such other charges as are proper to be made for the purpose of operating, maintaining and repairing the System in accordance with sound business practice, but before making provision for depreciation. (b) The City covenants that it will continue to maintain the Sinking Fund created in Paragraph 2 of Section 2 of Article IV of the 1984 Ordinance, which Sinking Fund now consists of two accounts which are held therein, one of which was created and designated as "Debt Service Account" and the other of which was created and designated as "Debt Service Reserve Account" (the "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 the Debt Service Account for the months of May 1999 and June 1999, after taking into consideration the moneys on deposit therein, an amount equal to one -sixth of the debt service coming due on the Bonds in the sinking fund year ending July 1, 1999, and commencing with the month of July 1999 and from month to month thereafter an amount equal to one -sixth of the maximum debt service requirement on the 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 the Sinking Fund to pay all of said outstanding 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 the Reserve Account, commencing with the month of April 1999, in substantially equal monthly payments, taking into consideration the amount on deposit therein, amounts sufficient to create in the Reserve Account by April 1, 2004 a debt service reserve equal to the maximum debt service requirement coming due in any succeeding sinking fund year on the 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 Bonds falling due in any year as to which there would otherwise be a default and if money is taken from the Reserve Account for the payment of such principal and interest, the money so taken 284478.1 -25- shall be replaced in the Reserve Account from the first moneys in the Revenue Fund thereafter available and not required to be used for maintenance and operation charges 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 the 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 the Sinking Fund in the next succeeding month. (iv) As provided in Paragraph 2 of Section 2 of Article IV of the 1984 Ordinance, all net revenues received by the City from the 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 the 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. Pursuant to the provisions of the Prior Ordinances, SunTrust Bank, Atlanta, Atlanta, Georgia, has been designated and is hereby redesignated as Custodian of the Sinking Fund and said Sinking Fund shall continue to be held and maintained in trust in said bank for the benefit of the owners of the Bonds and any other bonds or obligations hereafter issued ranking on a parity as to lien therewith and the beneficial interest therein shall be considered to be in such owners of the Bonds. As authorized in the Prior Ordinances, the City from time to time may designate a successor Sinking Fund Custodian, provided said Custodian complies with all of the applicable provisions of the Prior Ordinances and this Ordinance. Section 17. 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 16 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 the 1984 Ordinance as "City of Smyrna Water and Sewerage System Renewal and Extension Fund" (the "Renewal and Extension Fund"), all moneys remaining in the 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 the 1984 Ordinance, as hereby ratified and reaffirmed. 284478.1 -26- Pursuant to the provisions of the Prior Ordinances, Regions Bank, N.A., as successor to Smyrna Bank and Trust Co., Smyrna, Georgia, has been designated and is hereby redesignated as Depository of said Renewal and Extension Fund, but the City from time to time may designate a successor Depository of the Renewal and Extension Fund, provided said Depository complies with all of the applicable provisions of the Prior Ordinances and this Ordinance. As provided in the 1984 Ordinance and ratified and reaffirmed by the other Prior Ordinances and this Ordinance, should bonds be hereafter issued ranking as to lien on the revenues of the System junior and subordinate to the lien securing the payment of the 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 the 1984 Ordinance, and all moneys in said Renewal and Extension Fund and all securities held in and for said Renewal and Extension 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 the 1984 Ordinance, as hereby ratified and reaffirmed. Section 18. 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 the System 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 the System on a sound businesslike basis and to make the payments into the Sinking Fund created by the 1984 Ordinance, as herein enlarged and extended in accordance and compliance with the terms, covenants and conditions of the Prior Ordinances and this Ordinance and to create and maintain the Renewal and Extension Fund as provided by Prior Ordinances 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 the 1984 Ordinance, 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 the 1984 Ordinance. Section 19. The City further covenants and agrees that it will not exercise the privilege provided in Article IV, Section 8 of the 1984 Ordinance, as ratified, reaffirmed, broadened and extended in Section 16 of the 1986 Ordinance, Section 14 of the 1989 Ordinance and Section 15 of 2W7s.1 -27- the 1997 Ordinance, of issuing additional bonds or obligations ranking on a parity as to lien on the revenues of the System with the Bonds, unless or until all of the following conditions are met: (a) The payments covenanted to be made into the Sinking Fund, as the same may have been enlarged and extended by any proceedings authorizing the issuance of any additional parity bonds, must be currently being made in the 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 (as hereinafter defined) of the System for a period of 12 consecutive months out of the 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 1.20 times the maximum debt service requirement for any succeeding sinking fund year on the 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 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 1.20 times the maximum debt service requirement for any succeeding sinking fund year on the 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 the System pursuant to the provisions of Paragraph 1 of Section 2 of Article IV of the 1984 Ordinance, 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 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 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 284478.1 -28 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 the 1984 Ordinance for said period to operate, repair and maintain the System, 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 Bonds not less than 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 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 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 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 Prior Ordinances 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 20. All of the applicable terms, conditions and provisions of all other Sections or portions of Sections of Article IV of the 1984 Ordinance not herein specifically referred to are hereby declared applicable to and are broadened and extended so as to cover the Series 1999 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 1999 Bonds as if the Series 1999 Bonds had been originally issued under authority of the Prior Ordinances simultaneously with the Prior Bonds. It is further provided, however, that any money in the Sinking Fund not immediately required to pay the interest coming due January 1 and the principal and interest coming due July 1 on the 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 the 1984 Ordinance. 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 284478.1 -29- 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 Bonds as such interest falls due; and (b) the payment of the principal of the Bonds as same become due and payable, either at maturity or by proceedings for mandatory redemption; and (c) the optional redemption of the Prior Bonds before maturity at the price and under the conditions provided therefor in the 1989 Ordinance; and (d) the purchase of the 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 the 1984 Ordinance) 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 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 21. 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 1984 Ordinance not specifically referred to herein are hereby broadened and extended so as to cover the Series 1999 Bonds issued hereunder and are hereby ratified and reaffirmed as so extended, and which for all purposes apply to the Series 1999 Bonds as if the Series 1999 Bonds had been originally issued under authority of the Prior Ordinances, simultaneously, with the Prior Bonds. Section 22. So long as the Series 1989 Bonds are outstanding under the Ordinances and anything to the contrary in the Prior Ordinances or this Ordinance contained notwithstanding, it is expressly provided that the City shall not purchase obligations of the Federal Land Bank, 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 the 1984 Ordinance, nor shall any supplemental ordinance adopted pursuant to the provisions of Article VIII of the 1984 Ordinance, as ratified, reaffirmed, broadened and extended by the other Prior Ordinances and this Ordinance, requiring the consent of bondholders become effective, unless it shall have obtained the written consent of MBIA and any other issuer of a policy of insurance guaranteeing timely payment of principal and interest on any future issue of parity bonds. Section 23. The City hereby covenants and agrees that it will not, subsequent to the date of the issuance and delivery of the Series 1999 Bonds, intentionally use any portion of the proceeds of the Series 1999 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 the Internal Revenue Code of 1986, as amended (the "Code"), or the regulations promulgated thereunder, including, but not limited to, complying with the requirements of Section 148(f) of the Code and the regulations promulgated thereunder and the payment of rebate, if any, required to be made, and that it will expend the proceeds of the Series 1999 Bonds in compliance with the applicable provisions of Sections 141 to 150, inclusive, of the Code. Anything herein or in the Prior Ordinances notwithstanding, earnings on amounts in any fund or account may, and shall to the extent necessary, be used to make the payments required under this Section 23. 284478.1 -30- Section 24. The Series 1999 Bonds herein authorized to be issued are hereby designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. Section 25. 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 1999 Bonds, as well as such other documents as may be necessary or advisable in connection with the issuance and delivery of the Series 1999 Bonds. Section 26. For the purpose of this Ordinance and pertaining to the Series 1999 Bonds herein authorized to be issued the terms "original purchasers" and "designated representative of the original purchasers" shall be construed to mean Knox Wall Division of Morgan Keegan & Company, Inc., Atlanta, Georgia, its successors or assigns. Section 27. 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 Bonds and any parity bonds therewith hereafter issued as the same become due and payable either at maturity or by proceedings for mandatory redemption. Section 28. For the purpose of this Ordinance and pertaining to the book -entry system, the following terms shall be construed to mean as follows: "Agent Member" shall mean a member of, or participant in, the Securities Depository. "Beneficial Owner" shall mean the owners of a beneficial interest in the Series 1999 Bonds registered in Book Entry Form. "Book -Entry Form" or "Book -Entry System" shall mean, with respect to the Series 1999 Bonds, a form or system, as applicable, under which (i) the ownership of beneficial interests in the Series 1999 Bonds and bond service charges may be transferred only through book -entry and (ii) physical Series 1999 Bonds in fully registered form are registered only in the name of a Securities Depository or its nominee as holder, with physical Series 1999 Bonds in the custody of a Securities Depository. "Securities Depository" means any securities depository that is a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to provisions of Section 17A of the Securities Exchange Act of 1934, operating and maintaining, with its participants or otherwise, a Book -Entry System to record ownership of beneficial interest in bonds and bond service charges, and to effect transfers of bonds in Book -Entry C Form, and means, initially, The Depository Trust Company (a limited purpose trust company), New York, New York. 284478.1 -31- "Securities Depository Nominee" means any nominee of a Securities Depository and shall initially mean Cede and Co., New York, New York, as nominee of The Depository Trust Company. Section 29. The Series 1999 Bonds are being issued by the City in compliance with the conditions necessary for interest income on the Series 1999 Bonds to be excluded from gross income for federal income tax purposes pursuant to the provisions of Section 103(a) of the Code relating to obligations of the State of Georgia or any political subdivision thereof. It is the intention of the City that the interest on the Series 1999 Bonds be and remain excludable from gross income for federal income tax purposes, and, to that end, the City hereby covenants with the holders of the Series 1999 Bonds as follows: (a) That it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the tax exempt status of interest on the Series 1999 Bonds under Section 103 of the Code. (b) That it will not directly or indirectly use or permit the use of any of the proceeds of the Series 1999 Bonds or any other funds of the City or take or omit to take any action in a way that would cause the Series 1999 Bonds to be (i) "private activity bonds" within the meaning of Section 141 of the Code unless such bonds constitute "exempt facility bonds" within the meaning of Section 142(a) of the Code, or (ii) obligations which are "federally guaranteed" within the meaning of Section 149(b) of the Code. (c) That it will not directly or indirectly use or permit the use of any proceeds of the Series 1999 Bonds or any other funds of the City or take or omit to take any action that would cause the Series 1999 Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code. To that end, the City will comply with all requirements of Section 148 of the Code to the extent applicable to the Series 1999 Bonds. In the event that at any time the City is of the opinion that for purposes of this Section it is necessary to restrict or limit the yield on the investment of any moneys held under this Ordinance, the City shall take such action as may be necessary. Section 30. The execution, delivery and performance of the Bond Placement Agreement providing for the placement of the Series 1999 Bonds, by and between the City and the Placement Agent, a copy of which has been presented to the Mayor and Council at this meeting and considered by said Mayor and Council and which is on file and of record with the Clerk of the City, be and the same is hereby ratified, authorized and approved. The Bond Placement Agreement shall be in substantially the form as presented, subject to such minor changes, insertions or omissions as may be approved by the Mayor and Council and the execution of the Bond Placement Agreement by the Mayor and Clerk of the City as hereby authorized shall be conclusive evidence of any such approval. Section 31. The provisions, terms and conditions of this Ordinance shall constitute a contract by and between the City and the owners of the Bonds, and after the issuance of the Series 284478.1 -32- 1999 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 the Prior Ordinances 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 the 1984 Ordinance, Section 16 of the 1986 Ordinance, Section 14 of the 1989 Ordinance, Section 15 of the 1997 Ordinance and Section 19 of this Ordinance, shall in nowise conflict with the terms and conditions of the Prior Ordinances or this Ordinance, but shall for all legal purposes contain all the covenants, agreements and provisions of the Prior Ordinances and this Ordinance for the equal protection and benefit of all owners of the Bonds. Section 32. At the request of the Placement Agent and in order to assist the Placement Agent in complying with its obligations under the Rule, the City hereby covenants and agrees that it will, to the extent allowed by applicable law, comply with and carry out all of the provisions of the Continuing Disclosure Certificate to be executed by the City and dated as of the date of the issuance and delivery of the Series 1999 Bonds, as originally executed and as it may be amended from time to time in accordance with its terms (the "Disclosure Certificate"). Notwithstanding any other provision of this 1999 Ordinance, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered a default under the 1999 Ordinance, and under no circumstances shall such failure affect the validity or the security for the payment of the Series 1999 Bonds. It is expressly provided, however, that any beneficial owner of the Series 1999 Bonds may take such action, to the extent and in such manner as may be allowed by applicable law, as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the City to comply with its obligations under this Section. The cost to the City of performing its obligations set forth in this Section shall be paid solely from funds lawfully available for such purpose and nothing set forth herein or in the Disclosure Certificate shall obligate the levy of any tax to comply with the City's obligations under this Section. Section 33. The Series 1999 Bonds herein authorized shall be validated 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. 284478.1 -33- Section 34. 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: r Mayor, City of Smyrna, Georgia 284478.1 -34- CLERK'S CERTIFICATE GEORGIA, COBB COUNTY I, Melinda Dameron, Clerk of the City of Smyrna, Georgia, DO HEREBY CERTIFY that the foregoing pages constitute a true and correct copy of the ordinance adopted by the Mayor and Council of the City of Smyrna, at an open public meeting duly called and lawfully assembled at 7:30 P.M., on the 5th day of April, 1999, authorizing the issuance of $6,645,000 City of Smyrna Water and Sewerage Revenue Refunding and Improvement Bonds, Series 1999, the original of said ordinance being duly recorded in the Minute Book of said Mayor and Council, which Minute Book is in my custody and control. I do hereby further certify that the following members of the Mayor and Council were present at said meeting: and that the following members were absent: and that said ordinance was duly adopted by a vote of Aye 6 Nay _ 0 Abstain 0 . WITNESS my hand and the official seal of the City of Smyrna, Georgia, this the day of April, 1999. l .Wu. _.. (SEAL) 284478.1 THE CITY OF SMYRNA, GA o ,•' g' 6TY OF ENGINEERING REPORT SERIES 1999 BOND ISSUE APREL 5, 1999 Welker & Associates, Inc. j Engineers Since 1945 I 445 Mange' Street TT Manetta, Georgia 30060 Phone: (770) 422-1902 TABLE OF CONTENTS LISTOF TABLES......................................................................................•....................... i CHAPTER1 - SCOPE AND PURPOSE............................................................................1 CHAPTER2 - BACKGROUND........................................................................................2 CHAPTER-3 - EXISTING SYSTEM CHAPTER4 - CONTRACTS............................................................................................5 CHAPTER 5- WATER USE, SYSTEM RATES, AND PROJECTED GROWTH ..........7 CHAPTER 6 - PROJECT DESCRIPTION......................................................................11 CHAPTER 7 - FINANCIAL ANALYSIS.........................................................................12 CHAPTER 8 - SUMMARY AND RECOMMENDATIONS..........................................18 LIST OF TABLES TABLE 2-1: U.S. CENSUS POPULATION......................................................................2 TABLE 5-1: HISTORIC AND PROJECTED CUSTOMERS............................................8 TABLE 5-2: WATER AND SEWER RATES...................................................................9 TABLE 5-3: CITY OF SMYRNA WATER AND SEWER RATES.................................9 TABLE 5-4: CITY OF SMYRNA BASE RATES...........................................................10 TABLE 5-5: RATE COMPARISON BASED ON A 7,000 GALLON CONSUMPTION..........................................................................................10 TABLE 7-1: REVENUE AVAILABLE FOR DEBT SERVICE - FY 1998 ....................14 TABLE 7-2: PROJECTED REVENUE FROM WATER AND SEWERAGE SYSTEMOPERATIONS............................................................................15 TABLE 7-3: PROJECTED EXPENSES OF THE WATER AND SEWERAGE SYSTEM......................................................................................................16 TABLE 7-4: PROJECTED REVENUE AVAILABLE FOR DEBT SERVICE ANDCOVERAGE......................................................................................17 1 CHAPTER 1 SCOPE AND PURPOSE The City of Smyrna is proposing to issue $6,645,000 in revenue bonds. The proceeds from the bonds will be used to upgrade, expand and relocate portions of the City's water and sewer infrastructure. The City's last major revenue bond for water and sewer improvements was in 1989. Since that time, the City has continued to upgrade their system through annual contracts, utilizing system revenues. Currently, the City's Capital improvement plan has identified approximately $4,650,000 in new water and sewer needs. These improvements include system rehabilitation, upgrades, extensions and relocations. The purpose of this report is to evaluate the financial requirements and revenue potential of the City in order to determine if adequate funds are available to finance the proposed improvements to the water and sewer systems. CHAPTER 2 BACKGROUND The City of Smyrna is located ten miles northwest of the City of Atlanta and is the fourth largest city in the Metro Atlanta area. The City of Smyrna is also the second fastest growing city in Cobb County and has experienced exceptional growth over the past several decades. Between 1960 and 1990, Smyrna's population grew from 10,157 to 30,981; which was a 205% percent increase. TABLE 2-1 U. S. CENSUS POPULATION YEAR POPULATION PERCENT INCREASE 1960 10,157 - 1970 19,157 89% 1980 20,312 6% 1990 30,981 53% 1997* 36,348 17% U. S. Census of Population Estimates - City Files With the City's growth has come the need to expand the water and sewerage system infrastructure in order to adequately provide for the current and future population. CHAPTER 3 EXISTING SYSTEM WATER SYSTEM The City of Smyrna purchases all of its water supply from the Cobb County -Marietta Water Authority (CCMWA) under a fifty year contract. The water contract expires April 2, 2002. Prior to the expiration of the existing contract, the City will renegotiate with the CCMWA to extend the existing agreement. The CCMWA is a large regional wholesaler of water that was established in 1953. The CCMWA draws water from both the Chattahoochee River and the Lake Allatoona Reservoir. The City of Smyrna's water distribution system consists of a large network of various sized pipes and meters that serve all of the City and some areas outside of the City. The water distribution system is continually expanding and upgrading and it consists of approximately 180 miles of pipe. Presently, the City purchases 4.3 million gallons per day (MGD) of water from CCMWA. SEWERAGE SYSTEM The City of Smyrna, under a thirty year contract with the Cobb County Water System (CCWS), sends all of its sewage to the Cobb County system for treatment. The contract expires on April 13, 2001 and Smyrna can renegotiate the contract prior to this date. The CCWS maintains approximately 1,700 miles of sewer lines, 56 pump stations, and four wastewater treatment plants. Smyrna is served by the CCWS's South Cobb and R. L. Sutton Wastewater Treatment Plants. Both of these plants have a 40 MGD capacity and are well equipped to handle Smyrna's wastewater flows. Smyrna's sewage collection 3 system has been continually expanding and now includes approximately 190 miles of sewer lines and one lift station. The City of Smyrna's water distribution and sewer collection service area is bordered by Windy Hill Road and Pat Mell Road to the north, Cambell Road, Hargrove Road, Village Parkway and Ridge Road to the east and south, and Concord Road and South Cobb Drive to the west. The City currently serves 10,303 customers. 4 CHAPTER 4 CONTRACTS WATER CONTRACT The City of Smyrna purchases all of its water supply from the Cobb County -Marietta Water Authority (CCMWA). The original water contract, dated April 2, 1952, had a thirty year term. An amendment to the contract, dated February 23, 1957, extended the term for an additional twenty years; therefore, the contract expires on April 2, 2002. We have received a letter from the CCMWA that states that negotiations for a new contract with the City will begin before the expiration of the current agreement. The City purchases water at a wholesale rate. Currently, the wholesale rate is $0.95 per thousand gallons. In 1992, the CCMWA implemented a new billing plan. The intent of the CCMWA was to discourage it's wholesale customers from using the CCMWA's water as a source of "peaking" or excess water during high demand periods like hot summer months. Under the new policy, the CCMWA calculates an average winter monthly demand recorded over four winter months. This average winter demand is multiplied by 130% to be used as a base point during upcoming months. Any average monthly demand greater than this base point is surcharged at the rate of normal billing plus a twenty-five percent surcharge. SEWER CONTRACT The City of Smyrna has a contract with the Cobb County Water System (CCWS) for all of the City's sewage treatment. The contract, dated April 13, 1971, has a thirty year term 5 and will expire on April 13, 2001. Prior to the expiration of the existing contract, the City will renegotiate with the CCWS to extend the existing agreement. Under the existing contract, the City is responsible for the construction, operation and maintenance of all sewerage facilities located within the corporate limits of the City. The CCWS is responsible for all sewerage facilities outside of the City limits and can revise the sewage rates when necessary. Currently, the City pays $2.27 per thousand gallons for sewage treatment. 0 CHAPTER 5 WATER USE, SYSTEM RATES, AND PROJECTED GROWTH Over the past several decades, the City of Smyrna has experienced a continuous increase in its customer base. Between 1996 and 1998, the number of customers served by the City increased from 9,522 to 10,303, an average of 391 new customers per year. A significant rate of growth is expected to continue during the next several decades. Projected growth of the system is based on a conservative estimate that the customer growth rate will continue at 350 new customers per year. The numbers of historic and projected water and sewerage customers are presented in Table 5-1. Note that the City has a large number of single metered apartments and condos; therefore, the actual number of customers is larger than the City records show. The amount of water purchased from CCMWA increased from 3.7 MGD in 1996 to 4.3 MGD in 1998. This is an increase of approximately 600,000 gallons more per day. At the same time, the number of gallons sold by the City of Smyrna has increased from 3.1 MGD to 3.7 MGD. The number of gallons of water used per day is influenced by many factors like weather conditions; but overall, as the number of customers increases in Smyrna so will the total amount of water purchased, distributed, and collected. The total amount of water distributed and collected is expected to continue to increase throughout the upcoming decades. 7 TABLE 5-1 HISTORIC AND PROJECTED CUSTOMERS YEAR AVERAGE NUMBER OF CUSTOMERS HISTORIC 1997 9,724 1998 10,114 PROJECTED 1999 10,464 2000 10,814 2001 11,164 2002 11,514 2003 11,864 2004 12,214 2005 12,564 2006 12,914 2007 13,264 2008 13,614 2009 13,964 2010 14,314 2011 14,664 The water rate for purchased water from CCMWA has increased at a rate of two percent per year, except for 1999. The sewer rate, from the CCWS, has experienced a four percent increase annually. The current and past water and sewer rates are listed in Table WA TABLE 5-2 WATER AND SEWER RATES (per 1,000 gallons) YEAR CCMWA -WATER RATES COBB COUNTY WATER SYSTEM - SEWER RATES 1996 $0.91 $2.02 1997 $0.93 $2.06 1998 $0.95 $2.18 1999 $0.95 $2.27 The City of Smyrna's water rate has also increased at a rate of two percent per year, except for 1999. The City's sewer rate has increased four percent annually. The current and past water and sewer rates are listed in Table 5-3. TABLE 5-3 CITY OF SMYRNA WATER AND SEWER RATES (per 1,000 gallons) YEAR WATER RATE SEWER RATE 1996 $1.64 $2.93 1997 $1.67 $3.05 1998 $1.70 $3.17 1999 $1.70 $3.30 In addition to these rates, Smyrna customers are charged a monthly base rate depending on their meter size. Table 5-4 shows the current base rates. E TABLE 5-4 CITY OF SMYRNA BASE RATES METER SIZE BASE RATE 3/4" (residential) $5.00 3/4" (commercial) $7.50 1" $15.00 1-1/2" $30.00 2" $60.00 3°7 $187.50 417 $225.00 6" $300.00 817 $375.00 10" $450.00 RATE COMPARISON A comparison of the City of Smyrna's water and sewer rates with other local utilities is shown in the following table: TABLE 5-5 RATE COMPARISON BASED ON A 7,000 GALLON CONSUMPTION Location Total Water and Sewer Bill The City of Smyrna $40.00 The City of Powder Springs $38.57 Cobb Countv $44.71 The City of Kennesaw $36.00 CHAPTER 6 -- PROJECT DESCRIPTION The City of Smyrna has long recognized the need to maintain and expand their water and sewer systems. Currently, the City has identified thirty separate areas that need infrastructure improvements. These improvements include approximately 15,400 L.F. of sewer main replacement, 13,000 L.F. of water main upgrades, and water and sewer relocations required for the proposed downtown street improvements. The new water mains will replace existing undersized mains; improving domestic service and fire protection flows. The proposed sewer improvements will help eliminate costly maintenance, potential overflows, and reduce infiltration and inflow costs. A summary of the estimated project cost is shown below: Sewer Main Construction $2,900,000 Water Main Construction $647,500 Downtown Utility Relocation $488,000 Contingencies $251,300 Engineering and Inspection $363,200 Total Estimated Cost $4,650,000 These improvements will be designed, bid and constructed in phases during the two year period following the issuance of the bonds. 11 CHAPTER 7 FINANCIAL ANALYSIS From information compiled by Anderson Hunt & Company, Knox Wall Division of Morgan Keegan & Company, Inc., the City of Smyrna Finance Department, the City of Smyrna Utilities Department, and future customer projections (Table 5-1) derived in this report, the following tables were developed: TABLE 7-1 - Revenue Available for Debt Service - FY 1998 TABLE 7-2 - Projected Revenue from Water and Sewerage System Operations TABLE 7-3 - Projected Expenses of the Water and Sewerage System TABLE 7-4 - Projected Revenue Available for Debt Service and Coverage Table 7-4 shows that both the projected net revenue and debt service coverage increase from FY 1999 through FY 2011. In FY 1999, the net revenue is estimated to be $1,704,895 and by FY 2011 it is estimated to increase to 54,017,341. At the same time, estimated debt service coverage is projected to increase from 2.64 in FY 1999 to 13.26 in FY 2011. During the first five years of the bond, FY 1999 - FY 2003, the average coverage is estimated to be 2.52. Over the entire life of the bond, FY 1999 - FY 2011, the average coverage is estimated to be 3.99. 12 ASSUMPTIONS FOR TABLE 7-2 • There will be 350 new customers per year. • The water rate charged per 1,000 gallons will increase 2% annually, beginning in FY 2000. The sewerage, rate charged per 1,000 gallons will increase 4% annually. • The interest income remains constant throughout the life of the bond. * The miscellaneous revenue per customer will stay at the same rate. • Projections do not include tap fees. ASSUMPTIONS FOR TABLE 7-3 • The cost of personnel services per customer will increase at a rate of 2% per year. • The operating expense per customer will increase at a rate of 2% per year. • The contractual service rate per customer will increase at a rate of 3% per year. Table 7-4 presents the estimated debt service coverage from FY 1999 to FY 2011. Estimates in this financial analysis found that the annual debt service is covered by at least 223% throughout the length of the Bond Issue. Since the revenue and expenses of the water and sewer systems were conservatively estimated, the City of Smyrna should have sufficient revenue to cover the proposed debt service. 13 TABLE 7-1 REVENUE AVAILABLE FOR DEBT SERVICE - FY 1998 REVENUE FY 1998 Ending 6/30/98 - Audited Sales and Service $7,379,111 Interest Income $67,725 Miscellaneous Revenue $42,198 TOTAL $7,489,033 EXPENSES Personnel Services $696,166 Operating Expenses $424,687 Contractual Services $4,362,655 TOTAL $5,483,508 NET REVENUE AVAILABLE FOR DEBT SERVICE $2,005,525 14 TABLE 7-2 PROJECTED REVENUE FROM WATER AND SEWERAGE SYSTEM OPERATIONS FISCAL YEAR AVERAGE NUMBER OF WATER AND SEWERAGE CUSTOMERS SALES AND SERVICE INTEREST INCOME MISCELLANEOUS REVENUE TOTAL REVENUE 1998 10,114 7,379,111 67,725 42,198 7,489,033 1999 10,464 7,557,729 70,000 43,635 7,671,364 2600 10,814 8,059,999 70,000 45,094 8,175,093 2001 11,164 8,587,409 70,000 46,554 8,703,963 2002 11,514 9,141,161 70,000 48,013 9,259,174 2003 11,864 9,722,501 70,000 49,473 9,841,974 2004 12,214 10,332,734 70,000 50,932 10,453,667 2005 12,564 10,973,226 70,000 52,392 11,095,618 2006 12,914 11,645,406 70,000 53,851 11,769,258 2007 13,264 12,350,770 70,000 55,311 12,476,081 2008 13,614 13,090,883 70,000 56,770 13,217,653 2009 13,964 13,867,383 70,000 58,230 13,995,613 2010 14,314 14,681,984 70,000 59,689 14,811,674 2011 14,664 15,536,481 70,000 61,149 15,667,630 rn TABLE 7-3 PROJECTED EXPENSES OF THE WATER AND SEWERAGE SYSTEM FISCAL YEAR AVERAGE NUMBER OF WATER AND SEWERAGE CUSTOMERS PERSONNEL SERVICES OPERATING EXPENSE CONTRACTUAL SERVICES TOTAL EXPENSE 1998 10,114 696,166 424,687 4,362,655 5,483,508 1999 10,464 748,595 478,519 4,739,355 5,966,468 2000 10,814 789,106 504,415 5,044,813 6,338,334 2001 11,164 830,939 531,155 5,364,334 6,726,428 2002 11,514 874,129 558,763 5,698,485 7,131,378 2003 11,864 918,715 587,264 6,047,857 7,553,836 2004 12,214 964,734 616,680 6,413,063 7,994,478 2005 12,564 1,012,227 647,039 6,794,739 8,454,004 2006 12,914 1,061,233 678,365 7,193,543 8,933,141 2007 13,264 1,111,795 710,685 7,610,160 9,432,641 2008 13,614 1,163,955 744,027 8,045,300 9,953,282 2009 13,964 1,217,757 778,418 8,499,700 10,495,874 2010 14,314 1,273,245 813,887 8,974,122 11,061,254 2011 14,664 1,330,465 850,464 9,469,360 11,650,289 TABLE 7-4 PROJECTED REVENUE AVAILABLE FOR DEBT SERVICE AND COVERAGE FISCAL YEAR TOTAL REVENUE TOTAL EXPENSE REVENUE AVAILABLE FOR DEBT SERVICE TOTAL DEBT SERVICE COVERAGE 1998 7,489,033 5,483,508 2,005,525 1999 7,671,364 5,966,468 1,704,895 646,134 2.64 2000 8,175,093 6,338,334 1,836,759 823,575 2.23 2001 8,703,963 6,726,428 1,977,535 827,565 2.39 2002 9,259,174 7,131,378 2,127,797 825,545 2.58 2003 9,841,974 7,553,836 2,288,139 827,705 2.76 2004 10,453,667 7,994,478 2,459,189 823,735 2.99 2005 11,095,618 8,454,004 2,641,614 822,855 3.21 2006 11,769,258 8,933,141 2,836,117 827,025 3.43 2007 12,476,081 9,432,641 3,043,440 824,635 3.69 2008 13,217,653 9,953,282 3,264,371 825,523 3.95 2009 13,995,613 10,495,874 3,499,739 824,778 4.24 2010 14,811,674 11,061,254 3,750,420 827,370 4.53 2011 15,667,630 11,650,289 4,017,341 303,050 13.26 CHAPTER 8 SUMMARY AND RECOMMENDATIONS It is recommended that the City of Smyrna provide the local financing required to fund the proposed improvements. This can be accomplished with the issuance of $6,645,000 in revenue bonds ($2,115,000 of which will be used to refund the Series 1989 Bond thru July 1, 2000-2004). A review of the information outlined in the financial section of this report indicates that adequate funds are available for the City to finance the additional debt service obligation that would be incurred by the issuance of a $6,645,000 revenue bond. 18