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Transmittal - 7/30/2014MARINA SCOTT CITY TREASURER v l~-0 ~ . · ~d'J NED TO: f/j_ olt( µj SCANN~B~~ ~C'~@llllf ~l!fflEl~lr DATE: 7, X)r;P¥ECKER DEPARTMENT OF" FINANCE / Y□R TREASURER'S DIVISION CITY COUNCIL TRANSMITTAL 7' , ~ fj ~, ' ~ '. . ,) "' i D~~ fiepi~ed: ~Ji./ Date se~~~al: 1·~.f-&~f::J.f'I{'-/ TO: Salt Lake City Council DATE: July 29, 2014 Charlie Luke, Chair FROM: Gina Chamness, Finance/Budget Director ~ ~ SUBJECT: Sales and Excise Tax Revenue Bonds, Series 2014B (CIP Projects) STAFF CONTACT: Marina Scott, City Treasurer 801-535-6565 COUNCIL SPONSOR: Exempt DOCUMENT TYPE: Resolution RECOMMENDATION: The Administration recommends that on August 19, 2014 the City Council considers and adopts a delegating bond resolution authorizing the issuance and the sale of up to $12,000,000 of the City's sales and excise tax revenue bonds to finance the cost of acquisition, construction and improvement of various City buildings, parks, property and roads; and delegating authority to certain officials and officers of the City to approve the final terms and provisions of such bonds. BUDGET IMP ACT: Based on preliminary estimates and the current interest rate environment, annual debt service costs would average $758,000 per year for 21 years. Attached is a preliminary numbers run including estimated sources and uses of funds as well as debt amortization schedules. BACKGROUND/DISCUSSION: In October of 2013, the City Council approved Resolution 49 of 2013, allocating CIP funding that has previously been appropriated by the Council as part of the FY 2013 - 14 budget. Later, in budget amendment # 2, the City Council approved a number of capital improvement projects with the intent of financing these projects by issuing sales and excise tax revenue bonds. The list of the capital improvement projects to be financed by issuing sales and excise tax revenue bonds is attached. LOCATION: 451 SOUTH STATE STREET, ROOM 228, SALT LAKE CITY, UTAH 84111 MAILING ADDFH.SS: P.O. ~OX 1 45462, SALT LAKE CITY, UTAH 841 l 4·5462 TELEPHONE: 001·535·7946 FAX: 0□1·535·6082 WWW.SLCG□V,COM The bonds are cur rently planned to be sold on Tuesday, August 26, 2014 at 9:30 a.m . using the com petitive m ethod of sale, whereby the award is given to the fir m offering the low est interest ra te bid. Please use the attached Agenda and M otion language pro vided by Bond Counsel. A prelim inary debt service schedule fo r the Bonds is pro vided with this packet. Also, dra ft copies of the Bond Resolution, Tenth Supplem ental Tru st Indentur e, Certificate of Determ ination, Prelim inary Offi cial Statem ent, Form of Continuing Discl osur e Agreem ent, and Offi cial Notice of Sale are attached fo r your review . Please keep in m ind that these are prelim inary dra fts and are subject to change. Attachm ents cc: M ike Akerlow , Gina Cham ness, Boyd Ferguson, Robin Hutcheson, Jo seph M ora talla Jeff Snelling 2 H:\Treas\DansDocs\Council Cover Letters\SETRB Series 2014B (CIP Projects) - Final Resolution.doc CINDI L. MANSELL CITY RECORDER RALPH BECKER MAYOR City Recorder August 13, 2014 Chapman and Cutler, LLP Attn: Melanie Orullian 201 South Main Street Salt Lake City, Utah 84111-2266 RE: Public Hearing Proceedings: Sales and Excise Tax Revenue Bonds, Series 2014B. ( CIP) Melanie: Enclosed are three (3) signed/sealed copies of Public Hearing Proceedings relating Sales and Excise Tax Revenue Bonds, Series 2014B. One copy contains updated information from meeting. Please e-mail a color PDF of finalized document. further assistance, please call me at 535-6221. Scott C. Crandall Deputy Recorder Q 14-6 LOCATION: 451 SOUTH STATE STREET, ROOM 415, SALT LAKE CITY, UTAH 84111 MAILING ADDRESS: PO BOX 145515, SALT LAKE CITY, UTAH 84114-5515 TELEPHONE: 801-535-7671 FAX: 801-535-7681 CINDI L. MANSELL CITY RECORDER RALPH BECKER MAYOR City Recorder July 31, 2014 Chapman and Cutler, LLP Attn: Melanie Orullian 201 South Main Street Salt Lake City, Utah 84111-2266 RE: Resolutions: Motor Fuel Excise Tax Revenue Bonds and Sales and Parameters Resolution for Sales and Excise Tax Revenue Bonds, Series 2014B. Melanie: Enclosed are three (3) signed/sealed copies of Resolution 15 of 2014 relating to Motor Fuel Excise Tax Revenue Bonds and (3) signed/sealed copies of Resolution 16 of 2014, Parameters Resolution for Sales and Excise Tax Revenue Bonds, Series 2014B. One copy of each contains updated information from meeting. Please e-mail a color PDF of finalized resolution. If I can be of any further assistance, please call me at 535-6221. Deputy Recorder e9 and Q 14-3 LOCATION: 451 SOUTH STATE STREET, ROOM 415, SALT LAKE CITY, UTAH 84111 MAILING ADDRESS: PO BOX 145515, SALT LAKE CITY, UTAH 84114-5515 TELEPHONE: 801-535-7671 FAX: 801-535-7681 Salt Lake City Corpo ratio n - ---- ---- List of Capital Improvement Projects (CIP ) 1 For Funding with the Sales and Excise Tax Revenue Bonds(STRB), Series 2014B - - -- - - As of June 11, 2014 -------,-1 _D_R------.&'FT for Discussion Only -----L - --1 I. Replacement Projects (C&C Bldg. Stone Remediation) 7 - -~---+ I 1.a $ 409,000 I Undsey Gardens Playground I 1.b 50,000 1 I Fairmont Park T~nn;s Courts 9th Ave. & M Street & Fairmont Park, 2361 So. 900 E. ADA Playground Improvements. ' I V -- - - - --- -- - ' To remove & replace existing playground equipment with new ADA playground equipment & play area sand in play area of both parks, provide concrete curbing/sitting walls, relocate existing benches & provide landscape & irrigation adjustments at Fairmont Park & add benches & trees at Lindsey 1 1 Gardens. Relocation & construction of two post-tension concrete tennis courts, I I perimeter fencing, windscreens, shade structure, benches, waste receptacles & : 1 drinking fountain. Potential location includes Forest Dale Golf Course parking lot y 1.c 1,400,000 11th Ave Tennis Courts : 11th Ave. Tennis courts, 909 E. 11th Ave, Dist. 3 -------41--R-ec-onstruct eight existing tennis courts at 11th Ave. Park with new post tension concrete courts. ----+-- ------ y 1.d = - !2361 So. 900 East To provide soccer improvements to include regrading, drainage soil __ __ amendment, minor irrigation system adjustments & replacement of turf. I To develop and construct fencing and other amenities for a dog-off-leash _ ___J____ 100,000 j I Fairmont Park Dog-Off Leash Area _ 1 area at the southeast corner of Fairmont Park. struct approximately 2 to 3 miles of a Downtown Cycle Track , similar to the 300 E. Cycle Track prototype on streets appropriate to width, I traffic volume, current curb configuration, surrounding land use, & lack of conflict with transit. Project consists of street resurfacing for new design, 'striping, symbols, signs & green coloring, intersection planters, curb & bollard post separation, signal modifications, & bike boxes. Proposed area includes area bounded by 1-15 & 900 E. (to the west & east) & by No Temple & 900 So. (to the north & south). Total project consists of approximately 8 to 12 miles of cycle track. This project would be Phase I. 450,0091 I 1.e 1.f Fairmont Park Soccer Field I I I I I 1,080,000 Downtown Cycle Track Network - Ph I I I I y y y -- ---+------. 1.g I t - - ------ 180,000 I 'Traffic Signal Installation Traffic Signal Installation -1100 East South Temple To design & construct a new traffic signal where none currently exists on 1100 East & South Temple. y 6/25/2014 H·\ Treas\DansDocs\Councll Cover Letters\STRB 2014B CIP ProJects.xlsxSTRB14-ProJ.lst FT for Discussion Only 1.h , 450,000 lwakara Way Traffic Signal 1.i I =-1:r= --- : I - - . -- --- -- so,ooo I East Central City Pedestrian Safety To design & construct a traffic signal at the intersection of Wakara Way & Arapeen Drive in Research Park. Traffic conditions warrant the installation of I traffic control measures at this lntersectlon which can accommodate a traffic al. -- To provide for installation of pedestrian activated flashing LED-;arning lights at crosswalks on 100 South at 1000 and 1200 East for neighborhood safety and accessibility. y y 1.j To modify inadequate HVAC system to improve thermal comfort and livability 466,000 : I Justice Courts HVAC - Energy Conservation i resulting in an estimated 13% annual electrical and 25% annual natural gas -----+I__ !savings. y 1.k j I su.ooo I I Memorial House Retaining Wall - Ph II I To engineer, design, construct and replace the remaining original portion of the i , retaining wall including the section in the Garden Room and to provide I landscaping associated with the construction of 20' section of the wall that was ' previously reconstructed due to it collapsing. y 1.1 I -i---- I 1,200,000 I Subtotal 6,345,000 j Fire Station #4 Retaining W_a_ll _ I To engineer, design and construct and replace the retaining wall at Fire Station number 4. -------- y II. Seismic Repairs Project 2,797,000 I I Seismic Repairs Project Ill. Sunnyside Improvements I "-- I I 1,150,000 lsunnyside Improvements --- IV. McClelland Trail Project* 1,076,000 Preliminary Amount for Bond ---r "Note: Total prior to McCl/and $10,292,000 .00 $ 11,368,000 ----- -----l- 1 Street To remove bumpers surrounding the seismic base isolators & construct a , fail-safe gravity support mechanism which consists of increasing mote space around isolators & constructing piers adjacent to the existing isolators. The piers would support the building should the isolators fail. I Sunnyside Complete Streets Improvements - Sunnyside Ave., 1300 E to Foothill 1 ~ - -- - ---- This project will provide for the installation of improvements recommended in the 800 South/Sunnyside Avenue Complete Streets Planning Project report. This estimate is based on the installation of planted medians, bicycle facilities, & other amenities to improve the street. y y i I McClelland Trail Project I To design & construct the Jordan & Salt Lake City Canal Trail, within the canal I corridor or on adjacent roadways, between 800 South & Elgin Ave. '(approximately 3000 South), as described in the Jordan & Salt Lake City Canal Trail Feasibility Study. ------- y 6/25/2014 H:\Treas\DansDocs\Counc1I Cover Letters\STR B 2014B CIP ProJects.xtsxSTRB14-ProJ Lst • LYRB - - $11,600,000 Salt Lake City, Utah Sales & Excise Tax Revenue Bonds, Series 20148 (CIP Projects) Table of Contents Report Sources & Uses Debt Service Schedule 2 6125/2014 I 10:26 AM WE PROVIDE SOLUTIONS LY R B ,., • $11,600,000 Salt Lake City, Utah Sales & Excise Tax Revenue Bonds, Series 20148 (CIP Projects) Sources & Uses Dated 09/24/2014 I Delivered 09/24/2014 Sources Of Funds Par Amount of Bonds $11,600,000.00 Total Sources $11,600,000.00 Uses Of Funds Costs of Issuance Deposit to Project Construction Fund 232,000.00 11,368,000.00 Total Uses $11,600,000.00 612512014 I 10·26 AM Page 1 WE PROVIDE SOLUTIONS LYRB e - Frrr Ji I '\ ''' $11,600,000 Salt Lake City, Utah Sales & Excise Tax Revenue Bonds, Series 2014B (CIP Projects) Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 09/24/2014 04/01/2015 144,354,91 144,354,91 144,354,91 10/01/2015 480,000,00 0,390% 138,951-25 618,951-25 04/01/2016 138,015,25 138,015,25 756,966,50 10/01/2016 485,000,00 0,550% 138,015,25 623,015,25 04/01/2017 136,681,50 136,681,50 759,696,75 10/01/2017 490,000,00 0,850% 136,681,50 626,681,50 04/01/2018 134,599,00 134,599,00 761,280,50 10/01/2018 495,000,00 1,180% 134,599,00 629,599,00 04/01/2019 131,678,50 131,678,50 761,277,50 10/01/2019 500,000,00 1,480% 131,678,50 631,678,50 04/01/2020 127,978,50 127,978,50 759,657,00 10/01/2020 505,000,00 1-750% 127,978,50 632,978,50 04/01/2021 123,559,75 123,559,75 756,538,25 10/01/2021 515,000,00 2,010% 123,559,75 638,559,75 04/01/2022 118,384,00 118,384,00 756,943,75 10/01/2022 530,000,00 2-220% 118,384,00 648,384,00 04/01/2023 112,501,00 112,501-00 760,885,00 10/01/2023 540,000,00 2,400% 112,501,00 652,501,00 04/01/2024 106,021,00 106,021,00 758,522,00 10/01/2024 555,000,00 2,520% 106,021,00 661,021,00 04/01/2025 99,028,00 99,028,00 760,049,00 10/01/2025 570,000,00 2,630% 99,028,00 669,028,00 04/01/2026 91,532,50 91,532,50 760,560,50 10/01/2026 585,000,00 2-730% 91,532,50 676,532,50 04/01/2027 83,547-25 83,547-25 760,079,75 10/01/2027 600,000,00 2,830% 83,547,25 683,547,25 04/01/2028 75,057,25 75,057,25 758,604,50 10/01/2028 620,000,00 2,920% 75,057,25 695,057-25 04/01/2029 66,005,25 66,005,25 761,062,50 10/01/2029 635,000,00 3,010% 66,005,25 701,005,25 04/01/2030 56,448,50 56,448,50 757,453,75 10/01/2030 655,000,00 3,090% 56,448,50 711,448,50 04/01/2031 46,328,75 46,328,75 757,777,25 10/01/2031 675,000,00 3,160% 46,328,75 721,328,75 04/01/2032 35,663,75 35,663,75 756,992,50 10/01/2032 700,000,00 3,230% 35,663,75 735,663,75 04/01/2033 24,358,75 24,358,75 760,022,50 10/01/2033 720,000 00 3,300% 24,358,75 744,358 75 04/01/2034 12,478,75 12,478,75 756,837,50 10/01/2034 745,000,00 3,350% 12,478,75 757,478,75 04/01/2035 757,478,75 Total $11,600,000.00 $3,723,040.66 $15,323,040.66 Yield Statistics Bond Year Dollars $131,340 56 Average Life 11 322 Years Average Coupon 2 8346467% Net Interest Cost (NIC) 2 8346467% True Interest Cost (TIC) 2 7994591% Bond Yield for Arbitrage Purposes 2 7994591% All lnduswe Cost (AIC) 3 01488 65% IRS Form 8038 Net Interest Cost 2 8346467% Weighted Average Maturity 11 322 Years er.?5/2014 I 1026AM Page2 WE PROVIDE SOLUTIONS Chapman and Cutler LLP Draft of 06/24/ 14 RESOLUTION NO. OF 2014 A Resolution authorizing the issuance and sale of up to $12,000,000 aggregate principal amount of Sales and Excise Tax Revenue Bonds of Salt Lake City, Utah; fixing the maximum aggregate principal amount of the bonds, the maximum number of years over which the bonds may mature and the maximum interest rate that the bonds may bear; providing for the publication of a Notice of Bonds to be Issued; providing for the running of a contest period; authorizing the circulation of the Preliminary Official Statement with respect thereto; providing for the publication of a Notice of Public Hearing and the holding of a public hearing; expressing official intent regarding certain capital expenditures to be reimbursed from proceeds of such bonds; and providing for related matters. *** *** *** WHEREAS, the City Council (the "Council") of Salt Lake City, Utah (the "City") considers it desirable and necessary and for the benefit of the City to issue up to $12,000,000 principal amount of Sales and Excise Tax Revenue bonds (the "Bonds") for the purpose of (a) financing all or a portion of the cost (i) of the acquisition, construction and improvement of various City buildings, parks, property and roads, as further described in Annex 6 hereto and (ii) of the acquisition, construction, improvement and remodeling of various other capital improvement program projects (collectively, the "Project"), (b) providing capitalized interest to pay all or a portion of the interest accruing on the Bonds during the acquisition, construction, improvement and remodeling of the Project; ( c) funding any necessary reserves and contingencies in connection with the Bonds, and ( d) paying the costs incurred in connection with the issuance and sale of the Bonds; WHEREAS, pursuant to the applicable provisions of Chapter 14 of Title 11 (the "Act") of the Utah Code Annotated 1953, as amended (the "Utah Code"), the City has the authority to issue the Bonds for the foregoing purposes; WHEREAS, Section 11-14-316 of the Utah Code provides for the publication of a Notice of Bonds to be Issued (the "Notice of Bonds") and the running of a 30-day contest period, and the City desires to cause the publication of such Notice of Bonds at this time in compliance with said section with respect to the Bonds; and WHEREAS, a portion of the expenditures relating to the Project (the "Expenditures") (i) have been paid from the City's Capital Improvement Program Fund (the "Fund") within the sixty days prior to the passage of this Resolution or (ii) will be paid from the Fund on or after the passage of this Resolution and prior to the issuance of the Bonds; NOW, THEREFORE, BE IT RESOLVED by the City Council of Salt Lake City, Utah, as follows: 3610117.01 .03.doc 8706145/RDB/mo CIP Parameters Resolution Section 1. Bonds Authorized; Purpose. The Council hereby finds and determines that it is in the best interests of the residents of the City for the City to issue the Bonds in an aggregate principal amount not to exceed Twelve Million Dollars ($12,000,000), to bear interest at a rate or rates of not to exceed six percent (6.00%) per annum, to mature over a period not to exceed twenty-one (21) years from their date or dates, and to be sold at a discount from par not to exceed two percent (2.00%) of the principal amount thereof, pursuant to a resolution to be adopted and approved by the City in substantially the form attached hereto as Annex 1 (the "Bond Resolution"), the Master Trust Indenture, dated as of September 1, 2004, as heretofore amended and supplemented (the "Master Indenture"), between the City and Zions First National Bank, as trustee, a copy of which is attached hereto as Annex 2, and a Tenth Supplemental Trust Indenture to be entered into at the time of issuance of the Bonds in substantially the form attached hereto as Annex 3 (the "Supplemental Indenture" and, collectively with the Master Indenture, the "Indenture"). The Bonds shall be subject to such optional and mandatory redemption and other provisions as are contained in the final form of the Bonds and the Indenture. Therefore, the City hereby declares its intention to issue the Bonds according to the provisions of this Resolution, the Bond Resolution and the Indenture for the purpose of (a) financing all or a portion of the cost of the Project, (b) providing capitalized interest to pay all or a portion of the interest accruing on the Bonds during the acquisition, construction, improvement and remodeling of the Project; (c) funding all or a part of any necessary reserves and contingencies in connection with the Bonds, and (d) paying all or a part of the costs incurred in connection with the issuance and sale of the Bonds. Section 2. Notice of Bonds to be Issued; Contest Period. In accordance with the provisions of Section 11-14-316 of the Utah Code, the City Recorder or any Deputy City Recorder shall cause the Notice of Bonds, in substantially the form attached hereto as Annex 4, to be published one time in The Salt Lake Tribune and the Deseret News, newspapers having general circulation within the City. For a period of thirty (30) days from and after publication of the Notice of Bonds, any person in interest shall have the right to contest the legality of this Resolution (including the Bond Resolution and the form of the Supplemental Indenture attached hereto) or the Bonds hereby authorized or any provisions made for the security and payment of the Bonds. After such time, no one shall have any cause of action to contest the regularity, formality or legality of this Resolution (including the Bond Resolution and the Supplemental Indenture) or the Bonds or any provisions made for the security and payment of the Bonds for any cause. Section 3. City Recorder to Perform Certain Acts. The City Recorder is hereby directed to maintain a copy of this Resolution (together with all annexes hereto), the form of the Final Bond Resolution, a copy of the Master Indenture and the form of the Supplemental Indenture on file in the City Recorder's office during regular business hours for public examination by registered voters of the City and other interested persons until at least thirty (30) days from and after the date of publication of the Notice of Bonds. The City Recorder is hereby directed to, upon request, supply copies of the form of petition specified in Section 5 hereof. Section 4. Publication of Official Notice of Bond Sale. If necessary in the judgment of the City Treasurer, the City Recorder is further directed to cause an Official Notice of Bond Sale, - 2 - CIP Parameters Resolution in substantially the form attached hereto as Annex 7, to be disseminated electronically by the City's financial advisor prior to the date of said sale and the sale shall be held in accordance with the terms set out in such Official Notice of Bond Sale. Section 5. Preparation and Distribution of a Preliminary Official Statement. The preparation and distribution of a Preliminary Official Statement for the Bonds in connection with the sale thereof is hereby authorized. Section 6. Reimbursement of Expenditures. The City reasonably expects to reimburse the Expenditures with proceeds of the Bonds. Section 7. Severability. It is hereby declared that all parts of this Resolution are severable, and if any section, paragraph, clause or provision of this Resolution shall, for any reason, be held to be invalid or unenforceable, the invalidity or unenforceability of any such section, paragraph, clause or provision shall not affect the remaining sections, paragraphs, clauses or provisions of this Resolution. Section 8. Repealer. All resolutions or parts thereof in conflict herewith are, to the extent of such conflict, hereby repealed. Section 9. Effective Immediately. This Resolution shall take effect immediately upon its adoption. (Signature page follows.) - 3 - CIP Parameters Resolution A D O PT E D A N D A PPR O V E D th is 2 9 th d ay of Ju ly , 2 0 14 . SA L T L A K E CI T Y , SA L T L A K E C O U NT Y , U T A H C h air Salt L ak e C ity C o u n cil [S E A L ] A T T E ST : C ity R eco rd er A PPR O V E D : By _ Mayor APPROVED AS TO FORM: - 4 - CIP Parameters Resolution A NNEX 4 N O TI CE O F B O NDS TO BE ISSUED NOTICE IS HEREBY GIVEN pursuant to the provisions of Section 11-14-316, Utah Code Annotated 1953, as amended, that on July 29, 2014, the City Council (the "Council") of Salt Lake City, Utah (the "City"), adopted a resolution (the "Resolution") in which it authorized and approved the issuance of its Sales and Excise Tax Revenue Bonds (the "Bonds"), in an aggregate principal amount of not to exceed $12,000,000 to bear interest at a rate or rates of not to exceed 6.00% per annum and to mature not later than 21 years from their date or dates and to be sold at a discount from par not to exceed 2.00%. The Bonds shall be subject to such optional and mandatory redemption and other provisions as are contained in the Master Trust Indenture, described below, and the final form of the Bonds and Supplemental Indenture, described below. Pursuant to the Resolution, the Bonds are to be issued for the purpose of (a) financing all or a portion of the cost (i) of acquiring, constructing and improving various City buildings, parks, property and roads, as further described in the Resolution, and (ii) of acquiring, constructing, improving and remodeling various other capital improvement program projects (collectively, the "Project"), (b) providing capitalized interest to pay all or a portion of the interest accruing on the Bonds during the acquiring, constructing, improving and remodeling of the Project, (c) funding all or a portion of any necessary reserves and contingencies in connection with the Bonds, and (d) paying all or a portion of the costs incurred in connection with the issuance and sale of the Bonds. The Bonds are to be issued and sold by the City pursuant to the Resolution, including as part of the Resolution a draft, in substantially final form, of a bond resolution and a Tenth Supplemental Trust Indenture (the "Supplemental Indenture") and a copy of the Master Trust Indenture, dated as of September 1, 2004, as heretofor amended and supplemented (the "Master Indenture"), between the City and Zions First National Bank, as trustee, that were before the Council and attached to the Resolution at the time of the adoption of the Resolution. The Council will adopt the bond resolution and the City will cause the Supplemental Indenture to be executed and delivered, in each case in such form and with such changes thereto as the Council shall approve upon the adoption of the bond resolution, provided that the principal amount, interest rate or rates, maturity and discount, if any, will not exceed the respective maximums described above. The repayment of the Bonds will be secured by a pledge of the legally available revenues from: (a) Local Sales and Use Taxes received by the City pursuant to Title 59, Chapter 12, Part 2, Utah Code (currently levied and collected pursuant to Chapter 3.04 of the Salt Lake City Code); (b) Municipal Energy Sales and Use Taxes received by the City pursuant to Title 10, Chapter 1, Part 3, Utah Code (currently levied and collected pursuant to Chapter 3.06 of the Salt Lake City Code); (c) the franchise fees for energy and utilities received by the City pursuant to Title 10, Chapter 1, Part 3, Utah Code (currently levied and collected pursuant to Chapter 3.06 of Salt Lake City Code); (d) the Municipal Telecommunications License Tax revenues received by the City pursuant to Title 10, Chapter 1, Part 4, Utah Code (currently levied and collected pursuant to Chapter 3.10 of Salt Lake City Code); (e) the franchise fees associated with public utilities received by the City pursuant to Title 10, Chapter 1, Part 3, Utah Code (currently levied and collected pursuant to Chapter 17 .16.070 of Salt Lake City Code); and (f) the franchise fees Annex 4-1 CIP Parameters Resolution associated with cable television received by the City pursuant to Salt Lake City Code Chapter 5.20 (collectively, the "Pledged Taxes"). The City currently has $ par amount of bonds or notes currently outstanding that are secured by the Pledged Taxes. More detailed information relating to the City's outstanding bonds can be found in the City's most recent Comprehensive Annual Financial Report that is available on the Office of the Utah State Auditor's website (www.sao.state.ut.us). Assuming a final maturity for the Bonds of 20 years from the date hereof and that the Bonds are issued in an aggregate principal amount of $. and are held until maturity, based on the City's currently expected financing structure and interest rates in effect around the time of publication of this notice, the estimated total cost to the City of the proposed Bonds is $ _ A copy of the Resolution (including the drafts of the bond resolution and the Supplemental Indenture and a copy of the Master Indenture attached to the Resolution) is on file in the office of the City Recorder, located in Room 415, City and County Building, 451 South State Street, in Salt Lake City, Utah, where the Resolution may be examined during regular business hours of the City Recorder from 8:00 a.m. to 5:00 p.m. The Resolution shall be so available for inspection for a period of at least thirty (30) days from and after the date of the publication of this notice. NOTICE Is FURTHER GIVEN that, pursuant to law, for a period of thirty (30) days from and after the date of the publication of this notice, any person in interest shall have the right to contest the legality of the Resolution (including the bond resolution and the Supplemental Indenture attached thereto) of the City or the Bonds authorized thereby or any provisions made for the security and payment of the Bonds. After such time, no one shall have any cause of action to contest the regularity, formality or legality of the Resolution, the Bonds or any provisions made for their security and payment for any cause. DATED this 29th day of July, 2014. SALT LAKE CITY, UT AH By--------------- City Recorder [SEAL] Annex 4-2 CIP Parameters Resolution A NNEX 6 C U RRE NTLY A NTI C IPATED PR O JEC TS PROJECT TITLE Lindsey Gardens Playground Fairmont Park Tennis Courts 11th Ave Tennis Courts Fairmont Park Soccer Field Fairmont Park Dog-Off Leash Area Downtown Cycle Track Network Traffic Signal Installation W akara Way Traffic Signal East Central City Pedestrian Safety PROJECT DESCRIPTION Remove and replace existing playground equipment and new ADA playground equipment and play area sand in play area Relocation and construction of two post-tension concrete tennis courts. Justice Courts HV AC - Energy Conservation Memorial House Retaining Wall - Ph II Fire Station #4 Retaining Wall Seismic Repairs Project Reconstruct eight existing tennis courts. Provide soccer improvements. Develop and construct fencing and other amenities for a dog-off-leash area at the southeast comer of Fairmont Park. Design and construct approximately 2 to 3 miles of a Downtown Cycle Track. Design and construct a new traffic signal on 1100 East and South Temple. Design and construct a traffic signal at the intersection of Wakara Way and Arapeen Drive. Provide for installation of pedestrian activated flashing LED warning lights at crosswalks on 100 South at 1000 and 1200 East. Modify inadequate HV AC system. Engineer, design, construct and replace the remaining original portion of the retaining wall. Engineer, design and construct and replace the retaining wall. Remove bumpers surrounding the seismic base isolators and construct a fail-safe gravity support mechanism. Sunnyside Improvements McClelland Trail Project Install improvements near 800 South/Sunnyside Avenue. Design and construct the Jordan and Salt Lake City Canal Trail. Annex 6-1 CIP Parameters Resolution Chapman and Cutler LLP Draft of 06/24/ 14 RESOLUTION NO. OF 2014 A Resolution authorizing the issuance and the sale of not to exceed $12,000,000 aggregate principal amount of Sales and Excise Tax Revenue Bonds for the purpose of financing various City buildings, parks, property and roads and related improvements; authorizing the execution and delivery of a supplemental trust indenture to secure said bonds; giving authority to certain officials and officers to approve the final terms and provisions of the bonds within the parameters set forth herein; authorizing the taking of all other actions necessary for the consummation of the transactions contemplated by this resolution; and related matters. *** *** *** WHEREAS, Salt Lake City, Utah (the "City") is a duly organized and existing city of the first class, operating under the general laws of the State of Utah (the "State"); WHEREAS, the City considers it necessary and desirable and for the benefit of the City to issue its sales and excise tax revenue bonds as hereinafter provided for the purpose of (a) financing all or a portion of the cost (i) of the acquisition, construction and improvement of various City buildings, parks, property and roads, as further described in Exhibit E hereto and (ii) of the acquisition, construction, improvement and remodeling of various other capital improvement program projects (collectively, the "Series 2014B Project"), (b) providing any necessary capitalized interest to pay all or a portion of the interest accruing on the Series 2014B Bonds (defined below) during the acquisition, construction, improvement and remodeling of the Project; ( c) funding any necessary reserves and contingencies in connection with the Series 2014B Bonds, and (d) paying the costs incurred in connection with the issuance and sale of the Series 2014B Bonds pursuant to authority contained in the Local Government Bonding Act, Chapter 14 of Title 11 (the "Act"), Utah Code Annotated 1953, as amended (the "Utah Code"), and other applicable provisions of law; WHEREAS, for the purposes set forth above, the City has determined (a) to issue its Sales and Excise Tax Revenue Bonds in an aggregate principal amount not to exceed $12,000,000 (the "Series 2014B Bonds") (subject to the further limitations outlined herein) pursuant to the Master Trust Indenture, dated as of September 1, 2004, as amended and supplemented to the date hereof (the "Master Indenture"), and a Tenth Supplemental Trust Indenture (the "Tenth Supplemental Indenture"), between the City and Zions First National Bank, as trustee (the "Trustee") (the Master Indenture and the Tenth Supplemental Indenture are sometimes collectively referred to hereinafter as the "Indenture"), and (b) to cause the proceeds of the sale of the Series 2014B Bonds to be applied in accordance with the Indenture; WHEREAS, the City is authorized by the Utah Code to acquire, construct and improve the Series 2014B Project, to enter into the Tenth Supplemental Indenture, and to issue the Series 2014B Bonds to finance a portion of the cost of acquisition, construction and improvement of the 3610968.01.03.doc 8706145/RDB/mo CIP Delegating Bond Resolution Series 2014B Project, to fund any necessary reserves, and to pay all related costs authorized by law; WHEREAS, in satisfaction of the requirements to Section 11-14-318 of the Utah Code, the City, on Tuesday, August 12, 2014, held a public hearing after due notice thereof to receive input from the public with respect to the issuance of the Series 2014B Bonds and the potential economic impact that the Series 2014B Project will have on the private sector; WHEREAS, no written petition requesting an election with respect to the issuance of the Series 2014B Bonds has been filed with the City since August 3, 2014, as permitted by Section 11-14-307(7) of the Utah Code; WHEREAS, the City Council of the City adopted a resolution on July 29, 2014 (the "Parameters Resolution"), approving the issuance of the Series 2014B Bonds, calling for the publication of a "Notice of Bonds to be Issued," and setting certain parameters for the Series 2014B Bonds; WHEREAS, the Notice of Bonds to be Issued was published pursuant to the Parameters Resolution on , 2014, in The Salt Lake Tribune and the Deseret News, newspapers having general circulation in the City; WHEREAS, no action contesting the legality of the Series 2014B Bonds has been filed to the date hereof, as permitted by Section 11-14-316 of the Utah Code; and WHEREAS, in the opinion of the City, it is in the best interests of the City that (a) the Designated Officers (defined below) be authorized to approve the final terms and provisions relating to the Series 2014B Bonds and to execute the Certificate of Determination (defined below) containing such terms and provisions; and (b) the Mayor be authorized to execute the Official Statement with respect to the Series 2014B Bonds, all as provided herein; Now, THEREFORE, BE IT RESOLVED by the City Council of Salt Lake City, Utah, as follows: Section 1. Issuance of Bonds. (a) For the purposes set forth above, there is hereby authorized and directed the execution, issuance, sale and delivery of the Series 2014B Bonds in the aggregate principal amount not to exceed $12,000,000. The Series 2014B Bonds shall be dated as of the date of the initial delivery thereof. The Series 2014B Bonds shall be in authorized denominations, shall be payable, and shall be executed and delivered all as provided in the Indenture. The Series 2014B Bonds shall be subject to redemption prior to maturity as provided in the Indenture. (b) The form of the Series 2014B Bonds set forth in the form Tenth Supplemental Indenture, subject to appropriate insertions and revisions in order to comply with the provisions of the Indenture, is hereby approved. - 2 - CIP Delegating Bond Resolution ( c) The Series 2014B Bonds shall be special obligations of the City, payable from and secured by a pledge and assignment of the Revenues ( as defined in the Indenture) received by the City and of certain other moneys held under the Indenture on a parity with any other Bonds (as defined in the Indenture) issued from time to time under the Master Indenture, including but not limited to the City's (i) Adjustable Rate Sales Tax Revenue Refunding Bonds, Series 2004, (ii) Sales Tax Revenue Refunding Bonds, Series 2005A, (iii) Sales Tax Revenue Bonds, Series 2007 A, (iv) Sales Tax Revenue Bonds, Series 2009A, (v) Sales and Excise Tax Revenue Bonds, Series 2012A, (vi) Federally Taxable Sales and Excise Tax Revenue Bonds, Series 2013A, (vii) Sales and Excise Tax Revenue Bonds, Series 2013B, and (viii) Federally Taxable Sales and Excise Tax Revenue Refunding Bonds, Series 2014A. The Series 2014B Bonds shall not be obligations of the State or any other political subdivision thereof, other than the City, and neither the faith and credit nor the ad valorem taxing or appropriation power of the State or any political subdivision thereof, including the City, is pledged to the payment of the Series 2014B Bonds. The Series 2014B Bonds shall not constitute general obligations of the City or any other entity or body, municipal, state or otherwise. Section 2. Series 2014B Bond Details; Delegation of Authority. (a) The Series 2014B Bonds shall mature on October 1 of the years and in the principal amounts, and shall bear interest (calculated on the basis of a year of 360 days consisting of twelve 30-day months) from the Closing Date, payable semiannually on April 1 and October 1 of each year, and at the rates per annum and commencing on the dates, all as provided in that certain Certificate of Determination, a form of which is attached hereto as Exhibit B, of the Designated Officers delivered pursuant to this Section 2, setting forth certain terms and provisions of the Series 2014B Bonds (the "Certificate of Determination"). (b) There is hereby delegated to the Designated Officers, subject to the limitations contained in this resolution and the Parameters Resolution, the power to determine and effectuate the following with respect to the Series 2014B Bonds and the Designated Officers are hereby authorized to make such determinations and effectuations: (i) the principal amount of each series of the Series 2014B Bonds necessary to accomplish the purpose of the Series 2014B Bonds set forth in the recitals hereto and the aggregate principal amount of each series of the Series 2014B Bonds to be executed and delivered pursuant to the Indenture; provided that the aggregate principal amount of the Series 2014B Bonds shall not exceed Twelve Million Dollars ($12,000,000); (ii) the maturity date or dates and principal amount of each maturity of the Series 2014B Bonds to be issued; provided, however, that the Series 2014B Bonds mature over a period of not to exceed twenty-one (21) years from their date or dates; (iii) the interest rate or rates of the Series 2014B Bonds and the date on which payment of such interest commences, provided, however, that the interest rate or rates to be borne by any Series 2014B Bond shall not exceed six percent (6.00%) per annum; (iv) the sale of the Series 2014B Bonds and the purchase price to be paid by the purchaser or underwriter of such Series 2014B Bonds; provided, however, that the - 3 - CIP Delegating Bond Resolution discount from par of each series of the Series 2014B Bonds shall not exceed two percent (2.00%) ( expressed as a percentage of the principal amount); (v) the Series 2014B Bonds, if any, to be retired from mandatory sinking fund redemption payments and the dates and the amounts thereof; (vi) the time and redemption price at which the Series 2014B Bonds may be called for redemption prior to their maturity at the option of the City; provided, however, that the first call date for the Series 2014B Bonds shall not be later than eleven years from the dated date of such Series 2014B Bonds; (vii) the amount of reserves necessary to be maintained in connection with the Series 2014B Bonds, if any; (viii) the use and deposit of the proceeds of the Series 2014B Bonds; and (ix) any other provisions deemed advisable by the Designated Officers not materially in conflict with the provisions of this resolution and the Parameters Resolution. For purposes of this resolution and the Series 2014B Bonds, "Designated Officers" means (a) the (i) Mayor of the City, or (ii) in the event of the absence or incapacity of the Mayor, the Mayor's Chief of Staff, or (iii) in the event of the absence or incapacity of both the Mayor and the Mayor's Chief of Staff, the City Treasurer, or (vi) in the event of the absence or incapacity of the Mayor, the Mayor's Chief of Staff and the City Treasurer, the Debt Manager of the City and (b) (i) the Chair of the City Council; or (ii) in the event of the absence or incapacity of the Chair of the City Council, the Vice Chair of the City Council; or (iii) in the event of the absence or incapacity of both the Chair and Vice Chair of the City Council, any other member of the City Council. Following the sale of the Series 2014B Bonds, the Designated Officers shall obtain such information as they deem necessary to make such determinations as provided above and shall make such determinations as provided above and shall execute the Certificate of Determination containing such terms and provisions of such series of the Series 2014B Bonds, which execution shall be conclusive evidence of the action or determination of the Designated Officers as to the matters stated therein. The provisions of the Certificate of Determination shall be deemed to be incorporated into this Section 2. If the Series 2014B Bonds are sold pursuant to a competitive bid process, and if the Designated Officers determine that it is in the best interest of the City, the Designated Officers may (a) waive any irregularity or informality in any bid or in the electronic bidding process; and (b) reject any and all bids for a series of the Series 2014B Bonds. The method of sale of the Series 2014B Bonds shall be determined by the City Treasurer, after consultation with representatives of Lewis Young Robertson & Burningham, the City's financial advisor. Section 3. Approval and Execution of the Tenth Supplemental Indenture. The Tenth Supplemental Indenture, in substantially the form attached hereto as Exhibit A, is hereby -4- CIP Delegating Bond Resolution authorized and approved, and the Mayor or the Deputy Mayor is hereby authorized, empowered and directed to execute and deliver the Tenth Supplemental Indenture on behalf of the City, and the City Recorder or any Deputy City Recorder is hereby authorized, empowered and directed to affix to the Tenth Supplemental Indenture the seal of the City and to attest such seal and countersign such Tenth Supplemental Indenture, with such changes to the Tenth Supplemental Indenture from the form attached hereto as are approved by the Mayor or the Deputy Mayor, his execution thereof to constitute conclusive evidence of such approval. The provisions of the Tenth Supplemental Indenture, as executed and delivered, are hereby incorporated in and made a part of this resolution. The Master Indenture and the Tenth Supplemental Indenture shall constitute a "system of registration" for all purposes of the Registered Public Obligations Act of Utah. Section 4. Final Official Statement. The final Official Statement of the City in substantially the form of the Preliminary Official Statement presented at this meeting and in the form attached hereto as Exhibit C, is hereby authorized with such changes, omissions, insertions and revisions as the Mayor shall deem advisable, including the completion thereof with the information established at the time of the sale of the Series 2014B Bonds by the Designated Officers and set forth in the Certificate of Determination. The Mayor shall sign and deliver the final Official Statement for distribution to prospective purchasers of each series of the Series 2014B Bonds and other interested persons. The approval of the Mayor of any such changes, omissions, insertions and revisions shall be conclusively established by the Mayor's execution of such final Official Statement. Section 5. Preliminary Official Statement Deemed Final. The use and distribution of the Preliminary Official Statement, in substantially the form presented at this meeting and in the form attached hereto as Exhibit C, is hereby authorized and approved, with such changes, omissions, insertions and revisions as the Mayor and the City Treasurer shall deem advisable. The Mayor and the City Treasurer are, and each of them is, hereby authorized to do or perform all such acts and to execute all such certificates, documents and other instruments as may be necessary or advisable to provide for the issuance, sale and delivery of the Series 2014B Bonds and to deem final the Preliminary Official Statement within the meaning and for purposes of paragraph (b)(l) of Rule 15c2-12 of the Securities and Exchange Commission, subject to completion thereof with the information established at the time of the sale of the Series 2014B Bonds. Section 6. Other Certificates and Documents Required to Evidence Compliance with Federal Tax and Securities Laws. Each of the Mayor or the Deputy Mayor, the City Recorder or any Deputy City Recorder and the City Treasurer or the Debt Manager of the City is hereby authorized and directed to execute (a) such certificates and documents as are required to evidence compliance with the federal laws relating to the tax-exempt status of interest on the Series 2014B Bonds and (b) a Continuing Disclosure Agreement, in substantially the form attached hereto as Exhibit D, and such other certificates and documents as shall be necessary to comply with the requirements of Rule 15c2-12 of the Securities and Exchange Commission and other applicable federal securities laws. - 5 - CIP Delegating Bond Resolution Section 7. Other Actions With Respect to the Series 2014B Bonds. The officers and employees of the City shall take all action necessary or reasonably required to carry out, give effect to, and consummate the transactions contemplated hereby and shall take all action necessary in conformity with the Act to carry out the issuance of the Series 2014B Bonds, including, without limitation, the execution and delivery of any closing and other documents required to be delivered in connection with the sale and delivery of the Series 2014B Bonds. If (a) the Mayor, (b) the City Recorder or (c) the City Treasurer shall be unavailable or unable to execute or attest and countersign, respectively, the Series 2014B Bonds or the other documents that they are hereby authorized to execute, attest and countersign, the same may be executed, or attested and countersigned, respectively, (i) by the Deputy Mayor, (ii) by any Deputy City Recorder or (iii) by the Debt Manager of the City. Without limiting the generality of the foregoing, the officers and employees of the City are authorized and directed to take such action as shall be necessary and appropriate to issue the Series 2014B Bonds. Section 8. City Recorder to Perform Certain Acts. The City Recorder is hereby directed to maintain a copy of this Resolution (together with all exhibits hereto), a copy of the Master Indenture and the form of the Tenth Supplemental Indenture on file in the City Recorder's office during regular business hours for public examination by registered voters of the City and other interested persons until at least thirty (30) days from and after the date of adoption hereof. Section 9. Prior Acts Ratified, Approved and Confirmed. All acts of the officers and employees of the City in connection with the issuance of the Series 2014B Bonds are hereby ratified, approved and confirmed. Section JO. Resolution lrrepealable. Following the execution and delivery of the Tenth Supplemental Indenture, this resolution shall be and remain irrepealable until all of the Series 2014B Bonds and the interest thereon shall have been fully paid, cancelled, and discharged. Section I I. Severability. If any section, paragraph, clause, or provision of this resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause, or provision shall not affect any of the remaining provisions of this resolution. Section I 2. Effective Date. This resolution shall be effective immediately upon its approval and adoption. (Signature page follows.) - 6 - CIP Delegating Bond Resolution ADOPTED AND APPROVED by the City Council of Salt Lake City, Utah, this __ day of ____ ,2014. SALT LAKE CITY, UTAH Chair Salt Lake City Council ATTEST: City Recorder [SEAL] APPROVED: By--------------- Mayor APPROVED AS TO FORM: - 7 - CIP Delegating Bond Resolution E X HI B IT E CURRE NTLY A NTICIPATED SERIE S 2014B PROJECTS PROJECT TITLE Lindsey Gardens Playground Fairmont Park Tennis Courts 11th Ave Tennis Courts Fairmont Park Soccer Field Fairmont Park Dog-Off Leash Area Downtown Cycle Track Network Traffic Signal Installation Wakara Way Traffic Signal East Central City Pedestrian Safety Justice Courts HY AC - Energy Conservation Memorial House Retaining Wall - Ph II Fire Station #4 Retaining Wall PROJECT DESCRIPTION Remove and replace existing playground equipment and new ADA playground equipment and play area sand in play area Relocation and construction of two post-tension concrete tennis courts. Seismic Repairs Project Reconstruct eight existing tennis courts. Provide soccer improvements. Develop and construct fencing and other amenities for a dog-off-leash area at the southeast corner of Fairmont Park. Design and construct approximately 2 to 3 miles of a Downtown Cycle Track. Design and construct a new traffic signal on 1100 East and South Temple. Design and construct a traffic signal at the intersection of Wakara Way and Arapeen Drive. Provide for installation of pedestrian activated flashing LED warning lights at crosswalks on 100 South at 1000 and 1200 East. Modify inadequate HVAC system. Engineer, design, construct and replace the remaining original portion of the retaining wall. Engineer, design and construct and replace the retaining wall. Remove bumpers surrounding the seismic base isolators and construct a fail-safe gravity support mechanism. Sunnyside Improvements Install improvements near 800 South/Sunnyside Avenue. McClelland Trail Project Design and construct the Jordan and Salt Lake City Canal Trail. E-1 CIP Delegating Bond Resolution Chapman and Cutler LLP Draft of 06/24/14 RESOLUTION No. OF 2014 Consideration of a Resolution providing for the holding of a public hearing relating to the issuance of sales and excise tax revenue bonds to finance various improvements to City buildings, parks, property and roads and providing for related matters. *** *** *** WHEREAS, the City Council (the "Council") of Salt Lake City, Salt Lake County, Utah (the "City") considers it desirable and necessary and for the benefit of the City to issue up to $12,000,000 of its sales and excise tax revenue bonds (the "Bonds") for the purpose of (a) financing all or a portion of the cost of the acquisition, construction and improvement of various City buildings, parks, property and roads, as further described in Annex 3 hereof and various other capital improvement program projects (collectively, the "Project"), (b) providing capitalized interest to pay all or a portion of the interest accruing on the Bonds during the acquisition, construction and improvement of the Project; (c) funding any necessary reserves and contingencies in connection with the Bonds, and (d) paying the costs incurred in connection with the issuance and sale of the Bonds; WHEREAS, pursuant to the provisions of the Local Government Bonding Act, Title 11, Chapter 14, Utah Code Annotated 1953, as amended (the "Act"), the City has the authority to issue its sales and excise tax revenue bonds for the foregoing purposes; WHEREAS, Section 11-14-318 of the Act requires that a public hearing be held to receive input from the public with respect to the issuance of Bonds and the potential economic impact that the Project will have on the private sector and that notice of such public hearing be given as provided by law and, in satisfaction of such requirement, the City desires to publish a Notice of Public Hearing and Intent to Issue Sales and Excise Tax Revenue Bonds (the "Notice of Public Hearing") pursuant to such Section; WHEREAS, Section 11-14-307(7) of the Act requires the City to submit the question of whether or not to issue the Bonds to voters for their approval or rejection if, within 30 calendar days after the publication of the Notice of Public Hearing, a written petition requesting an election and signed by at least 20% of the registered voters in the City is filed with the City; and WHEREAS, the City desires (a) to provide for the holding of a public hearing and (b) to direct the publication of the Notice of Public Hearing and to provide for the form of the written petition requesting an election, as required by law; Now, THEREFORE, BE IT RESOLVED by the City Council of Salt Lake City, Salt Lake County, Utah, as follows: Section 1. Findings and Determinations. The Council hereby finds, determines and declares that the financing of the Project is in the public interest and is in the best interest of the City and the businesses, residents and consumers within the City. 3612688.01 .02.doc 8706145/RDB/mo CIP Public Hearing Resolution Section 2. Public Hearing. In satisfaction of the requirements of Section 11-14-318 of the Act, a public hearing shall be held by the Council on Tuesday, August 12, 2014, during the Council meeting which begins at 7:00 p.m., at the regular meeting place of the Council in the Council Chambers, Room 315 in the City and County Building, 451 South State Street, in Salt Lake City, Utah, to receive input from the public with respect to the issuance by the City of the Bonds and the potential economic impact that the Project will have on the private sector. Section 3. Publication of Notice of Public Hearing. The City Recorder or any Deputy City Recorder (the "City Recorder") shall publish or cause to be published the Notice of Public Hearing in The Salt Lake Tribune and the Deseret News, newspapers having general circulation in Salt Lake City, Utah, and in which notices relative to the City are customarily published. Such notice shall be published once a week for two consecutive weeks, with the first publication being at least 14 days prior to the date set for the public hearing. The Notice of Public Hearing shall be in substantially the form attached hereto as Annex 1. Section 4. Form of Petition. The form of the petition to be used by registered voters in requesting that an election be called to authorize the Bonds shall be in substantially the form attached hereto as Annex 2. Section 5. City Recorder to Perform Certain Acts. The City Recorder is hereby directed to maintain a certified copy of this Resolution on file in office of the City Recorder during regular business hours for inspection by registered voters of the City, and other interested persons, and upon request to supply copies of the form of petition specified in Section 4 hereof. Section 6. Issuance of Bonds After Thirty-Day Period. In accordance with the provisions of Section 11-14-307(7) of the Act, if within thirty days after the final publication of the Notice of Public Hearing, a petition or petitions, in the form specified by Section 4 hereof, are filed with the City Recorder, signed by not less than twenty percent (20%) of the registered voters of the City (as certified by the County Clerk of Salt Lake County) requesting that an election be called to authorize the Bonds, then the Council shall proceed to call and hold an election on the Bonds. If such election is held and a majority of the registered voters of the City voting thereon approve the Bonds, then, in accordance with the provisions of the Act, the City shall thereupon be authorized to issue the Bonds. If no petition is filed within the thirty-day period after the date of the final publication of such notice, or if it is determined that the number of signatures on the petitions filed within the thirty-day period after the date of the final publication of such notice is less than the required number, the City shall proceed to issue the Bonds. Section 7. Severability. It is hereby declared that all parts of this Resolution are severable, and if any section, paragraph, clause or provision of this Resolution shall, for any reason, be held to be invalid or unenforceable, the invalidity or unenforceability of any such section, paragraph, clause or provision shall not affect the remaining sections, paragraphs, clauses or provisions of this Resolution. Section 8. Repealer. All resolutions or parts thereof in conflict herewith are, to the extent of such conflict, hereby repealed. - 2 - CIP Public Hearing Resolution iS<J:!., ADOPTED and APPROVED by the City Council and the Mayor of Salt Lake City, Salt Lake County, Utah, this 15th day of July, 2014. SALT LAKE CITY, SALT LAKE COUNTY, UTAH By---------------- Chair [SEAL] ATTEST: By _ City Recorder APPROVED: By---------------- Mayor APPROVED AS TO FORM: By ii~~ seniority Attorney -4- CIP Public Hearing Resolution ANNEXl SALT LAKE CITY, UTAH NOTICE OF PUBLIC HEARING AND INTENT TO ISSUE SALES AND EXCISE TAX REVENUE BONDS PUBLIC NOTICE IS HEREBY GIVEN that on July 15, 2014, the City Council (the "Council") of Salt Lake City, Utah (the "City"), adopted a resolution (the "Resolution"), calling a public hearing to receive input from the public with respect to the issuance of its Sales and Excise Tax Revenue Bonds (the "Bonds") to finance all or a portion of the cost of acquiring, constructing and improving various City buildings, parks, property and roads, as further described in the Resolution and of acquiring, constructing, improving and remodeling various other capital improvement program projects (collectively, the "Project") and the potential economic impact that the Project will have on the private sector, pursuant to the Local Government Bonding Act, Title 11, Chapter 14, Utah Code Annotated 1953, as amended (the "Act"). PURPOSE FOR ISSUING BONDS The City intends to issue the Bonds for the purpose of (1) financing all or a portion of the costs of the acquisition, construction, improvement and remodeling of the Project, (2) providing capitalized interest to pay all or a portion of the interest accruing on the Bonds during the acquisition, construction, improvement and remodeling of the Project; (3) funding any necessary reserves and contingencies in connection with the Bonds, and (4) paying the costs incurred in connection with the issuance and sale of the Bonds. MAXIMUM PRINCIPAL AMOUNT OF THE BONDS The City intends to issue the Bonds in an aggregate principal amount not exceeding Twelve Million Dollars ($12,000,000). SALES TAXES PROPOSED TO BE PLEDGED The City proposes to pledge to the payment of the Bonds all of the legally available revenues from: (a) Local Sales and Use Taxes received by the City pursuant to Title 59, Chapter 12, Part 2, Utah Code (currently levied and collected pursuant to Chapter 3.04 of the Salt Lake City Code); (b) Municipal Energy Sales and Use Taxes received by the City pursuant to Title 10, Chapter 1, Part 3, Utah Code (currently levied and collected pursuant to Chapter 3.06 of the Salt Lake City Code); (c) the franchise fees for energy and utilities received by the City pursuant to Title 10, Chapter 1, Part 3, Utah Code (currently levied and collected pursuant to Chapter 3.06 of Salt Lake City Code); (d) the Municipal Telecommunications License Tax revenues received by the City pursuant to Title 10, Chapter 1, Part 4, Utah Code (currently levied and collected pursuant to Chapter 3.10 of Salt Lake City Code); (e) the franchise fees associated with public utilities received by the City pursuant to Title 10, Chapter 1, Part 3, Utah Code (currently levied and collected pursuant to Chapter 17 .16.070 of Salt Lake City Code); and (f) the franchise fees Annex 1-1 CIP Public Hearing Resolution associated with cable television received by the City pursuant to Salt Lake City Code Chapter 5 .20. TIME, PLACE AND LOCATION OF PUBLIC HEARING The City will hold a public hearing during its City Council meeting which begins at 7:00 p.m. on August 12, 2014. The public hearing will be held at the regular meeting place of the Council in the Council Chambers, Room 315 in the City and County Building, 451 South State Street, in Salt Lake City, Utah. All members of the public are invited to attend and participate in the public hearing. Written comments may be submitted to the City, to the attention of the City Recorder, prior to the public hearing. PURPOSE FOR HEARING The purpose of the hearing is to receive input from the public with respect to the issuance of the Bonds and the potential economic impact that the Project will have on the private sector. NOTICE OF RIGHT TO FILE PETITION TO HOLD AN ELECTION NOTICE IS FURTHER GIVEN that pursuant to Section 11-14-307(7), Utah Code, if within 30 calendar days of the final publication of this notice on [August 3, 2014], a written petition requesting an election and signed by at least twenty percent (20%) of the registered voters of the City is filed with the City, then the City shall submit the question of whether or not to issue the Bonds to the voters of the City for their approval or rejection. If no written petition is filed or if fewer than 20% of the registered voters of the City sign a written petition, in either case, within 30 calendar days of the final publication of this notice on [August 3, 2014], the City may proceed to issue the Bonds without an election. SALT LAKE CITY, UTAH By---------------- City Recorder Annex 1-2 CIP Public Hearing Resolution A N N E X 2 P E TI T IO N To: City Recorder Salt Lake City, Utah We, the undersigned citizens and registered voters of Salt Lake City, Utah, respectfully request that an election be called by the City Council of Salt Lake City, Utah, pursuant to the provisions of Section 11-14-307(7), Utah Code Annotated 1953, as amended, to authorize the issuance by Salt Lake City, Utah, of its Sales and Excise Tax Revenue Bonds, in a maximum principal amount not exceeding $12,000,000, as to which notice of intention to issue was published on [July 27, 2014] and [August 3, 2014], in The Salt Lake Tribune and the Deseret News pursuant to the provisions of a resolution passed by the City Council of Salt Lake City, Utah, at a regular meeting of the City Council held on July 15, 2014, and each for himself or herself says: I have personally signed this petition; I am a registered voter of Salt Lake City, Utah; my residence and post office address are correctly written after my name: Annex 2-1 CIP Public Hearing Resolution WARNING It is a felony for any one to sign any initiative or referendum petition with any other name than one's own, or knowingly to sign one's name more than once for the same measure, or to sign such petition when one knows that he or she is not a registered voter. REGISTERED VOTER'S PRINTED NAME (MUST BE LEGIBLE TO BE COUNTED) SIGNATURE OF REGISTERED VOTER STREET ADDRESS,CITY,STATE, ZIP CODE [The following certification shall appear on the reverse side of each page Annex 2-2 CIP Public Hearing Resolution [attached to the Petition containing the signature of voters] STATE OF UTAH ) : ss. COUNTY OF SALT LAKE ) I, , of , hereby certify that I am a registered voter of Salt Lake City, Salt Lake County, Utah, that all the names which appear on this sheet were signed by persons who professed to be the persons whose names appear thereon, and each of them signed his or her name thereto in my presence, I believe that each has printed and signed his or her name, and written his or her post office address and residence correctly, and that each signer is a registered voter of Salt Lake City, Salt Lake County, Utah. Subscribed and sworn to before me this __ day of , 2014. Notary Public (or other official title) Annex 2-3 CIP Public Hearing Resolution ANNEX3 CURRENTLY ANTICIPATED PROJECTS PROJECT TITLE Lindsey Gardens Playground Fairmont Park Tennis Courts 11th Ave Tennis Courts Fairmont Park Soccer Field Fairmont Park Dog-Off Leash Area Downtown Cycle Track Network Traffic Signal Installation Wakara Way Traffic Signal East Central City Pedestrian Safety Justice Courts HV AC - Energy Conservation Memorial House Retaining Wall - Ph II Fire Station #4 Retaining Wall PROJECT DESCRIPTION Remove and replace existing playground equipment and new ADA playground equipment and play area sand in play area Relocation and construction of two post-tension concrete tennis courts. Seismic Repairs Project Reconstruct eight existing tennis courts. Provide soccer improvements. Develop and construct fencing and other amenities for a dog-off-leash area at the southeast comer of Fairmont Park. Design and construct approximately 2 to 3 miles of a Downtown Cycle Track. Design and construct a new traffic signal on 1100 East and South Temple. Design and construct a traffic signal at the intersection of Wakara Way and Arapeen Drive. Provide for installation of pedestrian activated flashing LED warning lights at crosswalks on 100 South at 1000 and 1200 East. Modify inadequate HVAC system. Engineer, design, construct and replace the remaining original portion of the retaining wall. Engineer, design and construct and replace the retaining wall. Remove bumpers surrounding the seismic base isolators and construct a fail-safe gravity support mechanism. Sunnyside Improvements Install improvements near 800 South/Sunnyside Avenue. McClelland Trail Project Design and construct the Jordan and Salt Lake City Canal Trail. Annex 3-1 CIP Public Hearing Resolution ,,.,. PRELIMINARY OFFICIAL STATEMENT DATED _ '°.,.,Chapman and Cutler LLP- Draft of 06/20/ 14 ,2014 NEW ISSUE-Issued in Book-Entry Only Form Subject to compliance by the City with certain covenants, in the opinion of Chapman and Cutler LLP, Bond Counsel, under present law, interest on the Series 2014B Bonds is excludable from gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations, but such interest is taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. In the opinion of Bond Counsel, under the existing laws of the State of Utah, as presently enacted and construed, interest on the Series 2014B Bonds is exempt from taxes imposed by the Utah Individual Income Tax Act. See "TAX EXEMPTION" herein for a more complete discussion. $ * SALT LAKE CITY, UTAH SALES AND EXCISE TAX REVENUE BONDS SERIES 2014B DATED: Date of Delivery DUE: October 1, as shown below The$ * Sales and Excise Tax Revenue Bonds, Series 20 14B, dated the date of delivery thereof, are issuable by the City as fully-registered bonds and, when initially issued, will be in book-entry form only, registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York. DTC will act as securities depository for the Series 2014B Bonds. The Series 2014B Bonds are being issued to (a) finance a portion of the cost of (i) the acquisition, construction and improvement of various City buildings, parks, property and roads and (ii) acquiring, constru cting, improving and remodeling various other capital improvement program projects and (b) pay the costs incurred in connection with the issuance and sale of the Series 2014B Bonds. Principal of and interest on the Series 2014B Bonds (interest payable April l and October l of each year, commencing _ l, 20 1_) are payable by Zions First National Bank, Salt Lake City, Utah, as Trustee, to the registered owners thereof, initially DTC. See "THE SERIES 2014B BONDS -Book-Entry Only System" herein. The Series 2014B Bonds are subject to optional redemption prior to maturity as more fully described under the heading "THE SERIES 2014 B BONDS - Redemption Provisions" herein. The Series 2014B Bonds are special limited obligations of the City payable solely from the Revenues, moneys, securities and funds pledged therefor under the Indenture on a parity basis with Bonds, including the Outstanding Parity Bonds, that have been or may be issued by the City pursuant to the provisions of the Indenture. The Revenues consist of the Pledged Excise Taxes. No assurance can be given that the Revenues will remain sufficient for the payment of the Principal of or interest on the Series 2014B Bonds, and the City is limited by Ut ah law in its ability to increase the rate of the Pledged Excise Taxes. See "RISK FACTORS" herein. The Series 2014B Bonds do not constitute a general obligation indebtedness or a pledge of the ad valorem taxing power or the full faith and credit of the City, and are not obligations of the State of Utah or any other agency or other political subdivision or entity of the State of Utah. The City will not mortgage or grant any security interest in the improvements financed with the proceeds of the Series 2014B Bonds or any portion thereof to secure payment of the Series 20 14A Bonds. See "SECURITY FOR THE SERIES 2014B BONDS" herein. Maturity Schedule Due October I Principal Amount* $ Interest Rate % Yield % CUSIP Due October 1 Principal Amount* RATINGS: S&P" " Moody's .. -,, See "RA TINGS" herein. Interest Rate % Yield % CUSIP The Bonds will be awarded pursuant to competitive bidding to be held via the PARITY® electronic bid submission system on Tuesday, August 26, 2014, as set forth in the Official Notice of Bond Sale (dated the date of this Preliminary Official Statement). Lewis Young Robertson & Burningham, Inc. will act as Financial Advisor. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. This Official Statement is dated , 2014 and the inform ation contained herein speaks only as of that date. * Preliminary; subject to change. 3612306.0l.02.doc-8706145/RDB/mo $. * SALT LAKE CITY, UTAH SALES AND EXCISE TAX REVENUE BONDS SERIES 2014B Salt Lake City City and County Building 451 South State Street Salt Lake City, U tab 84111 (801) 535-7946 CITY COUNCIL Charlie Luke Council Chair Luke Garrott Council Vice Chair Lisa Ramsey Adams Council Member Kyle LaMalfa Council Member Erin J. Robinson Mendenhall Council Member Stan Penfold Council Member James Rogers Council Member CITY ADMINISTRATION Ralph Becker Mayor David Everitt Chief of Staff Margaret D. Plane City Attorney Cindi Mansell City Recorder Marina Scott City Treasurer BOND COUNSEL Chapman and Cutler LLP 201 South Main, Suite 2000 Salt Lake City, Utah 84111 (801) 533-0066; (801) 533-9595 (Fax) FINANCIAL ADVISOR Lewis Young Robertson & Burningham, Inc. 41 North Rio Grande Suite 101 Salt Lake City, Utah 84101 (801) 596-0700; (801) 596-2800 (Fax) INDEPENDENT AUDITORS Eide Bailly LLP 5 Triad Center, Suite 750 Salt Lake City, Utah 84180 (801) 532-2200; (801) 532-7944 (Fax) TRUSTEE, REGISTRAR AND PA YING AGENT Zions First National Bank One South Main Street, 12th Floor Salt Lake City, Utah 84133 (801) 844-7517; (855) 547-5637 (Fax) * Preliminary ; subject to change. The information set forth herein has been obtained from the Salt Lake City, Utah (the "City"), The Depository Trust Company and other sources that are believed to be reliable. No dealer, broker, salesperson or any other person has been authorized by the City or the successful bidder(s) to give any information or to make any representations other than those contained in this Official Statement in connection with the offering contained herein, and, if given or made, such information or representations must not be relied upon as having been authorized by the successful bidder(s). This Official Statement does not constitute an offer to sell or solicitation of an offer to buy, nor shall there be any sale of, the Series 2014B Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information and expressions of opinion herein are subject to change without notice, and neither delivery of this Official Statement nor any sale made thereafter shall under any circumstances create any implication that there has been no change in the affairs of the City or in any other information contained herein since the date hereof. IN CONNECTION WITH THIS OFFERING, THE SUCCESSFUL BIDDER(S) MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SERIES 2014B BONDS. SUCH TRANSACTIONS MAY INCLUDE OVERALLOTMENTS IN CONNECTION WITH THE PURCHASE OF SERIES 2014B BONDS, THE PURCHASE OF SERIES 2014B BONDS TO STABILIZE THEIR MARKET PRICE, THE PURCHASE OF SERIES 2014B BONDS TO COVER THE SUCCESSFUL BIDDER's(s') SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. SUCH TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. This Official Statement contains "forward-looking statements" within the meaning of the federal securities laws. These forward-looking statements include, among others, statements concerning expectations, beliefs, opinions, future plans and strategies, anticipated. events or trends and similar expressions concerning matters that are not historical facts. The forward- looking statements in this Official Statement are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by such statements. THESE SECURITIES HA VE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The City maintains a website. However, the information presented on that website is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Series 2014B Bonds. '· TABLE OF CONTENTS PAGE INT RODUCTION 1 The City 1 Authorization and Purpose of the Series 20 14 B Bonds 2 Security and Source of Payment .2 Outstanding Parity Bonds .3 Additional Bonds 3 No Debt Service Reserve 4 Redemption 4 Registration, Denomination and Manner of Payment.. .4 Tax Treatment 4 Conditions of Delivery, Anticipated Date, Manner and Place of Delivery .5 Continuing Disclosure 5 Basic Documentation .5 Contact Person 6 Public Sale/Electronic Bid 6 Additional Information 6 SOURCES AND USES OF FUNDS 7 THE SERIES 2014B BONDS 7 General 7 Book-Entry Only System 8 Payment of Principal and Interest 8 Redemption Provisions 8 Notice of Redemption 9 Registration, Transfer and Exchange 9 SECURITY FOR THE SERIES 2014B BONDS 10 Pledged Excise Taxes 10 State Pledge of Nonimpairment 14 Flow of Funds 15 No Debt Service Reserve 15 Outstanding Parity Bonds 16 Additional Bonds 16 DEBT SERVICE SCHEDULE ON THE SERIES 2014B BONDS AND THE OUTSTANDING PARITY BONDS 18 RISK FACTORS 19 Uncertainty of Revenues 19 The Series 2014B Bonds are Limited Obligations .19 Limitation on Increasing Rates for Pledged Excise Taxes 19 Possible Use of Special Revenues to Meet Additional Bonds Test; Reliance on Rating Agencies 20 THE CITY ········································································································································20 City Officials 20 City Administration 21 - 1 - City Fund Structure; Accounting Basis .22 Financial Controls 22 Budget and Appropriation Process .23 Investment Policy 23 Insurance Coverage 25 Employee Workforce and Retirement System; Postemployment Benefits .26 DEBT STRUCTURE 28 Outstanding Debt Issues 28 FUTURE DEBT PLANS ························ 29 RECENT DEVELOPMENTS ·········· 29 FINANCIAL INFORMATION REGARDING THE CITY .30 Five Year Financial Summary .30 Assessed Taxable and Estimated Fair Market Value of Taxable Property 33 Principal Property Taxpayers .34 TAX EXEMPTION 34 Federal Income Taxation 34 Utah Income Taxation 36 No DEFAULTED BONDS 37 CONTINUING DISCLOSURE AGREEMENT 37 RATINGS 38 FINANCIAL ADVISOR 38 LEGAL MATTERS .38 Litigation 38 Approval of Legal Proceedings 39 INDEPENDENT AUDITORS 39 MISCELLANEOUS 40 Additional Information 40 APPENDIX A APPENDIXB APPENDIXC APPENDIXD APPENDIXE APPENDIXF SALT LAKE CITY CORPORATION FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 MASTER TRUST INDENTURE DEMOGRAPHIC AND ECONOMIC INFORMATION REGARDING THE CITY AND SALT LAKE COUNTY PROPOSED FORM OF OPINION OF BOND COUNSEL PROVISIONS REGARDING BOOK-ENTRY ONLY SYSTEM FORM OF CONTINUING DISCLOSURE AGREEMENT - 11 - OFFICIAL STATEMENT RELATING TO $ * SALT LAKE CITY, UTAH SALES AND EXCISE TAX REVENUE BONDS, SERIES 2014B INTRODUCTION This Official Statement, including the cover page, introduction, and appendices, provides information in connection with the issuance and sale by Salt Lake City, Utah (the "City"), of its $ Sales and Excise Tax Revenue Bonds, Series 2014B (the "Series 2014B Bonds"), initially issued in book-entry form only. This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of Series 2014B Bonds to potential investors is made only by means of the entire Official Statement. See also the following appendices attached hereto: "APPENDIX A- SALT LAKE CITY CORPORATION FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013;" "APPENDIX B - MASTER TRUST INDENTURE;" "APPENDIX C - DEMOGRAPHIC AND ECONOMIC INFORMATION REGARDING THE CITY AND SALT LAKE COUNTY;" "APPENDIX D - PROPOSED FORM OF OPINION OF BOND COUNSEL;" "APPENDIX E- PROVISIONS REGARDING BOOK-ENTRY ONLY SYSTEM" and "APPENDIX F - FORM OF CONTINUING DISCLOSURE AGREEMENT." Capitalized terms used herein and not otherwise defined are defined in the conformed copy of the Indenture (defined below) attached hereto as "APPENDIX B - MASTER TRUST INDENTURE.'' THE CITY The City is a municipal corporation and political subdivision of the State of Utah (the "State") and is the capital of the State. The City is the most populous city in the State, with an estimated 2012 population of approximately 189,400. The City has a council-mayor form of government. For more information with respect to the City, see "THE CITY," "DEBT STRUCTURE," "FINANCIAL INFORMATION REGARDING THE CITY," "APPENDIX A- SALT LAKE CITY CORPORATION FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013" and "APPENDIX C-DEMOGRAPHIC AND ECONOMIC INFORMATION REGARDING THE CITY AND SALT LAKE COUNTY." * Preliminary; subject to change. AUTHORIZATION AND PURPOSE OF THE SERIES 2014B BONDS The Series 2014B Bonds are being issued pursuant to (i) the Local Government Bonding Act, Title 11, Chapter 14, Utah Code Annotated 1953, as amended (the "Utah Code"), and other applicable provisions of law (collectively, the "Act"), (ii) a resolution adopted by the City Council of the City on , 2014 (the "Resolution"), that provides for the issuance and delivery of the Series 2014B Bonds, and (iii) a Master Trust Indenture, dated as of September 1, 2004, as heretofore amended and supplemented (the "Master Indenture"), and as further amended and supplemented by a Tenth Supplemental Trust Indenture, dated as of November 1, 2014 (the "Tenth Supplemental Indenture" and, together with the Master Indenture, the "Indenture"), each between the City and Zions First National Bank, as trustee (the "Trustee"). A conformed copy of the Master Indenture is attached hereto as APPENDIX B. The proceeds from the sale of the Series 2014B Bonds will be used for the purpose of (a) financing a portion of the cost of (i) the acquisition, construction and improvement of various City building, parks, property and roads and (ii) acquiring, constructing, improving and remodeling various other capital improvement program projects (collectively, the "Series 2014B Project") and (b) paying the costs incurred in connection with the issuance and sale of the Series 2014B Bonds. SECURITY AND SOURCE OF PAYMENT The Series 2014B Bonds will be special limited obligations of the City, payable solely from and secured solely by a pledge of the Revenues and certain funds and accounts pledged therefor in the Indenture. "Revenues" means, collectively, all of the revenues received by the City that are produced by: (a) local sales and use taxes (the "Local Sales Taxes"); (b) municipal energy sales and use taxes (the "Municipal Energy Taxes"); (c) municipal telecommunications license taxes (the "Telecommunications Taxes" and, collectively with the Local Sales Taxes and the Municipal Energy Taxes, the "Pledged Sales and Use Taxes"); (d) franchise fees for electric energy (the "Energy Franchise Fees"); (e) franchise fees charged to the City's Public Utilities Department (the "Public Utilities Franchise Fees"); and (f) franchise fees associated with cable television (the "Cable Franchise Fees" and, collectively with the Energy Franchise Fees and the Public Utilities Franchise Fees, the "Pledged Franchise Fees"). The term Revenues is used interchangeably herein with the term Pledged Excise Taxes. - 2 - No assurance can be given that the Revenues will remain sufficient for the payment of the Principal or interest on the Series 2014B Bonds and the City is limited by contract or by State law in its ability to increase the rate of the Pledged Excise Taxes. See "RISK FACTORS" herein. The Series 2014B Bonds do not constitute a general obligation indebtedness or a pledge of the ad valorem taxing power or the full faith and credit of the City, and are not obligations of the State or any other agency or other political subdivision or entity of the State. The City will not mortgage or grant any security interest in the Series 2014B Project or any portion thereof to secure payment of the Series 2014B Bonds. See "SECURITY FOR THE SERIES 2014B BONDS" herein. The City currently levies the Pledged Excise Taxes at the maximum rates permitted by State law. In general, the Pledged Sales and Use Taxes are collected by the Utah State Tax Commission (the "Tax Commission") and distributed to the City and all other counties and municipalities in the State on a monthly basis. The Pledged Franchise Fees are collected by the applicable franchisee and distributed to the City as required by contract or ordinance. See "SECURITY FOR THE SERIES 2014B BONDS - Pledged Excise Taxes" and "RISK FACTORS" herein for additional information. OUTSTANDING PARITY BONDS The Series 2014B Bonds will be issued on a parity with any other Bonds (as defined below) issued from time to time under the Master Indenture, including, but not limited to, the City's (i) Adjustable Rate Sales Tax Revenue Refunding Bonds, Series 2004, originally issued in the aggregate principal amount of $17,300,000 (the "Series 2004 Bonds"), (ii) Sales Tax Revenue Refunding Bonds, Series 2005A, originally issued in the aggregate principal amount of $47,355,000 (the "Series 2005A Bonds"), (iii) Sales Tax Revenue Bonds, Series 2007 A, originally issued in the aggregate principal amount of $8,590,000 (the "Series 2007 A Bonds"), (iv) Sales Tax Revenue Bonds, Series 2009A, originally issued in the aggregate principal amount of $36,240,000 (the "Series 2009A Bonds"), (v) Sales Tax Revenue Bonds, Series 2012A, originally issued in the aggregate principal amount of $15,855,000 (the "Series 2012A Bonds"), (vi) Federally Taxable Sales and Excise Tax Revenue Bonds, Series 2013A, originally issued in the aggregate principal amount of $51,270,000 (the "Series 2013A Bonds"), (vii) Sales and Excise Tax Revenue Bonds, Series 2013B, originally issued in the aggregate principal amount of $7,315,000 (the "Series 2013B Bonds"), and (vii) Federally Taxable Sales and Excise Tax Revenue Refunding Bonds, Series 2014A, originally issued in the aggregate principal amount of $ (the "Series 2014A Bonds" and, collectively with the Series 2004 Bonds, the Series 2005A Bonds, the Series 2007A Bonds, the Series 2009A Bonds, the Series 2012A, the Series 2013A Bonds and the Series 2013B Bonds, the "Outstanding Parity Bonds"). ADDITIONAL BONDS The Indenture permits the issuance of additional bonds secured by the Revenues, but requires that the City provide certain certificates relating to certain conditions to the issuance of Additional Bonds (as defined below). Included in these conditions is the requirement that the Revenues for any year within the 24 calendar months next preceding the authentication and delivery of the Bonds proposed to be issued are equal to or greater than 200% of the Maximum - 3 - A n n u al D eb t S erv ice on all O utstan d in g B o n d s u p o n th e issu an ce of th e B o n d s pro p o sed to be issu ed . See "S E C U R IT Y FO R TH E SE R IE S 2 0 14 B B O N D S -A d d itio n al B o n d s" herein . T h e Series 2 0 14 B B o n d s, the O u tstan d in g P arity B o n d s and an y ad d itio n al bo n d s h ereto fo re o r h ereafter issu ed u n d er th e In d en ture (the "Additional Bonds") are referred to collectively herein as the "Bonds." No DEBT SERVICE RESERVE There is no debt service reserve for the Series 2014B Bonds. See "SECURITY FOR THE SERIES 2014B BONDS - No Debt Service Reserve" herein. REDEMPTION The Series 2014B Bonds are subject to optional redemption prior to maturity as described herein. See "THE SERIES 2014B BONDS - Redemption Provisions" herein. REGISTRATION, DENOMINATION AND MANNER OF PAYMENT The Series 2014B Bonds will be issued only as fully-registered bonds, and initially, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). DTC will act as a securities depository for the Series 2014B Bonds and purchases of beneficial interests in the Series 2014B Bonds initially will be made in book-entry only form through brokers and dealers who are, or who act through DTC participants, and under certain circumstances are exchangeable as more fully described herein. The Series 2014B Bonds will be issued in the denomination of $5,000 and any whole multiple thereof. Principal of and any premium on the Series 2014B Bonds are payable upon surrender thereof at the principal corporate trust office of the Trustee, as Paying Agent for the Series 2014B Bonds. Interest on the Series 2014B Bonds is payable on each Interest Payment Date (defined below) to the registered owners thereof (initially DTC), as described herein. So long as DTC or its nominee, Cede & Co., is the registered owner of the Series 2014B Bonds, payments of the Principal of, and interest on such Bonds will be made directly to DTC. See "THE SERIES 2014B BONDS -Book-Entry Only System" herein. TAX TREATMENT Subject to compliance by the City with certain covenants, in the opinion of Chapman and Cutler LLP, Bond Counsel, under present law, interest on the Series 2014B Bonds is excludable from gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations, but such interest is taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. In the opinion of Bond Counsel under the existing laws of the State, as presently enacted and construed, interest on the - 4 - Series 2014B Bonds is exempt from taxes imposed by the Utah Individual Income Tax Act. See "TAX EXEMPTION." CONDITIONS OF DELIVERY, ANTICIPATED DATE, MANNER AND PLACE OF DELIVERY The Bonds are offered, subject to prior sale, when, as and if issued and received by the successful bidder(s), subject to the approving legal opinion of Chapman and Cutler LLP, Bond Counsel, and certain other conditions. Certain legal matters will be passed upon for the City by the City Attorney and by Chapman and Cutler LLP, as the City's Disclosure Counsel. It is expected that the Bonds in book-entry only form will be available for delivery through OTC or its agent on or about , 2014. CONTINUING DISCLOSURE The City will execute a Continuing Disclosure Agreement for the benefit of the beneficial owners of the Series 2014B Bonds to enable the successful bidder(s) to comply with the requirements of Rule 15c2-12 under the Securities Exchange Act of 1934. See "CONTINUING DISCLOSURE AGREEMENT" and "APPENDIX F-FORM OF CONTINUING DISCLOSURE AGREEMENT." BASIC DOCUMENTATION This Official Statement speaks only as of its date, and the information contained herein is subject to change. Brief descriptions of the City and the Series 2014B Bonds are included in this Official Statement. Such descriptions do not purport to be comprehensive or definitive. All references herein to the Indenture are qualified in their entirety by reference to such document, and references herein to the Series 2014B Bonds are qualified in their entirety by reference to the form thereof included in the Indenture and the information with respect thereto included in the aforementioned document, copies of which are available for inspection at the principal office of the Trustee on or after the delivery of the Series 2014B Bonds. Descriptions of the Indenture and the Series 2014B Bonds are qualified by reference to bankruptcy! laws affecting the remedies for the enforcement of the rights and security provided therein and the effect of the exercise of the police power by any entity having jurisdiction. During the period of the offering of the Series 2014B Bonds, copies of the preliminary forms of any of the aforementioned documents will be available from the "contact persons" as indicated herein. Also see "APPENDIX B - MASTER TRUST INDENTURE" herein. The "basic documentation," which includes the Resolutions, the Indenture and other documentation authorizing the issuance of the Series 2014B Bonds and establishing the rights and responsibilities of the City and other parties to the transaction, may be obtained from the "contact persons" as indicated herein. There is currently no specific authorization under the Utah Code for the City to file bankru ptcy under Chapter 9 of the U.S. Bankruptcy Code. - 5 - CONTACT PERSON The primary contact for the City in connection with the issuance of the Series 2014B Bonds is: Marina Scott, City Treasurer 451 South State Street, Room 228 P.O. Box 145462 Salt Lake City, Utah 84114-5462 Telephone: (801) 535-6565; (801) 535-6082 (Fax) e-mail: marina.scott@slcgov.com PUBLIC SALE/ELECTRONIC BID The Series 2014B Bonds will be awarded pursuant to competitive bidding held via the PARITY® bid submission system on Tuesday, August 26, 2014, as set forth in the Official Notice of Bond Sale (dated the date of the Preliminary Official Statement) to _ of _ , at a "true interest rate" of % (based on original bid parameters). ADDITIONAL INFORMATION In preparing this Official Statement, the City has relied upon information furnished by DTC and others. This Official Statement also includes summaries of the terms of the Series 2014B Bonds, the Indenture, certain provisions of the Act and the Utah Code. The summaries of and references to all documents and statutes referred to herein do not purport to be complete, comprehensive or definitive, and each such summary and reference is qualified in its entirety by reference to each such document or statute. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of the fact. This Official Statement is not to be construed as a contract or agreement between the City and the purchasers or owners of any of the Series 2014B Bonds. - 6 - SOURCES AND USES OF FUNDS The estimated sources and uses of funds for the Series 2014B Bonds are shown below: SOURCES OF FUNDS Par Amount of Series 2014B Bonds Net Original Issue Premium Total USES OF FUNDS Deposit to Series 2014B Project Account Purchaser's discount Costs of Issuance'!' $ $=== $ Total $=== (1) Costs oflssuance include legal, Financial Advisor, rating agency and Trustee fees; and other costs and expenses related to the issuance of the Series 2014B Bonds. THE SERIES 2014B BONDS GENERAL The Series 2014B Bonds will be dated the date of delivery thereof and will bear interest from that date (calculated on the basis of a 360-day year consisting of twelve 30-day months), payable semiannually on April 1 and October 1 of each year ( each an "Interest Payment Date" and, collectively, the "Interest Payment Dates"), commencing 1, 201_. The Series 2014B Bonds will mature on the dates and in the amounts and will bear interest at the rates set forth on the cover page of this Official Statement. The Series 2014B Bonds are issuable as fully-registered bonds, without coupons, and when initially issued will be registered in the name of Cede & Co., as nominee of OTC, which will act as securities depository for the Series 2014B Bonds. The Series 2014B Bonds will be issued in the denomination of $5,000 and any whole multiple thereof. So long as the book-entry only system is in effect, purchases of beneficial ownership interests in the Series 2014B Bonds will be made in book-entry form only, in the principal amount of $5,000 and any whole multiple thereof. See "APPENDIX E - PROVISION REGARDING BOOK-ENTRY ONLY SYSTEM." The Series 2014B Bonds are special limited obligations of the City, payable solely from the proceeds of the Bonds, the Revenues, moneys, securities and funds pledged therefor in the Indenture. The Revenues consist of the Pledged Excise Taxes. No assurance can be given that the Revenues will remain sufficient for the payment of the Principal or interest on the Series 2014B Bonds and the City is limited by State law in its ability to increase the rate of the - 7 - Pledged Excise Taxes. See "RISK FACTORS" herein. The Series 2O14B Bonds do not constitute a general obligation indebtedness or a pledge of the ad valorem taxing power or the full faith and credit of the City, and are not obligations of the State or any other agency or other political subdivision or entity of the State. The City will not mortgage or grant any security interest in the Series 2O14B Project or any portion thereof to secure payment of the Series 2O14B Bonds. See "SECURITY FOR THE SERIES 2O14B BONDS" herein. BOOK-ENTRY ONLY SYSTEM The Series 2014B Bonds originally will be issued solely in book-entry form to DTC or its nominee, Cede & Co., to be held in DTC's book-entry only system. So long as such Series 2014B Bonds are held in the book-entry only system, OTC or its nominee will be the Registered Owner or Holder of such Series 2014B Bonds for all purposes of the Indenture, the Series 2014B Bonds and this Official Statement. For a description of the book-entry only system, see "APPENDIX E - PROVISIONS REGARDING BOOK-ENTRY ONLY SYSTEM." The City may decide to discontinue use of the system of book-entry transfers through OTC (or a successor securities depository). In that event, the Series 2014B Bonds will be printed and delivered and will be governed by the provisions of the Indenture with respect to payment of Principal and interest and rights of exchange and transfer. The City cannot and does not give any assurances that OTC participants or others will distribute payments with respect to the Series 2014B Bonds received by OTC or its nominee as the Registered Owner, or any prepayment or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or that OTC will service and act in the manner described in this Official Statement. For a description of the book-entry only system, see "APPENDIX E- PROVISIONS REGARDING BOOK-ENTRY ONLY SYSTEM." PAYMENT OF PRINCIPAL AND INTEREST The Principal of, premium, if any, and interest on, the Series 2014B Bonds is payable in lawful money of the United States of America. In the event that the book-entry only system has been terminated, Principal of and Redemption Price on the Series 2014B Bonds when due will be payable at the principal corporate trust operations office of the Trustee, or of its successor as Paying Agent for the Series 2014B Bonds. In the event that the book-entry only system has been terminated, payment of interest on the Series 2014B Bonds will be paid by check or draft mailed on an Interest Payment Date to the Registered Owner of record as of the close of business on the Record Date at such Owner's address as it appears on the registration books of the Trustee or at such other address as is furnished in writing by such Registered Owner to the Trustee prior to the Record Date. REDEMPTION PROVISIONS Optional Redemption. The Series 2014B Bonds maturing on or after October 1, 20_, are subject to redemption at the election of the City on any date on or after October 1, 20_, in - 8 - whole or in part (if in part, such Series 2014B Bonds to be redeemed will be selected from such maturities as are determined by the City in its discretion and within each maturity as selected by the Trustee), upon notice as provided below. Such optional redemption of the Series 2014B Bonds will be at the Redemption Price equal to the Principal amount thereof, but without premium, plus accrued interest thereon to the redemption date. Partial Redemption. Upon surrender of a Series 2014B Bond redeemed in part, the City will execute and the Trustee (or any Transfer Agent) will authenticate and deliver to the Holder thereof a new Series 2014B Bond or Series 2014B Bonds in the denomination of $5,000 and any whole multiple thereof equal in Principal amount to the unredeemed portion of the Series 2014B Bond surrendered. So long as the Series 2014B Bonds are held in the book-entry only system, Series 2014B Bonds will not be delivered as set forth above; rather transfers of beneficial ownership of the Series 2014B Bonds to the person indicated will be effected on the registration books of DTC pursuant to its rules and procedures. See "APPENDIX E - PROVISIONS REGARDING BOOK-ENTRY ONLY SYSTEM." NOTICE OF REDEMPTION At least 30 but not more than 60 days prior to each redemption date, the Trustee will mail notice of redemption by first-class mail to each Bondholder at the Holder's registered address. Unless moneys sufficient to pay the Principal of, and interest on the Series 2014B Bonds to be redeemed have been received by the Trustee prior to the giving of such notice of redemption, such notice may state that said redemption will be conditioned upon the receipt of such moneys by the Trustee on or prior to the date fixed for redemption. If such moneys are not received, such notice will be of no force and effect, the City will not redeem such Series 2014B Bonds and the Trustee will give notice, in the same manner in which the notice of redemption was given, that such moneys were not so received and that such Series 2014B Bonds will not be redeemed. Neither failure to give any required notice of redemption as to any particular Series 2014B Bonds nor any defect in any notice so mailed will affect the validity of the call for redemption of any Series 2014B Bonds. Any notice mailed as provided in this paragraph will be conclusively presumed to have been given whether or not actually received by the addressee. Except as otherwise described in the preceding paragraph with respect to a conditional notice of redemption, when notice of redemption is required and given, Series 2014B Bonds called for redemption become due and payable on the redemption date at the applicable redemption price, and in such case when funds are deposited with the Trustee sufficient for redemption, interest on the Series 2014B Bonds to be redeemed ceases to accrue as of the date of redemption. REGISTRATION, TRANSFER AND EXCHANGE In the event the book-entry system is discontinued, any Series 2014B Bond may, in accordance with its terms, be transferred, upon the registration books kept by the Trustee, by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond for cancellation, or, if applicable, notation of the new Holder together with the signature of the Trustee or any applicable Transfer Agent on the back of such Bond, or - 9 - on a form of record attached to such Series 2014B Bond for such purpose, accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Trustee. No transfer will be effective until entered on the registration books kept by the Trustee. For every such exchange or transfer of the Series 2014B Bonds, the Trustee or the Transfer Agent will require the payment by the Bondholder requesting such exchange or transfer of any tax or other governmental charge required to be paid with respect to such exchange or transfer of the Bonds. The City, the Trustee and any Transfer Agent are not required (a) to issue, register the transfer of or exchange any Series 2014B Bond during a period beginning at the opening of business 15 days before the date of mailing of a notice of redemption of the Series 2014B Bonds selected for redemption and ending on the close of business on the day of such mailing, or (b) to register the transfer of or exchange of any Series 2014B Bond so selected for redemption in whole or in part, except the unredeemed portion of the Series 2014B Bonds being redeemed in part. The City, the Trustee and the Transfer Agent may treat and consider the person in whose name each Series 2014B Bond is registered in the registration books kept by the Trustee as the Holder and absolute owner of such Series 2014B Bond for the purpose of payment of Principal of and interest on such Series 2014B Bond and for all other purposes whatsoever. SECURITY FOR THE SERIES 2014B BONDS PLEDGED EXCISE TAXES The Series 2014B Bonds will be special limited obligations of the City, payable solely from and secured solely by a pledge of the Revenues, or the Pledged Excises Taxes, which consist of the Local Sales Taxes, the Municipal Energy Taxes, the Telecommunications Taxes, the Energy Franchise Fees, the Public Utilities Franchise Fees and the Cable Franchise Fees, each of which is described in more detail below. Local Sales Taxes. The Local Sales and Use Tax Act, Title 59, Chapter 12, Part 2, Utah Code (the "Local Sales and Use Tax Act"), provides that each county, city and town in the State may levy a local sales and use tax of up to 1.00% on the purchase price of taxable goods and services. The legislative intent contained in the Local Sales and Use Tax Act is to provide an additional source of revenues to counties and municipalities that is to be used to finance their capital outlay requirements and to service their bonded indebtedness. The City has levied the Local Sales Taxes at the maximum legal rate of 1.00%. Sales tax is imposed on the amount paid or charged for sales of tangible personal property in the State and for services rendered in the State for the repair, renovation or installation of tangible personal property. Use tax is imposed on the amount paid or charged for the use, storage or other consumption of tangible personal property in the State, including services for the repair, renovation or installation of such tangible personal property. Sales and - 10 - use taxes also apply to leases and rentals of tangible personal property if the tangible personal property is in the State, the lessee takes possession in the State or the tangible personal property is stored, used or otherwise consumed in the State. In addition to the Local Sales Taxes levied by the City, the State levies a statewide sales and use tax (the "Statewide Tax") which is currently imposed at a rate of 4.70% of the purchase price of taxable goods and services, excluding unprepared food and food ingredients. Sales of unprepared food and food ingredients are taxed at a rate of 1.75%. The State also levies a 2.00% tax on sales of natural gas, electricity and fuel oil for residential use. The Statewide Tax is not pledged to payment of the Series 2014B Bonds and is paid to the State. In addition to the sales and use taxes described above, counties and cities in the State are authorized to impose certain additional sales and use taxes for various purposes as authorized by State law. The maximum sales and use tax levied on taxable goods and services within the City's boundaries by the State, Salt Lake County and the City is 6.85% and is comprised of certain of the various sales taxes mentioned in the preceding sentence, the Statewide Tax and the Local Sales Taxes. However, only 1.00% of the revenues derived from the collection of these sales and use taxes makes up the Local Sales Taxes pledged to the payment of the debt service on the Series 2014B Bonds. Local sales and use taxes, including the Local Sales Taxes, are collected by the Tax Commission and distributed on a monthly basis to each county, city and town. The distributions to the City are based on a formula, which provides that (a) 50% of each dollar of sales tax collections will be distributed on the basis of the population of the local government and (b) 50% of each dollar of sales tax collections will be distributed on the basis of the point of sale. For the fiscal year ended June 30, 2013, the City budgeted Local Sales Tax revenues of $46,495,055 and the City actually received revenues of $47,691,666. The City budgeted Local Sales Tax revenues of $48,638,055 for the fiscal year ending June 30, 2014; the City is currently projecting Local Sales Tax revenues of approximately $49,253,745 for the fiscal year ending June 30, 2014. The City is not legally allowed to provide actual dollar figures of sales and use tax collections by specific businesses. However, during the fiscal year ended June 30, 2013, of the top 50 businesses, only eight of such businesses generated at least 1.0% of the total Local Sales Taxes collected in the City. Together, these eight businesses generated 14 .68 % of the Local Sales Tax revenues generated in the City. No single business accounted for more than 3.04% of the City's total Local Sales Tax revenues. Municipal Energy Taxes and Energy Franchise Fees. Prior to July 1, 1998, municipalities were granted the authority to charge public utilities a franchise tax of up to 6% of gross revenue from the sale of taxable property or service, including providers of energy. In 1997, the Municipal Energy Sales and Use Tax Act, Title 10, Chapter 1, Part 3, Utah Code (the "Municipal Energy Tax Act") was passed. The Municipal Energy Tax Act prohibited the collection of a franchise tax on suppliers of energy and authorized cities or towns to levy a municipal sales and use tax of up to 6% of the sale or use of taxable energy. The municipal - 11 - energy sales and use tax is levied on the value of the sale or use of gas and electricity (including the value of the energy and the costs typically incurred in providing such energy in usable form to the customer). Certain limited transactions are exempted from the tax. The Municipal Energy Tax Act stipulates that municipalities with franchise fee agreements that were in effect prior to July 1, 1997, may continue to collect revenues under such agreements for the remaining term of such agreements. By City ordinance, there is credited against an entity's Municipal Energy Tax liability an amount equal to any franchise fees collect by the City from such entity. The City has a franchise agreement with the major public electric utility servicing the residents of the City (the "Electric Franchise Agreement") that implements a 6% franchise fee on the gross revenues of such utility, which is the maximum permitted amount. The Electric Franchise Agreement expires in 2016, after which time a Municipal Energy Tax of 6% will automatically be levied on the sale or use of the electricity provided by the public electric utility. The City also had a franchise agreement with the major public natural gas utility servicing the residents of the City (the "Gas Franchise Agreement") that implemented a 2% franchise fee on the gross revenues of such utility and served as a credit against the 6% Municipal Energy Tax. The Gas Franchise Agreement expired in 2003 and all collections are now the 6% Municipal Energy Tax. The sale or use of taxable energy within the City provided by several other smaller suppliers of energy are being taxed at the maximum rate of 6% under the Municipal Energy Tax Act. Municipal energy sales and use taxes, including the Municipal Energy Taxes, are collected by the Tax Commission and transferred (less certain administrative fees) monthly to each city or town based on the point of sale or the point of use. Under certain circumstances, municipal energy sales and use taxes may be collected by the energy supplier and distributed directly to the applicable city or town. Under the applicable franchise agreement, Energy Franchise Fees are collected by the applicable energy provider and distributed to the City each month. For the fiscal year ended June 30, 2013, the City budgeted Municipal Energy Tax revenues of $6,382,000 and Energy Franchise Fee revenues of $15,120,000 and the City actually received $6,127,042 and $16,368,000, respectively, of such revenues. The City budgeted Municipal Energy Tax revenues of $6,382,000 and Energy Franchise Fee revenues of $15,120,000 for the fiscal year ending June 30, 2014; the City is currently projecting Municipal Energy Tax revenues of approximately $6,501,118 and Energy Franchise Fee revenues of approximately $15,500,000 for the fiscal year ending June 30, 2014. Telecommunications Taxes. The Municipal Telecommunications License Tax Act, Title 10, Chapter 1, Part 4, Utah Code (the "Municipal Telecommunications Tax Act"), provides that a city or town may levy on and provide that there is collected from a telecommunications provider a municipal telecommunications license tax on the telecommunications provider's gross receipts that are attributed to such city or town. The gross receipts from a telecommunication service are attributable to a municipality if the gross receipts are for telecommunication service that is - 12 - located within the municipality. The City collects the Telecommunications Taxes at the maximum legal rate of 3 .50%. Telecommunication license taxes, including the Telecommunication Taxes, are collected by the Tax Commission and transferred (less certain administrative fees) monthly to each city or town. For the fiscal year ended June 30, 2013, the City budgeted Telecommunications Tax revenues of $6,200,000 and the City actually received $5,715,596 of such revenues. The City budgeted Telecommunications Tax revenues of $6,200,000 for the fiscal year ending June 30, 2014; the City is currently projecting Telecommunications Tax revenues of approximately $6,200,000 for the fiscal year ending June 30, 2014. Public Utilities Franchise Fees. The City requires the Public Utilities Department of the City to pay the City a franchise fee equal to 6% of the gross revenues received by the department from the operation of the public utility. The purpose of the Public Utilities Franchise Fee is to fairly and equally charge for the department's use of the City's streets. The Public Utilities Department collects the Public Utilities Franchise Fee in its billing for water, sewer and stormwater services rendered within City limits. The Public Utilities Franchise Fees collected by the Public Utilities Department are paid to the City's general fund within 45 days after the close of each month. For the fiscal year ended June 30, 2013, the City budgeted Public Utilities Franchise Fee revenues of $3,601,800 and the City actually received $3,957,310 of such revenues. The City budgeted Public Utilities Franchise Fee revenues of $4,200,000 for the fiscal year ending June 30, 2014; the City is currently projecting Public Utilities Franchise Fee revenues of approximately $4,200,000 for the fiscal year ending June 30, 2014. Cable Franchise Fees. The City requires that grantees of a cable franchise within the City pay a franchise fee equal to 5% of the gross revenues received from the operation of the cable system. Cable Franchise Fees are calculated on a quarterly basis and are due and payable 90 days after the close of the quarter. Any Cable Franchise Fees that have not been paid when due shall bear interest at a rate of 18% per year until paid. The City may request an audit of a grantee's full billing records. For the fiscal year ended June 30, 2013, the City budgeted Cable Franchise Fee revenues of $1,300,000 and the City actually received $1,465,596 of such revenues. The City budgeted Cable Franchise Fee revenues of $1,300,000 for the fiscal year ending June 30, 2014; the City is currently projecting Cable Franchise Fee revenues of approximately $1,300,000 for the fiscal year ending June 30, 2014. Pledged Sales and Use Taxes. A sales and use tax, including the Pledged Sales and Use Taxes, due and unpaid constitutes a debt due from the vendor and may be collected, together with interest, penalty, and costs, by appropriate judicial proceeding within three years after the vendor is delinquent. Furthermore, if a sales and use tax is not paid when due and if the vendor has not followed the procedures to object to a notice of deficiency, the Tax Commission may - 13 - issue a warrant directed to the sheriff of any county commanding him to levy upon and sell the real and personal property of a delinquent taxpayer found within such county for the payment of the tax due. The amount of the warrant shall have the force and effect of an execution against all personal property of the delinquent taxpayer and shall become a lien upon the real property of the delinquent taxpayer in the same manner as a judgment duly rendered by any district court. HISTORICAL PLEDGED EXCISE TAXES The following table shows the amounts of the various taxes and fees comprising the Pledged Excise Taxes received by the City for the fiscal year indicated. FOR FISCAL YEARS ENDING, 2009 2010 2011 2012 2013 Local Sales Taxes $41,533,420 $39,738,331 $41,644,390 $45,586,564 $4 7 ,691,666 Municipal Energy Taxes 5,770,481 4,350,985 4,774,058 4,049,019 6,127,042 Energy Franchise Fees 14,992,465 15,502,477 16,025,368 16,779,541 16,368,000 Telecommunications Taxes 6,404,629 6,335,642 5,742,342 6,140,356 5,930,377 Public Utilities Franchise Fees 3,535,350 3,102,904 3,343,866 3,905,533 3,957,310 Cable Franchise Fees 1,266,814 1,297,077 1,337,085 1,356,549 1,465,596 Total Pledged Excise Taxes $73,503,159 $70,327,416 $72,867,109 $77,817,562 $81,539,991 Percentage Change from Prior Year n/a (4.32)% 3.61% 6.79% 4.78% Note: Prior to 2012, the Pledged Excises Taxes consisted of only the Local Sales Taxes; however, for comparison, the table above shows a five year history for all taxes and fees that are currently pledged under the Indenture even though the majority of the taxes and fees were not pledged prior to 20 12. (Source: The City.) STATE PLEDGE OF NONIMPAIRMENT In accordance with Section 11-14-307, Utah Code, the State pledges and agrees with the Holders of the Series 2014B Bonds that it will not alter, impair or limit the Pledged Excise Taxes in a manner that reduces the amounts to be rebated to the City which are devoted or pledged for the payment of the Series 2014B Bonds until the Series 2014B Bonds, together with applicable interest, are fully met and discharged; provided, however, that nothing shall preclude such alteration, impairment or limitation if and when adequate provision shall be made by law for the protection of the Holders of the Series 2014 B Bonds. The City notes that this provision has not been interpreted by a court of law and, therefore, the City cannot predict the extent that such provision would (a) be upheld under constitutional or other legal challenge, (b) protect the current rates and collection of all Pledged Excise Taxes, or (c) impact any other aspect of Pledged Excise Taxes. - 14 - FLOW OF FUNDS To secure the timely payment of the Principal of and interest on the Bonds, the City has pledged and assigned to the Trustee the Revenues and all moneys in the funds and accounts (except the Rebate Fund, if any) established by the Indenture. The Indenture establishes a Principal and Interest Fund, to be held by the Trustee and a Revenue Fund to be held by the City and certain other funds and accounts. In general, the Indenture requires that all Revenues be deposited into the Revenue Fund and that the City transfer, on or before the last Business Day of each month, from the Revenue Fund (a) first, the amount, if any, required so that the balance in each of the Series Subaccounts in the Bond Service Account equals the Accrued Debt Service on the related Series of Bonds and (b) second, the amount, if any, required to be deposited into the Series Subaccounts in the Debt Service Reserve Account. Following such deposits, the City is to retain in the Revenue Fund the amount estimated to be required for deposits described in (a) and (b) above in the next succeeding month. Any remaining Revenues may be used by the City, free and clear of the lien of the Indenture. For a more detailed description of application of Revenues under the Indenture see "APPENDIX B - MASTER TRUST INDENTURE - Section 5.05. Revenues; Revenue Fund" and" - Section 5 .06. Flow of Funds." No DEBT SERVICE RESERVE General. The Indenture requires the establishment of a separate Series Subaccount in the Debt Service Reserve Account for each Series of Bonds, including the Series 2014B Bonds. The Supplemental Indenture relating to each Series of Bonds is required to specify the Debt Service Reserve Requirement for the applicable Series of Bonds that is to be on deposit in the related Series Subaccount. Each Series Subaccount in the Debt Service Reserve Account secures only the related Series of Bonds. For more information regarding the Debt Service Reserve Account see "APPENDIX B - MASTER TRUST INDENTURE - Section 5.08. Principal and Interest Fund - Debt Service Reserve Account." Series 2014B Bonds. Although the Tenth Supplemental Trust Indenture creates a Series 2014B Debt Service Reserve Subaccount, the Series 2014B Debt Service Reserve Requirement is equal to $-0- and no amounts will be on deposit in the Series 2014B Debt Service Reserve Subaccount as a reserve for the Series 2014B Bonds. Contingent Reserves for Certain of the Outstanding Parity Bonds. The Series 2004 Bonds, the Series 2005A Bonds, the Series 2007A Bonds and the Series 2009A Bond (the "Pre- 2012 Bonds") are secured by separate contingent reserves. So long as any Pre-2012 Bonds are Outstanding, the City is required to deliver to the Trustee an independent accountant's certificate within six months after the close of each fiscal year, certifying as to whether the Revenues for the preceding fiscal year were equal to at least 150% of the Maximum Annual Debt Service on all Bonds then outstanding under the Indenture (the "Coverage Certificate"). In the event that the Coverage Certificate indicates that Revenues did not meet such coverage requirement, the Debt Service Reserve Requirement for each Series of the Pre-2012 Bonds immediately increases to the lesser of (a) the Maximum Annual Debt Service on the applicable Series of the Pre-2012 - 15 - Bonds, (b) 125% of Average Aggregate Debt Service on the applicable Series of the Pre-2012 Bonds, and (c) 10% of the original Principal amount of the applicable Series of the Pre-2012 Bonds. On or before the last Business Day preceding the end of the calendar month following delivery of the Coverage Certificate showing that the coverage requirement described above was not met, the City is required to commence a schedule of transfers into each of the applicable Series Subaccounts in the Debt Service Reserve Account, either from Revenues, subject to the provisions of the Indenture, or from other legally available moneys, sufficient to cause the related Debt Service Reserve Requirement to be on deposit therein within 24 months. If, after the end of any succeeding fiscal year, the Coverage Certificate indicates that the Revenues were equal to at least 200% of the Maximum Annual Debt Service on all Bonds outstanding under the Indenture for such fiscal year, each Debt Service Reserve Requirement for the Pre-2012 Bonds shall immediately be reduced to zero and the Trustee will pay over to the City all amounts then on deposit in the applicable Series Subaccounts in the Debt Service Reserve Account, free and clear of the lien of the Indenture. The deposit, if any, described above would not secure the Series 2014B Bonds. OUTSTANDING PARITY BONDS When the Series 2014B Bonds are issued, the Outstanding Parity Bonds will also be outstanding under the Master Indenture in the aggregate principal amount of $. . The Series 2014B Bonds, the Outstanding Parity Bonds and any Additional Bonds are equally and ratably secured under the terms of the Master Indenture. ADDITIONAL BONDS Whenever the City determines to issue any Additional Bonds under the Indenture, the following requirements must be met: (a) The City must execute and deliver to the Trustee (among other things) the following documents: (i) a Written Certificate of the City setting forth the Principal amount of the Additional Bonds, the Debt Service for each Fiscal Year of such Additional Bonds and the Aggregate Debt Service for all Outstanding Bonds, including the Additional Bonds being issued; and (ii) a Written Certificate of the City demonstrating (A) in the case of Additional Bonds issued to finance a Project, that the Revenues for any Year within the 24 calendar months next preceding the authentication and delivery of the Additional Bonds proposed to be issued are equal to or greater than 200% of the Maximum Annual Debt Service on all Outstanding Bonds upon the issuance of the Additional Bonds proposed to be issued; or (B) in the case of Additional - 16 - ... Bonds issued to refund Bonds issued under the Indenture, either (I) that the Aggregate Debt Service on the Additional Bonds being issued to refund prior Bonds is no greater than 100% of the Aggregate Debt Service on the Bonds being refunded for each Fiscal Year to and including the schedule of final maturity of the Bonds being refunded, or (II) that the Revenues are equal to or greater than 200% of the Maximum Annual Debt Service on all Bonds Outstanding upon the issuance of the refunding Bonds; and (b) The proceeds of Additional Bonds issued under the Indenture must be used to (i) refund Bonds issued under the Indenture or other obligations of the City or its Local Building Authority (including the funding of necessary reserves and the payment of costs of issuance) and/or (ii) to finance or refinance a Project. The City may, in determining the Maximum Annual Debt Service on all Outstanding Bonds and in accordance with the terms of the Indenture, reduce the Debt Service on any Series of Bonds for any Fiscal Year by ( 1) the amount of capitalized interest available to pay interest on such Bonds in such Fiscal Year and (2) the Special Revenues (defined below) pledged to pay such Debt Service in an amount equal to either (x) the average of the Special Revenues received by the City for the past three Fiscal Years or (y) 75% of the Special Revenues received by the City for the immediately preceding Fiscal Year, each as reflected in the applicable audited financial statements of the City filed with the Trustee; provided however, the Special Revenues applied in either (x) or (y) above to reduce the Debt Service on a Series of Bonds for a particular Fiscal Year are not to exceed the Debt Service on such Series of Bonds for said Fiscal Year. "Special Revenues," as defined in the Master Indenture, means any legally available moneys or income from an enterprise of the City or any other source available to the City that are pledged to the payment of one or more series of the Bonds as provided in a supplemental indenture. If Special Revenues are to be used in connection with the determination of Maximum Annual Debt Service, then the City is to deliver to the Trustee (a) confirmation from each Rating Agency then maintaining a rating on any Outstanding Bonds that the pledge of Special Revenues will not result in the reduction or withdrawal of any rating on any Outstanding Bonds and (b) an Opinion of Bond Counsel of nationally recognized standing in the field of law relating to municipal bonds to the effect that such pledge of Special Revenues will not adversely affect the tax-exempt status of any Bonds then Outstanding. (The remainder of this page intentionally left blank.) - 17 - D E B T S E R V IC E S C H E D U L E O N T H E S E RIE S 2 0 1 4 B B O N D S A N D T HE O U T S T A N DI N G P A R IT Y B O N D S The following table sets forth the debt service requirements on the Series 2014B Bonds and the Outstanding Parity Bonds: FISCAL YEARS ENDING JUNE30 SERIES 2014B BONDS PRINCIPAL* $ TOTAL<3l INTEREST $ $=== $.==== OUTSTANDING PARITY BONDS(l)(2) $ TOTAL DEBT SERVICE $ $.=== $.=== * Preliminary; subject to change. (1) While not obligated to make principal payments on the Series 2004 Bonds prior to their final maturity on June 1, 2015, the column reflects the City's anticipated amortization schedule for the Series 2004 Bonds. (2) For the Series 2004 Bonds, assumes an interest rate equal to 3.0% per annum. From the time the Series 2004 Bonds were issued through , 2014, the average interest rate has been __ % per annum. (3) Totals may not add due rounding. Based on the average amount of the Pledged Excise Taxes actually received by the City over the past 5 fiscal years ($. ), and the anticipated maximum total debt service - 18 - shown above ($ ), the average amount of the Pledged Excise Taxes received by the City are 5.67 times the maximum total debt service. See "SECURITY FOR THE SERIES 2014B BONDS - Pledged Excise Taxes" herein. RISK FACTORS The purchase of the Series 2014B Bonds involves certain investment risks. Accordingly, each prospective purchaser of the Series 2014B Bonds should make an independent evaluation of all of the information presented in this Official Statement in order to make an informed investment decision. Certain of these risks are described below; however, it is not intended to be a complete representation of all the possible risks involved. UNCERTAINTY OF REVENUES The amount of Pledged Excise Taxes to be collected by the City is dependent on a number of factors beyond the control of either the City or the State, including, but not limited to, current economic conditions and weather patterns. Any one or more of these factors could result in the City receiving less Pledged Excise Tax revenues than anticipated. For example, during periods in which economic activity declines, Local Sales Taxes are likely to decline as compared to an earlier year. In addition, Pledged Excise Taxes are dependent on the volume of the transactions subject to the tax. From time to time, proposals have been made by the Utah State Legislature to remove certain types of purchases from the sales and use taxes or to change the method of distributing the sales and use taxes. See "SECURITY FOR THE SERIES 2014B BONDS - State Pledge of Nonimpairment" above. In addition, the State (like many other states) has recognized the potential reduction in sales tax revenues as a result of purchases made through the internet and other non-traditional means. The City cannot predict what impact these items may have on the Pledged Excise Taxes it receives. THE SERIES 2014B BONDS ARE LIMITED OBLIGATIONS The Series 2014B Bonds are special limited obligations of the City, payable solely from the Revenues, moneys, securities and funds pledged therefor in the Indenture. The Series 2014B Bonds do not constitute general obligation indebtedness or a pledge of the ad valorem taxing power or the full faith and credit of the City, and are not obligations of the State or any other agency or other political subdivision or entity of the State. The City will not mortgage or grant any security interest in the improvements financed with the proceeds of the Series 2014B Bonds or any portion thereof to secure payment of the Series 2014B Bonds. LIMITATION ON INCREASING RATES FOR PLEDGED EXCISE TAXES The City currently either levies the maximum tax rate (taking into account any credit for franchise fees) allowed under State law for all component taxes making up the Pledged Excise Taxes or is limited by contract and by State law in its ability to increase franchise fees. No assurance can be given that the Pledged Excise Taxes will remain sufficient for the payment of - 19 - the Principal or interest on the Series 2014B Bonds and the City is limited by State law in its ability to increase the rate of such Pledged Excise Taxes. POSSIBLE USE OF SPECIAL REVENUES TO MEET ADDITIONAL BONDS TEST; RELIANCE ON RATING AGENCIES In determining the Maximum Annual Debt Service for purposes of meeting the coverage requirements under the Indenture in order to issue Additional Bonds, the City, at its option, may apply Special Revenues up to a certain amount as an assumed reduction in Debt Service on an Outstanding Series of Bonds. See "THE SERIES 2014B BONDS - Additional Bonds" herein. As a condition (among others) to including Special Revenues for this purpose, each Rating Agency then maintaining a rating on any Outstanding Bonds must confirm the rating on the Outstanding Bonds. Owners of the Series 2014B Bonds will be relying on Rating Agencies' approval with respect to the inclusion by the City of Special Revenues in the determination of Maximum Annual Debt Service with respect to any future Additional Bonds, if such Special Revenues are pledged to such Bonds. Additionally, the inclusion of Special Revenues could potentially dilute the coverage ratio of Pledged Revenues to Maximum Annual Debt Service. The City currently has no plans to apply Special Revenues for a Series of Bonds. THE CITY CITY OFFICIALS The City has a Council-Mayor form of government. The City Council consists of seven members, who are elected by voters within seven geographic districts of approximately equal population. The Mayor is elected at large by the voters of the City and is charged with the executive and administrative duties of the government. The seven-member, part-time City Council is charged with the responsibility of performing the legislative functions of the City. The City Council performs three primary functions: it passes laws for the City, adopts the City budget and provides administrative oversight by conducting management and operational audits of City departments. Term information concerning the Mayor and the members of the City Council is set forth below: - 20 - YEARS IN EXPIRATION OF OFFICE DISTRICT PERSON SERVICE CURRENT TERM Mayor Ralph Becker 6 January 2016 Council Chair #6 Charlie Luke 2 January 2016 Council Vice Chair #4 Luke Garrott 6 January 2016 Council Member #7 Lisa Ramsey Adams January 2018 Council Member #2 Kyle LaMalfa 2 January 2016 Council Member #5 Erin J. Robinson Mendenhall January 2018 Council Member #3 Stan Penfold 4 January 2018 Council Member #1 James Rogers January 2018 CITY ADMINISTRATION The offices of Chief of Staff, City Attorney, City Recorder and City Treasurer are appointive offices. David Everitt, Chief of Staff, was appointed to his position by Mayor Becker on January 7, 2008. He is an experienced educator and program manager. David Everitt received his B.S. degree in Geology from the University of Washington and his Master's degree in Environment and Community from Antioch Seattle University. He co-founded an environmental consulting business ten years ago and has worked throughout the country for the last twelve years as an environmental educator and program supervisor. Margaret D. Plane, City Attorney, was appointed to her position by Mayor Becker on June 28, 2013. Ms. Plane received her Juris Doctorate degree from the University of Utah in 2002, her Master of Arts degree in Philosophy from the University of Utah, and her Bachelor of Arts degree from Rollins College. Before being appointed as City Attorney, Ms. Plane worked in the City Attorney's office as a litigator and as chief counsel for the Department of Human Resources. Prior to working for the City, she was legal director of the American Civil Liberties Union of Utah and was a judicial clerk for the Honorable Pamela T. Greenwood on the Utah Court of Appeals. Cindi Mansell, City Recorder, was appointed by Mayor Becker on July 31, 2012. Prior to employment with Salt Lake City, Ms. Mansell worked for various city governments (including Ogden City and Riverdale City) for a total of 24 years. Through the International Institute of Municipal Clerks and in conjunction with the University of Utah, Ms. Mansell completed the Master Municipal Clerk Certificate in 2004. In 2005, she received the Certified Records Manager designation for professional record managers. Marina Scott, City Treasurer, was appointed to her position by Mayor Becker on June 4, 2013. From December 2006 until her appointment, Mrs. Scott was Deputy Treasurer for the City; and from September 2005 until December 2006 she served as an Accountant III for the Public Services Department. Mrs. Scott holds a Bachelor of Science degree in Accounting, and a - 21 - #''!Ii",.,: Master of Professional Accountancy from Weber State University. She also holds a Master of Arts in Library and Information Science from Vilnius State University. CITY FUND STRUCTURE; ACCOUNTING BASIS The accounts of the City are organized on the basis of funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance or net assets, revenues, and expenditures or expenses. The various funds are grouped by type in the basic financial statements. Revenues and expenditures are recognized using the modified accrual basis of accounting in all governmental funds. Revenues are recognized in the accounting period in which they become both measurable and available. "Measurable" means that amounts can be reasonably determined within the current period. "Available" means that amounts are collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City uses 60 days as a cutoff for meeting the available criterion. Property taxes are considered "measurable" when levied and available when collected and held by Salt Lake County. Any amounts not available are recorded as delayed revenue. Franchise taxes are considered "measurable" when collected and held by the utility company, and are recognized as revenue at that time. Other revenues that are determined to be susceptible to accrual include grants-in-aid earned and other intergovernmental revenues, charges for services, interest, assessments, interfund service charges, and proceeds of the sale of property. Property taxes and assessments are recorded as receivables when assessed; however, they are reported as delayed revenue until the "available" criterion has been met. Sales and use taxes collected by the state and remitted to the City within the "available" time period are recognized as revenue. Revenues collected in advance are delayed and recognized in the period to which they apply. In proprietary funds, revenues and expenses are recognized using the accrual basis of accounting. Revenues are recognized in the accounting period in which they are earned and become measurable, and expenses are recognized in the period incurred. FINANCIAL CONTROLS The City utilizes a computerized financial accounting system which includes a system of budgetary controls. State law requires budgets to be controlled by individual departments, but the City also maintains computerized control by major categories within departments. These computerized controls are such that a requisition cannot be entered into the purchasing system unless the appropriated funds are available. The system checks for sufficient funds again, prior to the purchase order being issued, and again before the payment check is issued. Voucher payments are also controlled by the computer for sufficient appropriations. - 22 - B U D G E T A N D A P P R O P RI A TI O N P R O C E S S The budget and appropriation process of the City is governed by the Uniform Fiscal Procedures Act for Utah Cities, Title 10, Chapter 6 of the Utah Code (the "Fiscal Procedures Act"). Pursuant to the Fiscal Procedures Act, the budget officer of the City is required to prepare budgets for the General Fund, Special Revenue Funds, Debt Service Funds and Capital Improvement Fund. These budgets are to provide a complete financial plan for the budget (ensuing fiscal) year. Each budget is required to specify, in tabular form, estimates of anticipated revenues and appropriations for expenditures. Under the Fiscal Procedures Act, the total of anticipated revenues must equal the total of appropriated expenditures. On or before the first regular meeting of the City Council in May of each year, the budget officer is required to submit to the City Council tentative budgets for all funds for the Fiscal Year commencing July 1. Various actual and estimated budget data are required to be set forth in the tentative budgets. The budget officer may revise the budget request submitted by the heads of City departments, but must file these submissions with the City Council together with the tentative budget. The budget officer is required to estimate in the tentative budget the revenue from nonproperty tax sources available for each fund and the revenue from general property taxes required by each fun d. The tentative budget is then provisionally adopted by the City Council, with any amendments or revisions that the City Council deems advisable prior to the public hearings on the tentative budget. After public notice and hearing, the tentative budget is adopted by the City Council, subject to further amendment or revisions by the City Council prior to adoption of the final budget. Prior to June 22nd of each year, the final budgets for all funds are adopted by the City Council. The Fiscal Procedures Act prohibits the City Council from making any appropriation in the final budget of any fund in excess of the estimated expendable revenue of such fund. The adopted final budget is subject to amendment by the City Council during the fiscal year. However, in order to increase the budget total of any fund, public notice and hearing must be provided. Intra- and inter-department transfers of appropriation balances are permitted upon compliance with the Fiscal Procedures Act. The amount set forth in the final budget as the total amount of estimated revenue from property taxes constitutes the basis for determining the property tax levy to be set by the City Council for the succeeding tax year. INVESTMENT POLICY City Policy. It is the policy of the City to invest public funds in accordance with the principles of sound treasury management and in compliance with State and local laws, regulations, and other policies governing the investment of public funds, specifically, according to the terms and conditions of the State Money Management Act of 1974 and Rules of the State Money Management Council as currently amended (the "Money Management Act"), and the City's own written investment policy. The following investment objectives, in order of priority, are met when investing public funds: safety of principal, need for liquidity, and maximum yield on investments consistent with the first two objectives. - 23 - The City may use investment advisers to conduct investment transactions on its behalf as permitted by the Money Management Act and local ordinance or policy. Investment advisers must be certified by the Director of the Utah State Division of Securities of the Department of Commerce (the "Director"). Broker/dealers and agents who desire to become certified dealers must be certified by the Director and meet the requirements of the Money Management Act. Only qualified depositories as certified by Utah's Commissioner of Financial Institutions are eligible to receive and hold deposits of public funds. The State Money Management Council issues a quarterly list of certified investment advisers, certified dealers, and qualified depositories authorized by State statute to conduct transactions with public treasurers. Transactions involving authorized deposits or investments of public funds may be conducted only through issuers of securities authorized by Section 51-7-11(3) of the Utah Code, qualified depositories included in the current State list, and certified dealers included in the current State list. The City Treasurer must take delivery of all investments purchased, including those purchased through a certified investment adviser. This may be accomplished by the City Treasurer taking physical delivery of the security or delivering the security to a bank or trust company designated by the City Treasurer for safekeeping. The City Treasurer may use a qualified depository bank for safekeeping securities or maintain an account with a money center bank for the purpose of settling investment transactions and safekeeping and collecting those investments. City policy provides that not more than 25% of total City funds or 25% of the qualified depository's allotment, whichever is less, can be invested in any one qualified depository. Not more than 20% of total City funds may be invested in any one certified out-of-state depository institution. However, there is no limitation placed on the amount invested with the Utah Public Treasurer's Investment Fund ("PTIF") and other money market mutual funds, provided that the overall standards of investments achieve the City's policy objectives. All funds pledged or otherwise dedicated to the payment of interest on and principal of bonds or notes issued by the City are invested in accordance with the terms and borrowing instruments applicable to such bonds or notes. City policy also provides that the remaining term to maturity of an investment may not exceed the period of availability of the funds invested. The investment of City funds cannot be of a speculative nature. The City's entire portfolio is currently in compliance with all of the provisions of the Money Management Act. The Utah Public Treasurers' Investment Fund. The PTIF is a local government investment fund, established in 1981, and managed by the State Treasurer. Currently, the City has approximately $820 million on deposit in the PTIF, representing a substantial portion of the City's funds. All investments in the PTIF must comply with the Money Management Act and rules of the State Money Management Council. The PTIF invests primarily in money market securities. Securities in the PTIF include certificates of deposit, commercial paper, short-term corporate notes, obligations of the U.S. Treasury and securities of certain agencies of the federal government. By policy, the maximum weighted average adjusted life of the portfolio is not to exceed 90 days and the maximum final maturity of any security purchased by the PTIF is limited to five years. Safekeeping and audit controls for all investments owned by the PTIF must comply with the Money Management Act. - 24 - All secunties purchased are delivered versus payment to the custody of the State Treasurer or the State Treasurer's safekeeping bank, assuring a perfected interest in the securities. Securities owned by the PTIF are completely segregated from securities owned by the State. The State has no claim on assets owned by the PTIF except for any investment of State moneys in the PTIF. Deposits are not insured or otherwise guaranteed by the State. Investment activity of the State Treasurer in the management of the PTIF is reviewed monthly by the State Money Management Council and is audited by the State Auditor. The information in this section concerning the current status of the PTIF has been obtained from sources the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. See "APPENDIX A - SALT LAKE CITY CORPORATION FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 - Notes to the Financial Statements - Note 2- Cash, Cash Equivalents and Investments" below. INSURANCE COVERAGE The City is self-insured for general liability claims, except for liability incurred on premises owned, rented or occupied by the Department of Airports (the "Airport"). The Airport carries a commercial general liability insurance policy with a $500,000,000 limit and no deductible. The Governmental Immunity Fund (an internal service fund) has been established to pay liability claims other than those at the Airport along with certain City Attorney litigation expenses. The City has an all risk property insurance policy that has a limit of $500,000,000 with a $100,000 deductible. Sublimits include: (1) earthquake coverage of $100,000,000 with a deductible of 2% of the value up to $5,000,000 maximum, (2) flood coverage of $100,000,000 with deductibles of $250,000 or $500,000 depending on location, (3) errors and omissions coverage of $100,000,000 with $100,000 deductible, and (4) certified acts of terrorism coverage of $5,000,000 with a $100,000 deductible. The City is self-insured for property loss above the limits and below the deductibles. The operating departments of the General Fund or proprietary funds assume financial responsibility for risk retained by the City for property damage. The Airport is covered by a separate property insurance policy with a maximum policy limit of $500,000,000 annually and a $100,000 deductible per occurrence with sublimits similar to those under the City's policy. Locations covered include Salt Lake City International Airport, South Valley Regional Airport, and Tooele Valley Airport. The City carries a treasurer's bond with a $10,000,000 limit and a $50,000 deductible and a crime bond covering: (1) employee theft with a $1,000,000 limit per occurrence and a $50,000 deductible, (2) depositors forgery or alteration with a $25,000 limit and a deductible of $500, (3) money orders and counterfeit currency with a $50,000 limit and no deductible, (4) crime - inside and outside premises - each with a $50,000 limit and a $2,500 deductible, and (5) money, securities and other property with a $50,000 limit and a $2,500 deductible. - 25 - The City purchases excess workers' compensation coverage with a $40,000,000 limit and $1,000,000 self-insured rentention (SIR) per claim. The City is self-insured for losses above the limit and below the SIR. Further, the City is self-insured for employee long-term disability and unemployment. The Risk Management Fund (an internal service fund) has been established to pay these claims along with health insurance premiums and certain administrative expenses. During the past three fiscal years, there have been no settlements that exceeded the self-insured retention. See "APPENDIX A- SALT LAKE CITY CORPORATION FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 - Note 11 - Risk Management." EMPLOYEE WORKFORCE AND RETIREMENT SYSTEM; POSTEMPLOYMENT BENEFITS Employee Workforce and Retirement System. The City currently employs approximately 2,622 full-time employees and approximately 419 hourly and part-time employees for a total employment of approximately 3,041 employees. The City participates in three cost-sharing multiple-employer public employee retirement systems and one multiple employer agent system which are defined benefit retirement plans covering public employees of the State and employees of participating local governmental entities (the "Systems"). The Systems are administered under the direction of the Utah State Retirement Board whose members are appointed by the Governor of Utah. See "APPENDIX A- SALT LAKE CITY CORPORATION FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 - Notes to Financial Statements -Note 6- Long- Term Obligations," "- Note 12 - Pension Plans" and "- Note 14 - Deferred Compensation Plans." Beginning July 1, 2014, the City will be required to record a liability and expense equal to its proportionate share of the collective net pension liability and expense of the Systems due to the implementation of GASB 68. The City cannot determine at this time what the amount of such liability and expense will be. Other Postemployment Benefits. The City currently provides postemployment health care and life insurance benefits to all employees who retire from the City and meet certain other qualifications. The benefits, benefit levels, employee contributions and employer contributions are governed by City policy and can be amended at any time (including terminating such benefits). The Governmental Accounting Standards Board issued Statement 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and Statement 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, which became effective for the City for its fiscal year ending June 30, 2008. The City contracted with an actuarial firm to provide the City with its estimated postemployment benefits liability. Such actuarial firm determined that the City's accrued actuarial liability for its postemployment benefits was $112,909,000 at July 1, 2012. The other postemployment benefit ( "0 P EB") cost and annual required contribution for the year ended June 30, 2013 were $11,305,000 and $11,430,000, respectively. The City currently funds its OPEB costs on a pay-as-you-go basis and during the fiscal year ended June 30, 2013 contributed $2,397,000. During this same period, net OPEB obligations increased from $30,917,000 to $39,824,000. For additional information regarding the City's postemployment benefits see "APPENDIX A - SALT - 26 - D EBT ST R U CT U RE For purposes of the information set forth under this section under the heading entitled "Outstanding Debt Issues" the Series 20/4B Bonds are considered issued and outstanding. OUTSTANDING DEBT ISSUES (EXPECTED AS OF CLOSING DATE OF SERIES 2014B BONDS) OJ General Obligation Bonds: Series 1999 (Library Bonds) Series 2002 Building and Refunding (Refund portion of Series 1999) Series 2009A (Open Space) Series 2009B (The Leonardo) Series 2010A (Public Safety Facilities) <2> Series 2010B (Public Safety Facilities) Series 2011 (Open Space) Series 2012A (Refunded a portion of Series 2002) Series 2013 (Refunded a portion of Series 2004A) Series 2013B (Taxable Sports Complex) Series 2013C (Open Space) Total Water and Sewer Revenue Bonds: Series 2005 Improvement and Refunding Bonds Series 2008 Improvement and Refunding Bonds Series 2009 (Taxable) Series 20 l O Revenue Bonds Series 2011 Revenue Bonds Series 2012 Improvement and Refunding Bonds Total Special Improvement District and Assessment Area Bonds: Series 2006 106024 Series 2006 102004 Series 2007 106018 Series 2007 102109 & 102129 Series 2009B 103006 Series 2009C 102145 & 102146 Total AMOUNT OF ORIGINAL ISSUE $ 81,000,000 48,855,000 800,000 10,200,000 25,000,000 100,000,000 1,580,000 10,635,000 6,395,000 15,300,000 3,020,000 FINAL MATURITY DATE 6/15/2019 6/15/2017 12/15/2018 6/15/2029 6/15/2030 6/15/2031 6/15/2021 6/15/2019 6/15/2024 6/15/2028 6/15/2023 PRINCIPAL OUTSTANDING 11,075,000 14,800,000 6,300,000 12,000,000 8,000,000 28,565,000 2/1/2017 2/1/2024 2/1/2031 2/1/2031 2/1/2027 2/1/2027 472,000 294,000 376,000 129,000 1,263,000 396,000 2/1/2016 6/1/2016 6/1/2017 6/1/2017 9/1/2019 9/1/2019 Sales and Excise Tax Revenue Bonds: Series 2004 Refunding (Adjustable Rate) Series 2005A Refunding Series 2007 A Series 2009A Series 2012A Series 2013A (Federally Taxable) Series 2013B Series 2014A (Federally Taxable) Series 2014B)<4> Total $ 150,000 16,390,000 455,000 8,255,000 21,285,000 84,355,000 1,120,000 10,635,000 6,395,000 14,423,000 2.723.000 $166,186,000 $ 3,710,000 10,135,000 5,355,000 10,190,000 6,605,000 24.110.000 $60,105,000 $111,000 70,000 130,000 45,000 816,000 231.000 $1,403,000 $17,300,000 47,355,000 8,590,000 36,240,000 15,855,000 51,270,000 7,315,000 6/1/2015 10/1/20_ 10/1/2026 10/1/2028 10/1/2032 4/1/2038 10/1/2033 10/1/2020 _!_!_ $ 1,280,000 5,870,000 30,035,000 14,775,000 51,270,000 7,315,000 Tax and Revenue Anticipation Notes: Series 20 J 4 i5J Local Building Authority Lease Revenue Bonds'?': Series 2013A Series 2014A Total $ $19,000,000 $7,180,000 7,095,000 6/30/2015 10/15/2034 4/15/2035 $19,000,000 $ 7,180,000 7.095 000 $14,275.000 Prelimmary; subject to change. (I) The Redevelopment Agency of Salt Lake City, a separate entity, has issued bonds, but such bonds are not obligations of the City and are therefore not included in this table. See "APPENDIX A-SALT LAKE CITY CORPORATION FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013-Notes to the Financial Statements-Note 6-Long-Term Obligations." (2) The Series 2010A Bonds maturing 2011 through 2016 are tax-exempt and the Series 2010A Bonds maturing 2017 through 2030 are federally taxable-direct pay-Build America Bonds. (3) After giving effect to the refunding of the Refunded Bonds. (4) For the purposes of this Official Statement, the Series 2014B Bonds are considered issued and outstanding. (5) Expected to be issued on July 9, 2014. (6) The Local Building Authority of Salt Lake City is a separate entity. Lease Revenue Bonds are not obligations of the City, but are paid from annually appropriated rental payments made by the City. - 28 - FUTURE DEBT PLANS The City continually evaluates its capital funding requirements. Although not definite, the City currently has no plans to issue additional Bonds in the fiscal year ending June 30, 2015. [The City anticipates issuing approximately $9 million of bonds secured by a pledge of motor fuel excise tax revenues received by the City, which motor fuel excise tax revenues are not Pledged Excise Taxes.] The City plans to launch a terminal redevelopment program at the Salt Lake City International Airport. The $1.8 billion project will be phased in over 8-10 years and will create a single terminal, concourses, parking and support facilities. The program is expected to address seismic risk, provide right-sized facilities, solve operation issues, improve customer service, and will accommodate growth while maintaining the Airport's competitive cost. It is currently anticipated that the Airport project will be financed by bonds issued by the City and secured by airport revenues. RECENT DEVELOPMENTS In establishing the budget for the current fiscal year, the City anticipated a better economic picture than existed in the previous fiscal year, including increasing the budget for Local Sales Tax revenues by 4.6%, for the first seven months of the current fiscal year, Local Sales Tax revenues have grown by about 3 .0% from the prior fiscal year over the same period of time. Franchise taxes and building permits fees revenues are projected to be below budget due to a change in billing. Court fines and parking tickets are projected to be down approximately $1.4 million. Based on those facts, the City is currently projecting that its total actual revenues for the fiscal year June 30, 2014 will be over budget by about $200,000. The City continues to monitor its revenues very closely. In fiscal year 2014 the City gave employees an approximate 1.0% salary increase, plus a step increase depending on the number of years of service. The step increase had a range from 5% to 8%. The City implemented in 2011 a high deductible health insurance program and 48% of the employees chose to move to that plan. In fiscal year 2014, approximately 74% of the City's employees enrolled in the high deductible plan. The City expects that the high deductible plan will produce significant savings in the City's health insurance expenses. The City's insurance cost decrease for the fiscal year 2015 is 4.0% for the high deductible plan and 10% increase for other plans. Insurance reserve refunded $2.5 million in premiums to the employees in December 2013. The City ended the fiscal year 2013 with a positive variance of $2.3 million of expenditures under budget. Property tax revenues were higher than budgeted due to an increase in personal property values by 3.1 million. The City also experienced decreased revenues for court fines and parking tickets. Shortfalls from those revenue streams totaled approximately $3.2 million under budget. Sales tax collections were approximately $1.2 million over budget and were able to cover the shortfalls experienced in other revenue streams, which resulted in a $1.7 million surplus over budget for the fiscal year's revenues. - 29 - With increasing sales tax collections and stable property tax revenue, the City has been able to withstand the recession in the past years. Fund balance for the end of the fiscal year 2013 was $27.1 million or 13 .4% of total revenues for the year. The City Council and administration have an internal goal to keep the fund balance above 10% of total revenue for each fiscal year. The City Council increased the property taxes by $8 million for the current fiscal year, $3 million of which will go to the general fund operating needs and $5 million to capital improvements. The fund balance increased by $2.0 million (on a GAAP basis) compared to the previous fiscal year. Although the City Council has not yet approved a budget for FY 2014-15, the Mayor's Recommended Budget assumes continued moderate growth in both sales tax and franchise tax for the upcoming fiscal year. Overall, the budget is expected to grow by approximately 2.2 percent. The majority of the increase is associated with employee related costs, including increased pension contributions and the first significant cost of living increase in a number of years. Revenues continue to be monitored closely. FINANCIAL INFORMATION REGARDING THE CITY FIVE YEAR FINANCIAL SUMMARY The summaries contained herein were extracted from the City's financial statements for the fiscal years ended June 30, 2009 through June 30, 2013. The summaries are unaudited. See also "APPENDIX A- SALT LAKE CITY CORPORATION FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2013." (The remainder of this page intentionally left blank.) - 30 - SALT LAKE CITY CORPORATION, UTAH STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - GENERAL FUND (FISCAL YEARS ENDED JUNE 30) Unaudited Revenues And Expenditures 2013 2012 2011 2010 2009 Revenues: General property tax $67,309,705 $62,347,247 $ 62,240,024 $67,575,196 $ 66,237,313 Sales, use and excise taxes 53,775,978 49,635,583 46,418,446 44,089,318 47,303,903 Franchise taxes 27,843,740 28,232,971 26,549,178 26,321,802 26,318,421 Licenses 11,846,336 9,755,248 8,240,903 8,076,923 7,861,188 Permits 8,187,911 8,863,736 7,205,559 6,708,832 9,826,201 Fines and forfeitures 5,097,550 5,840,640 6,006,047 6,700,748 6,541,816 Interest 415,827 433,122 883,293 1,189,706 2,309,596 Intergovernmental 5,032,566 5,039,294 5,310,838 4,761,320 4,761,925 Interfund service charges 9,834,116 9,830,406 9,212,199 9,333,427 9,509,226 Parking meter collections 3,003,184 1,791,922 1,557,878 2,027,206 1,646,261 Parking tickets 3,041,874 3,374,058 2,764,396 3,808,670 3,969,193 Charges for services 4,195,655 4,558,938 3,944,391 3,926,353 4,294,227 Contributions 23,679 10,650 19,010 16,342 19,750 Miscellaneous 3,526,351 2,708,746 2,468,362 855 045 593,688 Total Revenues 203,134,472 192,422,561 182,820,524 185,390,888 191,192,708 Expenditures: City Council 2,224,525 2,178,462 1,941,221 1,740,270 1,777,148 Mayor 2,473,056 2,452,208 2,176,527 1,770,292 1,910,635 City Attorney 5,422,770 5,212,761 4,912,008 4,237,824 4,662,167 Finance 5,603,552 4,702,460 4,143,529 Administrative Services 11,307,473 11,819,338 Fire 34,184,764 35,529,048 33,184,291 31,507,737 33,033,125 Combined Emergency Services 5,121,394 Police 54,719,921 56,894,419 54,842,430 53,305,931 54,178,976 Community & Econ Dev. 16,823,833 17,029,116 15,773,014 12,787,152 14,012,246 Justice Court 3,928,490 4,226,916 4,149,402 Human Resources 1,882,475 1,760,846 1,567,069 Public Services 33,287,092 33,515,617 30,452,729 33,265,127 36,899,117 Nondepartmental 21359218 15 898,701 15 321,626 15 044 806 16 479 624 Total Expenditures 187,031 090 179,400 554 168,463 84(:i 164 266 612 174 71.2 376 Revenues Over Expenditures 16,103,382 13,022,007 14,356,678 20 424,276 16 420,332 Other Financing Sources (Uses): Proceeds from sale of property 542,981 488,761 440,447 524,810 465,433 Transfers in 4,156,639 3,518,849 4,313,497 10,208,409 6,138,963 Transfers out (18 813,137) (18,362,584) (18,939 614} (29,123,275) (26,903,129) Total Other Financing Sources (Uses) (14,113,517) (14,354,974) (14,185,670) (18,390,056) (20,298,733) Net Change in Fund Balances 1,989,865 (1,332,967) 171,008 2,034,220 (3,878,401) Fund Balance Prior Year (July I) 25,131,008 26,463,975 26,292,967 24,258,747 28,137,148 Fund Balance Year End (June 30) $27 )20 873 $25 )31 008 $26 463,975 $26 222,967 $24 258 747 (Source: The City's Comprehensive Annual Financial Report for the indicated years. This summary has not been audited.) - 31 - S A L T L A K E C IT Y C O R P O R A T IO N , U T A H B A L A N C E S H E E T - G O V E RN M E N T A L F U N D S - G E N E R A L F U N D (FI S C A L Y E A R S E N D E D JU N E 30) Unaudited ASSETS AND OTHER DEBITS 2013 2012 2011 2010 2009 Assets: Cash and cash equivalents $ 26,293,281 $ 21,931,749 $ 23,394,832 $ 23,967,967 $ 23,135,4~6 Receivables: Property, franchise and excise taxes 85,748,520 80,220,923 76,027,526 77,169,851 81,747,405 Loans, prepaids and other receivables 2,890,736 2,742,556 2,450,609 Due from other governments 5,000 Other, principally accrued interest 412,370 277,259 343,948 1,749,000 469,434 Restricted Assets: Cash and cash equivalents 113 801 142 501 128,589 281,325 Total Assets and Other Debits $))5 349 907 $)05 286 288 $)02 359 4)6 $)03 085 407 $)05 633 650 LIABILITIES AND FUND BALANCE Liabilities: Accounts payable $ 3,029,608 $ 2,609,281 $ 2,865,91 I $ 2,683,627 $ 2,433,248 Accrued liabilities 13,428,351 12,119,520 10,497,536 10,445,611 10,358,992 Current deposits and advance rentals 1,441,539 1,076,864 873,199 521,559 1,120,473 Delayed Revenue Recognition 70,329,536 64,349,615 61,658,795 63,141,643 67,462,190 Total liabilities 88,229,034 80,155,280 75,895,441 76,792,440 81,374903 Fund Balances: Reserved for encumbrances 2,972,401 1,931,020 Nonspendable 2,582,478 3,079,857 6,708,923 Restricted 113,801 Committed 2,142,919 Assigned 2,369,642 198,589 281,325 Unassigned 22,168,753 19,794,431 19,755,052 23,121,977 22,046,402 Total fund balances 27,120,873 25,131,008 26,463,975 26,292,967 24,258,747 Total Liabilities and Fund Balances $115 349,907 $)05 286 288 $1023594]6 $103 085 407 $105 633 650 (Source: The City's Comprehensive Annual Financial Report for the indicated years. The summary above has not been audited.) Set forth below are brief descriptions of the various sources of revenues available to the City's general fund. The percentage of total general fund revenues represented by each source is based on the City's audited June 30, 2013 fiscal year period: General property taxes - Approximately 33% of general fund revenues are from general property taxes. Sales, use and excise taxes - Approximately 26% of general fund revenues are from sales, use and excise taxes. Franchise taxes - Approximately 14% of general fund revenues are from franchise taxes. - 32 - Licenses and Permits - Approximately 10% of general fund revenues are from licenses and permits. Interfund service charges - Approximately 5% of general fund revenues are from interfund service charges. Fines and forfeitures - Approximately 3% of general fund revenues are from fines and forfeitures. Intergovernmental - Approximately 2% of general fund revenues are from other governmental entities. Charges for Services - Approximately 2% of general fund revenues are from charges for services. Miscellaneous - Approximately 2% of general fund revenues are from miscellaneous revenues. Parking tickets - Approximately 1 % of general fund revenues are from parking tickets. Parking meter - Approximately 1 % of general fund revenues are from parking meters. Contributions - Less than 1 % of general fund revenues are from contributions. Interest - Less than 1 % of general fund revenues are from interest income. ASSESSED TAXABLE AND ESTIMATED FAIR MARKET VALUE OFT AXABLE PROPERTY (YEARS ENDED JUNE 30, 2008 THROUGH 2013Y1l 2013 2012 2011 2010 2009 Assessed Taxable value (2J $18,231,072 $18,297,072 $18,130,323 $18,644,494 $21,012,904 Estimated fair market 24,078,371 24,242,692 24,028,008 24,802,633 27,818,825 value Ratio of assessed taxable value to estimated fair market value 75.7% 68.1% 75.7% 73.9% 75.4% (1) Dollar amounts are in thousands. (2) Note: All taxable property is assessed and taxed on the basis of its fair market value. State law requires that the fair market value of property that is assessed by county assessors using a comparable sales or a cost appraisal method exclude expenses related to property sales transactions. For tax purposes, the fair market value of primary residential property is reduced by 45% under current law. (Source: The City's Comprehensive Annual Financial Report, Statistical Section, Year Ended June 30, 2013.) - 33 - - PRINCIPAL PROPERTY TAXPAYERS ( as of December 31, 2012) 2012 %OF THE CITY'S TAXABLE 2012 TAXABLE TAXPAYER TYPE OF BUSINESS VALUE(l) VALUE(2) LDS Church (Property Reserve, City Creek Reserve) Real Estate Holding $ 777,692,491 4.3% Pacificorp Electric Utility 419,937,864 2.3 Sky West Airlines Air Transportation 177,600,484 1.0 Delta Airlines Air Transportation 173,381,070 1.0 Qwest Corporation Communications 161,451,071 0.9 Wasatch Plaza Holding Real Estate Holding 134,893,400 0.7 Inland Western Salt Lake City Gateway Retail 121,057,400 0.7 Questar Gas Natural Gas Utility 108,951,072 0.6 Boyer Properties Real Estate Holding 92,936,200 0.5 Grand America Hotel Hotel 8,2,609 500 0.5 TOTAL: $2 253 510 552 .8...26%* * Total may not add due to rounding. (1) Taxable Value used in this table excludes all tax equivalent property associated with motor vehicles, watercraft, recreational vehicles, and all other tangible personal property required to be registered with the State. See "FINANCIAL INFORMATION REGARDING SALT LAKE CITY, UTAH - Taxable and Fair Market Value of Property." (2) Based on 2012 total taxable value of $18,231,072,284 (Source: Comprehensive Annual Financial Report of the City for the year ended June 30, 2013.) TAX EXEMPTION FEDERAL INCOME TAXATION Federal tax law contains a number of requirements and restrictions which apply to the Series 2014B Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of bond proceeds and any facilities financed therewith, and certain other matters. The City has covenanted to comply with all requirements that must be satisfied in order for the interest on the Series 2014B Bonds to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the Series 2014B Bonds to become includable in gross income for federal income tax purposes retroactively to the date of issuance of the Series 2014B Bonds. Subject to the City's compliance with the above-referenced covenants, under present law, in the opinion of Bond Counsel, interest on the Series 2014B Bonds is excludable from the gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations, but interest on the Series 2014B Bonds is taken into account, however, in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. In rendering its opinion, Bond Counsel will rely upon certifications of the City with respect to certain material facts within the City's knowledge. Bond Counsel's opinion represents - 34 - its legal judgment based upon its review of the law and the facts that it deems relevant to render such opinion and is not a guarantee of a result. The Internal Revenue Code of 1986, as amended (the "Code"), includes provisions for an alternative minimum tax ( "AMT") for corporations in addition to the corporate regular tax in certain cases. The AMT for a corporation, if any, depends upon the corporation's alternative minimum taxable income ( "AMTI"), which is the corporation's taxable income with certain adjustments. One of the adjustment items used in computing the AM TI of a corporation (with certain exceptions) is an amount equal to 75% of the excess of such corporation's "adjusted current earnings" over an amount equal to its AMTI (before such adjustment item and the alternative tax net operating loss deduction). "Adjusted current earnings" would include certain tax-exempt interest, including interest on the Series 2014B Bonds. Ownership of the Series 2014B Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Prospective purchasers of the Series 2014B Bonds should consult their tax advisors as to applicability of any such collateral consequences. The issue price (the "Issue Price") for each maturity of the Series 2014B Bonds is the price at which a substantial amount of such maturity of the Series 2014B Bonds is first sold to the public. The Issue Price of a maturity of the Series 2014B Bonds may be different from the price set forth, or the price corresponding to the yield set forth, on the cover page hereof. Owners of the Series 2014B Bonds who dispose of Series 2014B Bonds prior to the stated maturity (whether by sale, redemption or otherwise), purchase Series 2014B Bonds in the initial public offering, but at a price different from the Issue Price or purchase Series 2014B Bonds subsequent to the initial public offering should consult their own tax advisors. If a Series 2014B Bond is purchased at any time for a price that is less than the Series 2014B Bond's stated redemption price at maturity, the purchaser will be treated as having purchased a Series 2014B Bond with market discount subject to the market discount rules of the Code (unless a statutory de minimis rule applies). Accrued market discount is treated as taxable ordinary income and is recognized when a Series 2014B Bond is disposed of (to the extent such accrued discount does not exceed gain realized) or, at the purchaser's election, as it accrues. The applicability of the market discount rules may adversely affect the liquidity or secondary market price of such Series 2014B Bond. Purchasers should consult their own tax advisors regarding the potential implications of market discount with respect to the Series 2014B Bonds. An investor may purchase a Series 2014B Bond at a price in excess of its stated principal amount. Such excess is characterized for federal income tax purposes as "bond premium" and must be amortized by an investor on a constant yield basis over the remaining term of the Series 2014B Bond in a manner that takes into account potential call dates and call prices. An investor cannot deduct amortized bond premium relating to a tax-exempt bond. The amortized bond - 35 - premium is treated as a reduction in the tax-exempt interest received. As bond premium is amortized, it reduces the investor's basis in the Series 2014B Bond. Investors who purchase a Bond at a premium should consult their own tax advisors regarding the amortization of bond premium and its effect on the Series 2014B Bond's basis for purposes of computing gain or loss in connection with the sale, exchange, redemption or early retirement of the Series 2014B Bond. There are or may be pending in the Congress of the United States legislative proposals, including some that carry retroactive effective dates, that, if enacted, could alter or amend the federal tax matters referred to above or adversely affect the market value of the Series 2014B Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to bonds issued prior to enactment. Prospective purchasers of the Series 2014B Bonds should consult their own tax advisors regarding any pending or proposed federal tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal tax legislation. The Internal Revenue Service (the "Service") has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is ineluctable in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Series 2014B Bonds. If an audit is commenced, under current procedures the Service may treat the City as a taxpayer and the Bondholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Series 2014B Bonds until the audit is concluded, regardless of the ultimate outcome. Payments of interest on, and proceeds of the sale, redemption or maturity of, tax-exempt obligations, including the Series 2014B Bonds, are in certain cases required to be reported to the Service. Additionally, backup withholding may apply to any such payments to any Bond owner who fails to provide an accurate Form W-9 Request for Taxpayer Identification Number and Certification, or a substantially identical form, or to any Series 2014B Bond owner who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns. The reporting and backup withholding requirements do not affect the excludability of such interest from gross income for federal tax purposes. UTAH INCOME TAXATION In the opinion of Bond Counsel, under the existing laws of the State of Utah, as presently enacted and construed, interest on the Series 2014B Bonds is exempt from taxes imposed by the Utah Individual Income Tax Act. Bond Counsel expresses no opinion with respect to any other taxes imposed by the State or any political subdivision thereof. Ownership of the Series 2014B Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Series 2014B Bonds. Prospective purchasers of the Series 2014B Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. - 36 - No DEFAULTED BONDS The City has never failed to pay principal and interest when due on any of its bonds, notes or other financial obligations. CONTINUING DISCLOSURE AGREEMENT The City will enter into a Continuing Disclosure Agreement (the "Agreement"), in substantially the form attached hereto as APPENDIX F, for the benefit of the beneficial owners of the Series 2014B Bonds to send certain information annually and to provide notice of certain events to the Municipal Securities Rulemaking Board pursuant to the requirements of Section (b)(5) of Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission (the "Commission") under the Securities Exchange Act of 1934. A failure by the City to comply with the Agreement will not constitute a default under the Indenture and beneficial owners of the Series 2014B Bonds are limited to the remedies described in the Agreement. A failure by the City to comply with the Agreement must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Series 2014B Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Series 2014B Bonds and their market price. See "FORM OF CONTINUING DISCLOSURE AGREEMENT" attached hereto as APPENDIX F for the information to be provided, the events which will be noticed on an occurrence basis and the other terms of the Agreement, including termination, amendment and remedies. The City has entered into a number of continuing disclosure undertakings with respect to the bonds it has issued and has contracted with a number of dissemination agents to file annual information and notices of certain events on behalf of the City. The City recently determined that although the City provided its annual financial information and audited financial statements to the applicable dissemination agent in the required time frame, the dissemination agent for certain of its bonds filed such information on a date that was later than required by the applicable continuing disclosure undertakings, but in no case later than 30 days beyond the required filing deadline. The City also determined that (i) historical revenue data relating to the Bonds for fiscal year 2008 did not appear to be on file with the then applicable Nationally Recognized Municipal Securities Information Repositories ("NRMS/Rs") and (ii) fiscal year 2009 audited financial statements and operating data for fiscal year 2008 for the City's 2003 special assessment bonds did not appear to be on file with the then applicable NRMSIRs. In each instance the required information was provided to the applicable dissemination agent in a timely manner, but was not subsequently posted by the dissemination agent. While such information was included as historical information in later disclosure filings, the City has filed these reports on EMMA so that its historical record is complete. The City will continue its practice of providing required information to its dissemination agents in sufficient time to allow the dissemination agents to file as required under the applicable - 37 - continuing disclosure undertaking and dissemination agency agreement and has contacted each of its dissemination agents regarding the requirement for timely filing. Except as described above, the City is in material compliance with each continuing disclosure undertaking entered into pursuant to the Rule. RATINGS As of the date of this Official Statement Standard and Poor's Ratings Services, a Standard & Poor's Financial Services LLC business, and Moody's Investors Service, Inc., have rated the Series 2014B Bonds" __ " and" __ ," respectively. Such ratings reflect only the views of such organizations and any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agency providing such rating if, in the judgment of the rating agency, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Series 2014B Bonds. FINANCIAL ADVISOR The City has entered into an agreement with Lewis Young Robertson & Burningham, Inc. (the "Financial Advisor"), whereunder the Financial Advisor provides financial recommendations and guidance to the City with respect to preparation for sale of the Bonds, timing of the sale, tax-exempt bond market conditions, costs of issuance and other factors related to the sale of the Series 2014B Bonds. The Financial Advisor has participated in the preparation of and provided information for certain portions of the Official Statement, but has not audited, authenticated or otherwise verified the information set forth in the Official Statement, or any other related information available to the City, with respect to accuracy and completeness of disclosure of such information, and the Financial Advisor makes no guaranty, warranty or other representation respecting accuracy and completeness of the Official Statement or any other matter related to the Official Statement. LEGAL MATTERS LITIGATION The City Attorney reports the following matters involving potential financial liability of the City: Lawsuits are periodically filed against the City and/or its employees, involving tort and civil rights matters. The City has a statutory obligation to defend and indemnify its officers and employees in relation to lawsuits arising from acts or failures to act of the officers or employees while in the scope and course of employment. - 38 - The City maintains a governmental immunity fund for claims against the City. In the event the fund is not sufficient to pay any outstanding judgment or judgments, the City has the ability under State law to levy a limited ad valorem tax to pay such judgments. This tax levy is separate and apart from the other taxing powers of the City. The City also has contract claims, condemnation proceedings and environmental matters, none of which is expected to materially adversely affect the City's financial condition. A non-litigation certificate or opinion executed by the City Attorney, dated the date of closing, will be provided stating, among other things, that to the best of her knowledge, after due inquiry, no litigation, with merit, in the State or federal court has been served on the City or is, to the best of her knowledge, threatened, challenging the creation, organization or existence of the City, or the titles of its officers to their respective offices, or seeking to restrain or enjoin the issuance, sale or delivery of the Series 2014B Bonds, or for the purpose of restraining or enjoining the levy and collection of taxes or assessment by the City, or directly or indirectly contesting or affecting the proceedings or the authority by which the Series 2014B Bonds are issued, the legality of the purpose for which the Series 2014B Bonds are issued, or the validity of the Series 2014B Bonds, or the issuance thereof. APPROVAL OF LEGAL PROCEEDINGS The authorization and issuance of the Series 2014B Bonds are subject to the approval of Chapman and Cutler LLP, Bond Counsel to the City. Certain legal matters will be passed upon for the City by the City Attorney and by Chapman and Cutler LLP, as the City's disclosure counsel. The approving opinion of Bond Counsel will be delivered with the Series 2014B Bonds in substantially the form set forth in APPENDIX D of this Official Statement and will be made available upon request from the contact persons as indicated under "INTRODUCTION-Contact Person." INDEPENDENT AUDITORS The basic financial statements of Salt Lake City Corporation as of and for the year ended June 30, 2013, included in APPENDIX A to this Official Statement, have been audited by Eide Bailly LLP, independent auditors, as stated in their report (which report includes an explanatory paragraph referring to the restatement of beginning net assets to correct the deferral of property tax revenue and the recognition of revenue for impact fees, fines, and operating grants) appearing in APPENDIX A herein. Copies of the City's comprehensive annual financial report may be obtained upon request from the City Treasurer's office, 451 South State Street, Room 228, Salt Lake City, Utah 84111. - 39 - MISCELLANEOUS ADDITIONAL INFORMATION All quotations from and summaries and explanations of the Utah Constitution, statutes, programs, laws of the State, court decisions, and the Indenture, which are contained herein, do not purport to be complete, and reference is made to said Constitution, statutes, programs, laws, court decisions, and the Indenture for full and complete statements of their respective provisions. Any statement in this Official Statement involving matters of opinion, whether or not expressly so stated, is intended as such and not as representations of fact. The appendices attached hereto are an integral part of this Official Statement, and should be read in conjunction with the foregoing material. The delivery of the Official Statement and its distribution and use has been duly authorized by the City. SALT LAKE CITY, UTAH By: Mayor - 40 - APPENDIXC DEMOGRAPHIC AND ECONOMIC INFORMATION REGARDING THE CITY AND SALT LAKE COUNTY THE CITY POPULATION %INCREASE SALT %INCREASE %INCREASE THE FROM PRIOR LAKE FROM PRIOR THE FROM PRIOR YEAR CITY PERIOD COUNTY PERIOD STATE PERIOD 2012 Estimate 189,314 0.69% 1,063,842 1.54% 2,855,287 1.45% 2011 Estimate 188,010 0.84 1,047,746 1.73 2,814,347 1.83 2010 Census 186,440 2.58 1,029,655 14.61 2,763,885 23.77 2000 Census 181,743 13.63 898,387 23.75 2,233,169 29.62 1990 Census 159,936 (1.90) 725,956 17.27 1,722,850 17.92 1980 Census 163,034 (7 .31) 619,066 34.99 1,461,037 37.93 1970 Census 175,885 (7.16) 458,607 19.73 1,059,273 18.94 (Source: U.S. Census Bureau.) PROPERTY VALUE OF PRE-AUTHORIZED CONSTRUCTION IN THE CITY ADDITIONS, TOTAL NEW ALTERATIONS AND REPAIRS CONSTRUCTION Non- Non- % Change Number Residential residential Residential residential from Dwelling Value Value Value Value Value Prior Year Units ($000) ($000) ($000) ($000) ($000) Period 2012 183 $55,447.00 $207,937.40 $15,396.30 $92,662.50 $371,443.20 (13.8)% 2011 347 33,510.60 203,468.20 16,840.70 176,942.50 430,762.00 50.6 2010 111 14,730.90 104,795.60 29,036.90 137,507.90 286,071.30 (22.4) 2009 338 132,880.60 91,434.90 48,393.80 95,826.60 368,535.90 (36.5) 2008 508 156,110.90 289,111.10 29,438.60 105,808.00 580,468.60 13.0 (Source: Bureau of Economic and Business Research, University of Utah.) BUSINESS AND INDUSTRY TAXABLE SALES AND LOCAL OPTION SALES TAX ALLOCATION - THE CITY YEAR ENDED JUNE30 GROSS TAXABLE SALES 2012 2011 2010 2009 2008 $6,107,403,182 5 ,697 ,004 ,4 71 5,041,613,325 5,272,280,483 5,521,248,261 % CHANGE OVER PRIOR YEAR NET LOCAL SALES TAX ALLOCATIONS % CHANGE OVER PRIOR YEAR 7.20% 13.00 (4.38) ( 4.51) $44,660,082 41,122,239 39,175,947 43,103,218 46,400,880 8.60% 4.97 (9 .11) (7.11) (Source: Utah State Tax Commission.) C-1 THE COUNTY The following demographic information is provided solely as background information regarding Salt Lake County (the "County"), the county in which the City is located. The County is the economic and population center of the State. Based on 2010 Census data, the County has approximately 37% of the total population of the State. SALES AND BUILDING IN SALT LAKE COUNTY SALES AND BUILDING 2012(p) 2011 2010 2009 2008 Gross Taxable Sales ($000s) $21,695.0 $19,810.8 $18,798.7 $18,284.2 $20,477.9 Permit Authorized Construction ($000) $1,581,414.9 $1,560,324.4 $1,042,645.9 $1,545,119.4 $1,656,131.1 New Dwelling Units 2,927 2,403 2,193 4,586 3,555 New Residential Value ($000) $632,806.0 $478,242.2 $396,367.2 $649,516.7 $588,477.5 (p) Preliminary (Source: Utah Department of Workforce Services and University of Utah Bureau of Economic and Business Research Construction Information Database.) INCOME AND WAGES IN SALT LAKE COUNTY INCOME AND WAGES 2012(p) 20ll(p) 2010 2009 2008 Total Personal Income ($Millions) n/a $40,995.4 $38,785.6 $37,497.0 $39,667.1 Per Capita Income n/a 39,081 37,538 36,878 39,685 Median Household Income Estimates n/a 59,168(') 56,664 56,954 59,168 Average Monthly Nonfarm Wage $3,826 3,703 3,623 3,551 3,470 (p) Preliminary (1) Median household income 2007-2011, as reported by the U.S. Census Bureau. (Source: Utah Department of Workforce Services.) RATE OF UNEMPLOYMENT - ANNUAL AVERAGE YEAR SALT LAKE COUNTY THE STATE UNITED STATES 2012 5.5% 5.7% 8.1% 2011 6.5 6.7 8.9 2010 7.8 8.0 9.6 2009 7.4 7.6 9.3 2008 3.3 3.5 5.8 (Source: Utah Department of Workforce Services; U.S. Department of Labor.) C-2 L A B O R M A R K ET D A T A O F SAL T L A K E C O U NT Y 2 0 1 2 (p) 2011 2010 2009 2008 Labor Force 551,994 546,055 555,070 560,427 561,383 Employed 521,772 510,310 511,799 519,188 542,813 Unemployed 30,222 35,745 43,272 41,239 18,570 Rate 5.5% 6.5% 7.8% 7.4% 3.3% Nonfarm Jobs 603,913 583,195 571,215 573,449 602,927 % Change Prior Year 3.55% 2.1% -1.7% -4.9% 0.3% Mining 3,652 3,221 2,628 2,527 2,908 Construction 30,535 29,510 29,743 31,300 38,514 Manufacturing 52,503 51,177 50,233 50,360 55,323 Trade/Transportation/Utilities 123,979 118,401 116,462 118,097 125,980 Information 17,468 16,250 16,291 16,545 17,214 Financial Activities 46,724 46,141 45,303 47,501 49,436 Professional/Business Services 100,315 95,528 91,270 89,632 96,990 Education/Health/Social Services 68,028 66,443 65,241 63,454 61,098 Leisure/Hospitality 49,442 47,335 46,607 46,847 48,521 Other Services 18,554 17,890 17,766 18,050 18,884 Government 92,821 91,327 89,623 89,136 88,059 Total Establishments 36,826 35,890 35,363 36,493 37,717 Total Wages ($Billions) 27,727.6 25,917.2 24,478.7 24,435.4 25,103.9 (p) Preliminary. (Source: Utah Department of Workforce Services.) SEVERAL OF THE LARGEST EMPLOYERS IN SALT LAKE COUNTY The following is a list of some of the largest employers in Salt Lake County. {Updated information has been requested.} FIRM NAME INDUSTRY Intermountain Health Care, Inc. University of Utah State of Utah Granite School District Jordan School District Salt Lake County University of Utah Hospital Health Care Higher Education State Government Public Education Public Education Local Government Health Care US Government (excludes Post Office and VA Federal Government Hospital Wal-Mart Warehouse Clubs & Supercenters The Canyons School District L3 Communications Salt Lake City School District Delta Air Lines, Inc. Salt Lake City Zions Bank Public Education Communications Equipment Mfg. Public Education Air Transportation Local Government Banking APPROXIMATE NUMBER OF EMPLOYEES 15 ,000-19 ,999 15,000-19,999 10,000-14,999 7 ,000-9 ,999 5,000-6,999 5 ,000-6 ,999 5,000-6,999 5,000-6,999 4,000-4,999 4,000-4,999 3,000-3,999 3 ,000-3 ,999 3,000-3,999 3,000-3,999 3 ,000-3 ,999 C-3 F IR M N A M E IN D U STRY S m ith 's M ar k e tp la c e U .S . P o sta l S e rv ic e S a lt L ak e C o m m u n ity C o ll e g e D isc o v e r A R U P L a b o ra to rie s W e ll s F ar g o B a n k K e n n e c o tt U ta h C o p p e r U n ite d P a rc e l S e rv ic e S k y w e st A irl in e s V A M e d ic a l C e n te r Je tB lu e C o n v e rg y s U ta h T ra n sit A u th o rity A C S B u sin e ss P ro c e ss S o lu tio n s C e n tra l R e fr ig e ra te d S e rv ic e e B a y In c . T e le p e rfo rm a n c e S t. M ar k s H o sp ita l F id e lity B ro k e ra g e S e rv ic e s C R E n g la n d V e rizo n W ire le ss M e rit M e d ic a l S y ste m s G ra n d A m e ric a H o te l S O S S ta ffi n g S e rv ic e s Q W E S T T h e H o m e D e p o t G o ld m a n S a c h s C o stc o O v e rsto c k .c o m S iz z le r S n o w b ird Jo rd a n V a ll e y /P io n e e r V a ll e y H o sp ita ls C o m c a st P a c ifi C o rp T ar g e t T h e S u n P ro d u c ts C o rp o ra tio n G ro c e ry S to re s F e d e ra l G o v e rn m e n t H ig h e r E d u c a tio n C o n su m e r L e n d in g M e d ic a l L a b o ra to ry B a nk in g M e ta l M a n u fa c tu rin g /M in in g C o u rie r & E x p re ss D e liv e ry S e rv ic e A ir T ra n sp o rt a tio n H e a lth C a re /F e d e ra l G o v e rn m e n t A ir T ra n sp o rt a tio n T e le p h o n e C a ll C e n te r P u b lic U rb a n T ra n sit D a ta Pr o c e ssin g S e rv ic e s T ru c k in g O n lin e A u c tio n s R e ta il T e le p h o n e C a ll C e n te r H e a lth C a re F in a n c ia l S e rv ic e s T ru c k in g T e le c o m m u n ic a tio n s S u rg ic a l & M e d ic a l In stru m e n t M fg . A c c o m m o d a tio n s T e m p o rary H e lp S e rv ic e s T e le c o m m u n ic a tio n s H o m e C e n te r F in a n c ia l S e rv ic e s W a re h o u se C lu b s & S u p e rc e n te rs E le c tro n ic S h ip p in g F u ll -S e rv ic e R e sta u ra n t S k i R e s o rt a n d A c c o m m o d a tio n s H e a lth C ar e C a b le B ro a d c a stin g E le c tric U tility R e ta il S o a p a n d D e te rg e n t M a n u fa c tu rin g APPROXIMATE NUMBER OF EMPLOYEES 3,000-3,999 2 ,000-2 ,999 2,000-2,999 2,000-2,999 2,000-2,999 2,000-2,999 2 ,000-2 ,999 2,000-2,999 2,000-2,999 2,000-2,999 2 ,000-2 ,999 1,000-1,999 1,000-1,999 l ,000-1 ,999 1,000-1,999 1,000-1,999 1,000-1,999 1,000-1,999 1 ,000-1,999 l ,000-1,999 1 ,000-1 ,999 1,000-1,999 l ,000-1,999 l ,000-1,999 1,000-1 ,999 1,000-1,999 1,000-1 ,999 1 ,000-1,999 1,000-1 ,999 1,000-1,999 1 ,000-1,999 1,000-1 ,999 1,000-1,999 l ,000-1,999 1,000-1 ,999 1,000-1,999 (Source: Utah Department of Workforce Services. As of August 2013.) C-4 APPENDIXE PROVISIONS REGARDING BOOK-ENTRY ONLY SYSTEM The Depository Trust Company ("DTC"), New York, NY, will act as secunties depository for the Series 2014B Bonds. The Series 2014B Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Series 2014B Bond certificate will be issued for each maturity of the Series 2014B Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly- owned subsidiary of The Depository Trust & Clearing Corporation ( "DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of the Series 2014B Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2014B Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2014B Bond ( "Beneficial Owner") is in tum to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2014B Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive E-1 cert ifi cates rep resen tin g th eir ow n ersh ip in terests in th e Seri es 2 0 14 B B o n d s, ex cep t in the ev en t th at use of th e b o ok -en try sy stem fo r th e Series 2 0 14 B B o n d s is d isco n tin u ed . T o fa cilitate su b seq u en t tra n sfe rs, all Seri es 2 0 14 B B o n d s dep o sited by D ir ect P art icip an ts w ith D T C are reg istered in th e n am e of D T C 's p art n ersh ip no m in ee, C ed e & C o ., o r su ch oth er n am e as m ay b e req uested by an au th or ized rep resen tativ e of O T C . T h e dep o sit of the Seri es 2 0 14 B B o n d s w ith D T C an d their reg istr atio n in th e nam e of C ed e & C o . o r su ch other D T C nom in ee do no t eff ect an y ch an g e in b en efi cial o w n ersh ip . D T C has no k n o w led g e of th e actual B en efi ci al O w n ers of the S eri es 2 0 14 B B o n d s; D T C 's reco rd s refl ect on ly th e id en tity of th e D irect P art icip ants to w h o se acco u n ts su ch Series 2 0 14 B B o n d s are cred ited , w h ich m ay or m ay not be th e B en efi cial O w n ers. T h e D ir ect an d In d irect P art icip an ts w ill rem ain resp o n sib le fo r k eep in g acco u n t of th eir h o ld in g s on b eh alf of th eir cu sto m ers. C o n v ey ance o f no tices and oth er co m m un ic atio n s by D T C to D ir ect P art icip an ts, by D irect P art icip an ts to In d irect P art icip an ts, an d b y D ir ect P art icip an ts an d Ind irect P art ic ip an ts to B en efi cial O w n ers w ill b e g o v ern ed b y arr an g em en ts am o n g th em , su bject to an y statu tory or reg u latory req u ir em en ts as m ay b e in effect fr o m tim e to tim e . B en efi cial O w n ers of th e Seri es 2 0 14 B B o n d s m ay w ish to tak e cert ain step s to aug m en t tra n sm issio n to them o f no tices of sig n ifi can t ev en ts w ith resp ect to th e Seri es 2 0 14 B B o n d s, su ch as red em p tio n s, ten d ers, defa ult s, an d p ro p o sed am en d m en ts to th e Series 2 0 14 B B o n d do cu m en ts. F o r ex am p le, B en efi ci al O w n ers of th e Series 2 0 14 B B o n d s m ay w ish to ascert ain th at th e no m in ee ho ld in g th e Seri es 20 14 B B o n d s fo r their ben efi t has agreed to ob tain an d tran sm it no tices to B en efi cial O w n ers. In th e altern ativ e, B en efi ci al O w n ers m ay w ish to pro v id e th eir nam es and add resses to th e Seri es 2 0 14 B B o n d R egistrar an d req u est th at co p ies of no tices b e pro v id ed d irectl y to th em . R ed em p tio n no tices sh all b e sen t to D T C . If less th an all of th e Seri es 2 0 14 B B o n d s w ith in an issu e ar e bein g red eem ed , D T C 's pra ctice is to d eterm in e b y lo t th e am ou n t of th e in terest of each D irect P art icip an t in su ch issu e to be red eem ed . N eith er D T C no r C ed e & C o . (n or an y oth er D T C no m in ee) w ill co n sen t o r vote w ith resp ect to th e Series 2 0 14 B B o n d s u n less au th o ri zed b y a D irect P art icip an t in acco rd an ce w ith D T C 's M M I pro ced ur es. U n d er its u su al pro ced ures, D T C m ail s an om n ib u s pro x y to th e C ity as so o n as po ssib le after th e reco rd d ate. T h e om n ib u s p ro x y assig n s C ed e & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2014B Bonds are credited on the record date (identified in a listing attached to the omnibus proxy). As long as the book-entry system is in effect, redemption proceeds, distributions, and dividend payments on the Series 2014B Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detailed information from the City or the Paying Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of E-2 redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Series 2014B Bonds at any time by giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Series 2014B Bond certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Series 2014B Bond certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC' s book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. E-3 CONFORMED COPY MASTER TRUST INDENTURE BETWEEN SALT LAKE CITY, UTAH AND ZIONS FIRST NATIONAL BANK AS TRUSTEE DATED AS OF SEPTEMBER 1, 2004 PROVIDING FOR THE ISSUANCE OF SALES AND EXCISE TAX REVENUE BONDS As Amended by the Fifth Supplemental Trust Indenture, dated as of January 1, 2012 and the Sixth Supplemental Trust Indenture, dated as of June 1, 2012, each between Salt Lake City, Utah and Zions First National Bank, as Trustee 3609323.01.01.B .doc 0867929/RJS/RDB/mo Master Trust Indenture TABLE OF CONTENTS SECTION PAGE Granting Clause 1 ARTICLE I DEFINITIONS, STATUTORY AUTHORITY AND EQUALITY OF BONDS .2 Section 1.01. Definitions 2 Section 1.02. Construction 19 Section 1.03. Authority for the Indenture .19 Section 1.04. Special Obligations 20 ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS .20 Section 2.01. Authorization of Bonds .20 Section 2.02. General Provisions for the Issuance of Bonds 20 Section 2.03. Special Provisions for the Issuance of Construction Bonds .23 Section 2.04. Special Provisions for the Issuance of Refunding Bonds 25 Section 2.05. Provisions Regarding Bonds Secured by a Security Instrument .27 ARTICLE III TERMS AND PROVISIONS OF BONDS 27 Section 3.01. Terms of Bonds 27 Section 3.02. Execution of Bonds; Limited Obligations .29 Section 3 .03. Transfer of Bonds 29 Section 3.04. Exchange of Bonds 30 Section 3.05. Form of Bonds .30 Section 3.06. Bond Registration Books 31 Section 3 .07. Bonds Mutilated, Lost, Destroyed or Stolen 31 ARTICLE IV REDEMPTION OF BONDS 31 Section 4.01. Privilege of Redemption of Bonds 31 Section 4.02. Selection of Bonds for Redemption 31 Section 4 .03. Notice of Redemption 3 2 Section 4.04. Partial Redemption of Bonds; Disposition of Redeemed Bonds 33 Section 4 .05. Effect of Redemption 33 ARTICLE V PLEDGE OF REVENUES; ESTABLISHMENT OF FuNDS AND APPLICATION THEREOF 33 Section 5.01. The Pledge Effected by the Indenture .33 Section 5 .02. Perfection of Security Interest 34 Section 5 .03. Establishment of Funds 34 Section 5.04. Construction Fund .34 Section 5.05. Revenues; Revenue Fund 36 - I - Master Trust Indenture SECTI ON PAGE Section 5 .06. Flow of Funds 36 Section 5 .07. Principal and Interest Fund - Bond Service Account.. 39 Section 5 .08. Principal and Interest Fund - Debt Service Reserve Account.. .40 Section 5 .09. Purchase of Bonds .41 ARTICLE VI COVENANTS OF THE CITY .41 Section 6.01. Punctual Payment of Bonds .41 Section 6 .02. Construction of Projects .41 Section 6.03. No Impairment of Revenues .42 Section 6.04. Against Encumbrances; Further Assurances .42 Section 6.05. Covenant of State of Utah .42 Section 6.06. Accounts and Reports .42 Section 6.07. Maintenance of Paying Agents .43 Section 6.08. Compliance with Indenture .43 Section 6.09. Power to Issue Bonds and Pledge Revenues and Other Funds .44 Section 6 .10. General 44 ARTICLE VII THE TRUSTEE, THE PA YING AGENTS AND THE TRANSFER AGENTS .45 Section 7.01. Trustee 45 Section 7 .02. Paying Agents; Appointment and Acceptance of Duties; Removal 46 Section 7 .03. Terms and Conditions of the Trusts .46 Section 7 .04. Intervention by the Trustee .50 Section 7 .05. Successor Trustee 50 Section 7 .06. Concerning Any Successor Trustee 50 Section 7 .07. Compensation of the Trustee and Its Lien 50 Section 7 .08. Appointment of Co-Trustee 51 Section 7 .09. Appointment, Duties and Term of Remarketing Agent.. .51 Section 7 .10. Appointment, Duties and Term of Additional Transfer Agents 51 ARTICLE VIII MODIFICATION OR AMENDMENT OF INDENTURE 52 Section 8.01. Amendments Permitted 52 Section 8.02. Bondholders' Meetings 55 Section 8.03. Amendment by Written Consent 56 Section 8.04. Disqualified Bonds .56 Section 8 .05. Effect of Modification or Amendment 57 Section 8 .06. Endorsement or Replacement of Bonds Issued After Amendments 57 Section 8 .07. Irrevocable Consent 57 ARTICLE IX EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS 57 Section 9.01. Events of Default 57 Section 9 .02. Remedies 58 Section 9 .03. Accounting and Examination of Records After Default.. .59 -ii- Master Trust Indenture SECTI ON PAGE Section 9 .04. Application of Revenues and Other Moneys after Default.. 59 Section 9 .05. Rights and Remedies of Bondholders 61 Section 9 .06. Appointment of Receiver 62 Section 9.07. Non-Waiver 62 Section 9.08. Remedies Not Exclusive 63 Section 9 .09. Waivers of Events of Default.. 63 ARTICLE X DEPOSITS AND INVESTMENT OF FUNDS 64 Section 10.01. Deposits 64 Section 10 .02. Investment of Funds 65 Section 10 .03. Arbitrage Covenant 66 ARTICLE XI DEFEASANCE 66 Section 11.01. Discharge of Indebtedness 66 Section 11.02. Unclaimed Moneys 68 ARTICLE XII MISCELLANEOUS 68 Section 12.01. Limited Liability of City 68 Section 12 .02. Benefits of Indenture Limited to Parties 68 Section 12.03. Successor is Deemed Included in All References to Predecessor 68 Section 12.04. Execution of Documents by Bondholders 68 Section 12.05. Waiver of Notice 69 Section 12.06. Cremation or Destruction of Cancelled Bonds 69 Section 12.07. Payments Due on Other Than Business Days 69 Section 12.08. Governing Law 69 Section 12.09. System of Registration 69 Section 12 .10. Plan of Financing 69 Section 12.11. Article and Section Headings 70 Section 12.12. Partial Invalidity 70 Section 12.13. Notices 70 Section 12.14. Counterparts 70 Section 12.15. Effective Date 70 Section 12.16. Compliance with Municipal Bond Act and Refunding Bond Act 70 Section 12.17. Representation Regarding Ethical Standards for City Officers and Employees and Former City Officers and Employees 71 SIGNATURES 72 -iii- Master Trust Indenture M ASTER T R UST INDENTURE THIS MASTER TRUST INDENTURE, dated as of September 1, 2004, by and between Salt Lake City, Utah, a municipal corporation and political subdivision of the State of Utah (the "City"), and Zions First National Bank, a national banking association duly organized and qualified under the laws of the United States to accept and administer the trust hereby created, and having a place of business in Salt Lake City, Utah (the "Trustee"): WITNESS ETH: WHEREAS, the City desires to undertake the acquisition, improvement or extension of one or more improvements, facilities or property (or interests therein) which the City is authorized by law to acquire and to finance the cost of such acquisition, improvement or extension by the issuance of sales and excise tax revenue bonds as authorized by law, all payable on a parity as to Revenues of the City as provided herein; Now, THEREFORE, the City and the Trustee agree as follows for the benefit of the other and for the benefit of the owners of the Bonds issued pursuant to this Indenture: Now' THEREFORE, THIS MASTER TRUST INDENTURE WITNESSETH: GRANTING CLAUSE In order to secure the payment of Principal, Redemption Price and interest on the Bonds and of Repayment Obligations in accordance with their terms and the provisions of the Indenture, and to secure the observance and performance of all the covenants contained herein, in the Bonds and in the Repayment Obligations, the City hereby assigns and pledges to the Trustee and grants to the Trustee a security interest in all right, title and interest of the City in and to (1) the proceeds of sale of the Bonds, (2) the Revenues, and (3) all Funds established or confirmed by the Indenture (except for any Rebate Fund), including the investments, if any, thereof, subject to any required rebate of all or a portion of the earnings on such investments to the United States of America pursuant to the requirements of Section 148(f) of the Code, and all other rights hereinafter granted for the further securing of said Bonds and Repayment Obligations (collectively, the "Trust Estate"), subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein; such Trust Estate to be held: FIRST, for the equal and proportionate benefit, security and protection of all Bondholders and all Security Instrument Issuers, without preference, priority or distinction as to security or otherwise of any of the Bonds or Security Instrument Repayment Obligations over any of the others, except as otherwise expressly provided in or permitted by the Indenture, by reason of time of issuance, sale, delivery, maturity or expiration thereof or otherwise for any cause whatsoever; and Master Trust Indenture SECOND, for the equal and proportionate benefit, security and protection of all Reserve Instrument Issuers, without preference, priority or distinction as to security or otherwise of any Reserve Instrument Repayment Obligations over any of the others by reason of time of issuance, delivery or expiration thereof or otherwise for any cause whatsoever. PROVIDED, HOWEVER, that if the City, its successors or assigns, shall well and truly pay, or cause to be paid, the principal and premium, if any, on the Bonds and the interest due or to become due thereon, at the times and in the manner mentioned in the Bonds, all Security Instrument Repayment Obligations, according to the true intent and meaning thereof and all Reserve Instrument Repayment Obligations, according to the true intent and meaning thereof, or shall provide, as permitted by this Indenture, for the payment thereof as provided in Article XI hereof, and shall pay or cause to be paid to the Trustee all sums of money due or to become due to it in accordance with the terms and provisions of this Indenture, then upon such final payments or provisions for such payments by the City, this Indenture, and the rights hereby granted, shall terminate; otherwise this Indenture shall remain in full force and effect. The terms and conditions upon which the Bonds are to be executed, authenticated, delivered, secured and accepted by all persons who from time to time shall be or become Registered Owners thereof, and the trusts and conditions upon which the Revenues are to be held and disposed, which said trusts and conditions the Trustee hereby accepts, are as follows: ARTICLE I DEFINITIONS, STATUTORY AUTHORITY AND EQUALITY OF BONDS Section 1.01. Definitions. Unless the context otherwise requires, the terms in this Section defined shall, for all purposes of the Indenture and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. "Accountant's Certificate" means a certificate signed by an Independent Public Accountant. "Accreted Amount" means, with respect to Capital Appreciation Bonds of any Series and as of the date of calculation, the amount established pursuant to the Supplemental Indenture authorizing such Capital Appreciation Bonds as the amount representing the initial public offering price, plus the accumulated and compounded interest on such Bonds. "Accrued Debt Service" means, as of any date of calculation, the amount of Debt Service that has accrued with respect to any Series of Bonds and any related Security Instrument Repayment Obligations, calculating the Debt Service that has accrued with respect to each Series of Bonds and any related Security Instrument Repayment Obligations as an amount equal to the sum of (a) the interest on the Bonds of such Series and on any related Security Instrument Repayment Obligations that has accrued and is unpaid and that will have accrued by the end of the then-current calendar month, and (b) that portion of all Principal Installments payable within the 12-month period following the date of calculation for the Bonds of such Series and on any -2- Master Trust Indenture related Security Instrument Repayment Obligations that would have accrued, if deemed to accrue in the same manner as interest accrues, by the end of the then current calendar month. "Act" means the Utah Municipal Bond Act, Chapter 14 of Title 11, Utah Code Annotated 1953, as amended, and, to the extent applicable, the Registered Public Obligations Act, Chapter 7 of Title 15, Utah Code Annotated 1953, as amended, and the Utah Refunding Bond Act, Chapter 27 of Title 11, Utah Code Annotated 1953, as amended, and all laws amendatory thereof or supplemental thereto. "Agent" or "Agents" means the Trustee, the Paying Agents, any Transfer Agent, any Depositary, or any or all of them, as may be appropriate. "Aggregate Debt Service" means, as of any date of calculation and with respect to any period, the sum of the amounts of Debt Service for (a) all Series of Bonds then Outstanding and (b) any Repayment Obligations then outstanding. "Amortized Value" means par, if an obligation was purchased at par or, when used with respect to an obligation purchased at a premium above par or at a discount below par, means the value as of any given date obtained by dividing the total amount of the premium or discount at which such obligation was purchased by the number of days remaining to the maturity of such obligation on the date of such purchase and by multiplying the amount thus calculated by the number of days having passed since the date of such purchase and: (a) in the case of an obligation purchased at a premium, by subtracting the product thus obtained from the purchase price to obtain Amortized Value, or (b) in the case of an obligation purchased at a discount, by adding the product thus obtained to the purchase price to obtain Amortized Value. "Authorized Amount" means, with respect to a Commercial Paper Program, the maximum principal amount of commercial paper which is then authorized by the City to be outstanding at any one time pursuant to such Commercial Paper Program. "Authorized Officer" means the Mayor, the City Treasurer, the City Recorder and any other person duly authorized to perform the act or sign the document in question. "Average Aggregate Debt Service" means, as of any date of calculation, the sum of the amounts of Aggregate Debt Service for each Fiscal Year during which any Series of Bonds is Outstanding divided by the number of such Fiscal Years; provided, however, that for purposes of the debt service coverage test required under Section 11-14-17.5(4) of the Utah Municipal Bond Act, the City may exclude from such calculation the Debt Service on any Series of Bonds which are secured, in addition to the pledge of Revenues pursuant to the Indenture, by a pledge of Special Revenues. "Balloon Bonds" means Bonds, other than Bonds which mature within one year of the date of issuance thereof, 25% or more of the Principal Installments on which (a) are due or, (b) at the option of the Holder thereof may be redeemed, during any period of a Year. -3- Master Trust Indenture "Bond Service Account" means the Bond Service Account in the Principal and Interest Fund established in Section 5 .03. "Bondholder," "Holder," "Owner" or "Registered Owner," or any similar term, means the owner of any Bond or Bonds. In the case of a fully-registered Bond, Bondholder means the registered owner of such Bond. "Bonds" means bonds, notes, commercial paper or other obligations (other than Repayment Obligations) authorized by and at any time Outstanding pursuant to the Indenture. The term Bonds includes Construction Bonds and Refunding Bonds. "Business Day" means a day of the year which is not a Saturday, Sunday or legal holiday in New York, New York, or a day on which the Trustee, any Depositary and any Security Instrument Issuer are authorized or obligated to close. "Calendar Year" means the period commencing on January 1 of each year and terminating on the next succeeding December 31. "Capital Appreciation Bonds" means Bonds the interest on which (a) is compounded and accumulated at the rates and on the dates set forth in the Supplemental Indenture authorizing the issuance of such Bonds and designating them as Capital Appreciation Bonds, and (b) is payable upon maturity or redemption of such Bonds. "City" means Salt Lake City, Utah, a municipal corporation and political subdivision of the State, and its successors and assigns. "City Recorder" means the City Recorder of the City, or in the event of his or her disability or absence, a Deputy City Recorder or other person duly authorized to perform the duties of the City Recorder. "City Treasurer" means the City Treasurer of the City, or in the event of his or her disability or absence, the Cash Manager/Investment Analyst or other person duly authorized to perform the duties of the City Treasurer. "Code" means the Internal Revenue Code of 1986, as amended and supplemented from time to time. Each reference to a section of the Code shall be deemed to include the United States Treasury Regulations, including temporary and proposed regulations, relating to such section which are applicable to tax-exempt bonds. "Commercial Paper Program" means commercial paper obligations with maturities of not more than one Year from the dates of issuance thereof which are issued and reissued by the City from time to time pursuant to Article II hereof and are outstanding up to an Authorized Amount. "Construction Bonds" means all Bonds, whether issued in one or more Series, authenticated and delivered pursuant to Section 2.03, and any Bonds thereafter authenticated and -4- Master Trust Indenture delivered in lieu thereof or in substitution therefor pursuant to Article III or Section 4.04 or Section 8.06. "Construction Fund" means the fund by that name established in Section 5.03. "Cost of Construction" means the costs of the City properly attributable to the financing, acquisition, construction, reconstruction, modification or improvement of facilities, property or improvements (or interests therein) which the City is authorized by law to acquire, as identified for a particular Project, and all expenses preliminary and incidental thereto incurred by the City in connection therewith and in the issuance of the Bonds, including all engineering, fiscal and legal expenses and costs of issuance, printing and advertising for which funds may be disbursed from the Construction Fund and the establishment of necessary reserves and payment of interest during construction, including but not limited to: (1) Payment of the costs of acquiring, constructing, reconstructing, modifying, or improving a Project. (2) Payment of the initial or acceptance fee of the Trustee. (3) Payment to the City of such amounts, if any, as shall be necessary to reimburse the City in full for advances and payments theretofore made or costs theretofore incurred by the City for any item of Cost of Construction. (4) Costs for the obtaining of any insurance policies or surety bonds with respect to a Project by the City during the acquisition, construction, reconstruction, modification or improvement of such Project. (5) Payment of audit fees and expenses for maintenance of construction records required to be kept with respect to a Project. (6) Payment of the costs of any necessary litigation and the obtaining of all necessary permits, licenses and rulings. (7) Payment of the costs of issuance of the Bonds including legal, accounting, fiscal agent and underwriting fees and expenses, payments and fees due under any agreement pursuant to which any Series of Bonds is sold, premiums, fees or other charges for or under any Security Instrument or Reserve Instrument, bond discount, printing and engraving costs, and fees of rating agencies, incurred in connection with the authorization, sale and issuance of the Bonds and preparation of the Indenture and Supplemental Indenture pursuant to which the Bonds will be issued. (8) Payment of interest on the Bonds estimated to fall due during the period of construction of a Project and for up to twelve (12) months thereafter (or such different period as may then be permitted by law). -5- Master Trust Indenture (9) The amount, if any, to be deposited into any Series Subaccount in the Debt Service Reserve Account pursuant to paragraph (10) of Section 2.02(a). (10) Working capital determined by the City to be necessary or desirable in connection with a Project and payment of any other costs and expenses relating to a Project, including fees and expenses of the Trustee during the acquisition, construction, reconstruction, modification or improvement of a Project. "Council" means the City Council of the City, or any other governing body of the City hereafter provided for pursuant to law. "Cross-over Date" means with respect to Cross-over Refunding Bonds the date on which the Principal portion of the related Cross-over Refunded Bonds is to be paid or redeemed from the proceeds of such Cross-over Refunding Bonds. "Cross-over Refunded Bonds" means Bonds refunded by Cross-over Refunding Bonds. "Cross-over Refunding Bonds" means Refunding Bonds if the proceeds of such Cross- over Refunding Bonds are irrevocably deposited in escrow to secure the payment on an applicable redemption date or maturity date of the Cross-over Refunded Bonds (subject to possible use to pay Principal of the Cross-over Refunding Bonds under certain circumstances) and the earnings on such escrow deposit are required to be applied to pay interest on the Cross- over Refunding Bonds until the Cross-over Date. "Current Interest Bonds" means Bonds not constituting Capital Appreciation Bonds. Interest on Current Interest Bonds shall be payable periodically on the interest payment dates provided therefor in a Supplemental Indenture. "Debt Service" means, for any particular Fiscal Year and for any Series of Bonds and any Repayment Obligations, an amount equal to the sum of: (a) all interest (net of any amounts deposited with the Trustee from the proceeds of the sales of a Series of Bonds and any interest subsidy with respect to Bonds paid or payable to or for the account of the City by any governmental body or agency, which are available to pay interest on such Series of Bonds) payable during such Fiscal Year on such Bonds then Outstanding and such Repayment Obligations then outstanding, plus (b) the Principal Installments payable during such Fiscal Year on (i) such Bonds Outstanding, calculated on the assumption that Bonds Outstanding on the day of calculation cease to be Outstanding by reason of, but only by reason of, payment either upon maturity or application of any Sinking Fund Installments required by the Indenture, and (ii) such Repayment Obligations then outstanding; provided, however that for purposes of Sections 2.02, 2.03 and 2.04, -6- Master Trust Indenture (1) when calculating the Principal Installments payable during such Fiscal Year, there shall be treated as payable in such Fiscal Year the amount of Principal Installments which would have been payable during such Fiscal Year had the Principal of each Series of Balloon Bonds Outstanding been amortized, from their date of issuance over a period of 30 years, on a level debt service basis at an interest rate equal to the rate borne by such Balloon Bonds on the date of calculation, provided (A) that if the date of calculation is within twelve months before the actual maturity of such Balloon Bonds, the full amount of Principal payable at maturity shall be included in such calculation, and (B) that if there is any Security Instrument Repayment Obligation relating to such Balloon Bonds, the amount of Principal to be taken into account shall be the principal component of such Security Instrument Repayment Obligation; (2) when calculating interest payable during such Fiscal Year for any Series of Variable Rate Bonds or Repayment Obligations bearing interest at a variable rate that cannot be ascertained for any particular Fiscal Year, (A) it shall be assumed that such Series of Variable Rate Bonds or Repayment Obligations will bear interest at the average of the variable rates applicable to such Series of Variable Rate Bonds or Repayment Obligations during any consecutive 12-month period during the immediately preceding 24 months ( or a shorter period, commencing on the date of issuance of the Series of Variable Rate Bonds or the date of incurring such Repayment Obligations and ending within 30 days prior to the date of computation), or, (B) with respect to any Series of Variable Rate Bonds or Repayment Obligations for which such an average of variable rates cannot be determined, (i) at a rate equal to 110% of the most recent Bond Market Association Municipal Swap Index theretofore published in The Bond Buyer, or (ii) if The Bond Buyer is no longer published or no longer publishes the Bond Market Association Municipal Swap Index, at a rate certified by the City's financial advisor, underwriter or other agent, including a Remarketing Agent, to be the rate of interest such Series of Variable Rate Bonds or Repayment Obligations would bear if issued on the date of computation in the same amount, with the same maturity or maturities, with the same security, and bearing interest at a variable rate; (3) when calculating interest payable during such Fiscal Year for any Variable Rate Bonds that are issued with an Interest Rate Swap in which the City has agreed to pay a fixed rate, such Series of Variable Rate Bonds shall be deemed to bear interest at such fixed rate as a result of such Interest Rate Swap; provided that such fixed rate may be utilized so long as such Interest Rate Swap is contracted to remain in full force and effect; ( 4) when calculating interest payable during such Fiscal Year for any Bonds which are issued with a fixed interest rate and with respect to which an Interest Rate Swap is in effect in which the City has agreed to pay a variable rate, such Series of Bonds shall be deemed to be Variable Rate Bonds bearing interest at such variable rate as a result of such Interest Rate Swap; provided that such -7- Master Trust Indenture amounts may be utilized only so long as such Interest Rate Swap is contracted to remain in full force and effect; (5) when calculating interest payable during such Fiscal Year with respect to any Commercial Paper Program, "Debt Service" shall mean an amount equal to the sum of all principal and interest payments that would be payable during such Fiscal Year assuming that the Authorized Amount of such Commercial Paper Program is amortized on a level debt service basis over a period of 30 years beginning on the date of calculation or the period during which obligations can be issued under such Commercial Paper Program, and bearing interest (A) at an interest rate equal to the average of the interest rates applicable to such Commercial Paper Program during any consecutive 12-month period during the immediately preceding 24 months (or a shorter period, commencing on the date obligations are first issued under the Commercial Paper Program) ending within 30 days prior to the date of computation, or (B) with respect to any Commercial Paper Program for which such an average of the interest rates cannot be determined, (i) at a rate equal to 110% of the most recent Bond Market Association Municipal Swap Index theretofore published in The Bond Buyer, or (ii) if The Bond Buyer is no longer published or no longer publishes the Bond Market Association Municipal Swap Index, at an interest rate certified by the City's financial advisor, underwriter or other agent, including a Remarketing Agent, to be the rate of interest that obligations of the Commercial Paper Program would bear if issued on the date of computation in the Authorized Amount, with the same security, bearing interest at a variable rate and maturing over a period of 30 years beginning on the date of calculation; and (6) when calculating interest payable on Bonds that are Paired Obligations, the interest rate on such Bonds shall be the resulting linked rate or effective fixed interest rate to be paid by the City with respect to such Paired Obligations; and further provided, however, that there shall be excluded from "Debt Service" (1) interest on Bonds (whether Cross-over Refunding Bonds or Cross-over Refunded Bonds) to the extent that Escrowed Interest is available to pay such interest, (2) Principal on Cross-over Refunded Bonds to the extent that the proceeds of Cross-over Refunding Bonds are on deposit in an irrevocable escrow in satisfaction of the requirements of Section 11-27-3, Utah Code Annotated 1953, as amended, and such proceeds or the earnings thereon are required to be applied to pay such Principal (subject to the possible use to pay the Principal of the Cross-over Refunding Bonds under certain circumstances) and such amounts so required to be applied are sufficient to pay such Principal, (3) Repayment Obligations to the extent that payments on Pledged Bonds relating to such Repayment Obligations satisfy the City's obligation to pay such Repayment Obligations, and (4) any termination payments with respect to an Interest Rate Swap. "Debt Service Reserve Account" means the Debt Service Reserve Account m the Principal and Interest Fund established in Section 5 .03. -8- Master Trust Indenture "Debt Service Reserve Requirement" means, with respect to any Series Subaccount that has been established in the Debt Service Reserve Account, the amount specified in a Supplemental Indenture as being required to be on deposit in such Series Subaccount. "Depositary" means any bank or trust company selected by the City as a depositary of moneys and securities held under the provisions of the Indenture and may include the Trustee. "Escrowed Interest" means amounts irrevocably deposited in escrow in accordance with the requirements of Section 11-27-3, Utah Code Annotated 1953, as amended, in connection with the issuance of Bonds or Cross-over Refunding Bonds secured by such Cross-over Refunding Bonds or earnings on such amounts which are required to be applied to pay interest on such Cross-over Refunding Bonds or the related Cross-over Refunded Bonds. "Estimated Completion Date" means the estimated date upon which a Project will have been substantially completed in accordance with the plans and specifications applicable thereto as that date shall be set forth in a Written Certificate of the City. "Event of Default" has the meaning specified in Section 9.01. "Fiscal Year" means the annual accounting period of the City as from time to time in effect, initially a period commencing on July 1 of each Calendar Year and ending on the next succeeding June 30. "Fitch" means Fitch Ratings, a corporation organized and existing under the laws of the State of New York, its successors and assigns, and, if such corporation shall no longer perform the functions of a securities rating agency, "Fitch" shall be deemed to refer to another nationally recognized securities rating agency, if any, designated by the City. "Fund" means one of the funds confirm ed or established pursuant to Section 5.03, including the Construction Fund, the Principal and Interest Fund and the Revenue Fund. "Government Obligations" means: (i) Direct obligations of or obligations guaranteed by the United States of America; (ii) Any other evidences of an ownership interest in obligations or in specified portions thereof (which may consist of specified portions of the interest thereon) of the character described in clause (i) above; and (iii) Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state (a) which are not callable at the option of the obligor or otherwise prior to maturity or as to which irrevocable notice has been given by the obligor to call such bonds or obligations on the date specified in the notice, (b) which are fully secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or bonds -9- Master Trust Indenture or other obligations of the character described in clause (i) or clause (ii) above, which fund may be applied only to the payment of interest when due, principal of and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (c) as to which the principal of and interest on the bonds and obligations of the character described in clause (i) or clause (ii) above, which have been deposited in such fund along with any cash on deposit in such fund is sufficient to pay interest when due, principal of and redemption premium, if any, on the bonds or other obligations described in this clause (iii) on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (a) of this clause (iii), as appropriate. "Indenture" means this Master Trust Indenture, as from time to time amended or supplemented by Supplemental Indentures. "Independent Public Accountant" means any certified public accountant or firm of such accountants appointed and paid by the City, and who, or each of whom: (1) is in fact independent and not under domination of the City; (2) does not have any substantial interest, direct or indirect, with the City; and (3) is not connected with the City as an officer or employee of the City, but who may be regularly retained to make annual or other audits of the books of or reports to the City. The Trustee shall be entitled to rely on the written statement of a certified public accountant or firm of such accountants as to his or its compliance with the terms of this definition. "Information Services" means Financial Information, Inc.'s "Daily Called Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Standard & Poor's J. J. Kenny's "Called Bond Service," 55 Water Street, 45th Floor, New York, New York 10041; Mergent's "Municipal and Government Manual," 60 Madison Avenue, New York, New York 10010, Attention: Customer Service and the Municipal Securities Rulemaking Board, CDI, 1900 Duke Street, Alexandria, Virginia 22314, Attention: MSIL Dept.; or, in accordance with then-current guidelines of the Securities and Exchange Commission, such other addresses and/or such other services providing information with respect to called bonds, or no such services, as may be designated in a Written Certificate of the City delivered to the Trustee. "Interest Rate Swap" means an "interest rate contract" within the meaning of the State Money Management Act or other similar agreement related to Bonds of one or more Series, provided that such agreement satisfies the requirements of the State Money Management Act or other applicable provision of State law. "Investment Securities" means any of the following securities, if and to the extent that the same are at the time legal for investment of City funds: (i) any investment authorized from time to time by the provisions of the State Money Management Act, including without limitation the Treasurer's Investment Fund; -10- Master Trust Indenture (ii) T h e fo ll o w in g in v e s tm e n ts fu ll y in s u r e d b y th e F e d e ra l D e p o s it In s u ra n c e C o rp o ra tio n : (a ) c e rt ifi c a te s o f d e p o s it, (b ) sa v in g s a c c o u n ts , (c ) d e p o s it a c c o u n ts , o r (d ) d e p o s ito ry re c e ip ts o f a b a n k , s a v in g s a n d lo a n a s s o ci a tio n s a n d m u tu a l s a v in g s b a n k s ; (iii) C e rt ifi c a te s o f d e p o s it p ro p e rl y se c ur e d a t a ll tim e s b y c o ll a te ra l se c u ri ty c o n s is tin g o f G o v e rn m e n t O b lig a tio n s ; (iv ) G o v e rn m e n t O b lig a tio n s ; (v ) B o n d s , d e b e n tur e s o r n o te s o r o th e r e v id e n c e o f in d e b te d n e s s is s u e d b y a n y o n e o r a c o m b in a tio n o f a n y o f th e fo ll o w in g fe d e ra l a g e n ci e s : th e E x p o rt -I m p o rt B a nk o f th e U n ite d S ta te s ; th e G o v e rn m e n t N a tio n a l M o rt g a g e A s s o ci a tio n ; th e F e d e ra l F in a n c in g B a n k ; th e F ar m e r 's H o m e A d m in is tra tio n ; th e F e d e r a l H o u s in g A d m in is tra tio n ; th e M a r itim e A d m in is tra tio n ; o r th e P u b lic H o u s in g A u th o ri ty ; (v i) R e p ur c h a s e a g r e e m e n ts c o ll a te ra li z e d b y G o v e rn m e n t O b lig a tio n s o r o b lig a tio n s d e s c ri b e d in cl a u s e (v ) o f th is d e fi n itio n w ith a n y r e g is te r e d b ro k e r /d e a le r su bje c t to S e c ur itie s In v e s to r s ' P ro te c tio n C o rp o ra tio n ju ri s d ic tio n , w h ic h h a s a n u n in s ur e d , u n s e c ur e d a n d u n g u a ra n te e d o b lig a tio n ra te d "Prime- I " or "A3" or better by Moody's and "A-I" or "A" or better by S&P Corporation, or any commercial bank with the above ratings, provided: (a) a master repurchase agreement or specific written repurchase agreement governs the transaction, (b) the securities are held free and clear of any lien by the Trustee or an independent third party acting solely as agent for the Trustee, and such third party is (1) a Federal Reserve Bank, (2) a bank which is a member of the Federal Deposit Insurance Corporation and which has combined capital, surplus and undivided profits of not less than $25,000,000, or (3) a bank approved in writing for such purpose by each Security Instrument Issuer which at the time has a Security Instrument outstanding on which there is no payment default, and the Trustee shall have received written confirmation from such third party that it holds such securities, free and clear of any lien, as agent for the Trustee, (c) a perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 CPR 306.1 et seq. or 31 CPR 350.0 et seq. (or similar successor provision of law) in such securities is created for the benefit of the Trustee, (d) the repurchase agreement has a term of 30 days or less, or the Trustee will value the collateral securities no less frequently than monthly and will liquidate the collateral securities if any deficiency in the required collateral percentage is not restored within two business day of such valuation, -11- Master Trust Indenture ( e) the repurchase agreement matures at least ten days ( or other appropriate liquidation period) prior to the date when liquidation is required, and (f) the fair market value of the securities in relation to the amount of the repurchase obligation is equal to at least 100%; (vii) Money market funds rated AAA by Fitch or Aaa by Moody's or AAA by S&P, including such funds from which the Trustee or its affiliates derive a fee for investment advisory or other services to the fund; (viii) Direct and general obligations of any state within the territorial United States of America, to the payment of the principal of and interest on which the full faith and credit of such state is pledged, provided that at the time of their purchase under the Indenture, such obligations are rated in either of the two highest rating categories by a Rating Agency; (ix) Commercial paper rated "first tier" by two Ratings Agencies, one of which must be Moody's or S&P, and having a remaining term to maturity of 270 days or less; (x) Refunded municipal obligations rated at the time of purchase in the highest rating category by a Rating Agency; and (xi) Investment agreements permitted by the State Money Management Act. "Issue Date" means (i) the first day of any calendar month, or (ii) any other date, established in a Supplemental Indenture with respect to a Series of Bonds. "Mayor" means the Mayor of the City, or in the event of his or her disability or absence, the Deputy Mayor or other person duly authorized to perform the duties of the Mayor. "Maximum Annual Debt Service" means the greatest amount of Aggregate Debt Service coming due in any Fiscal Year, less any adjustments thereto as provided in Section 2.03(d). "Moody's" means Moody's Investors Service Inc., its successors and assigns, and, if such corporation shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to another nationally recognized securities rating agency, if any, designated by the City. "NRMS/Rs" means, as of any date, all Nationally Recognized Municipal Securities Information Repositories then recognized by the Securities and Exchange Commission. "Opinion of Bond Counsel" means an Opinion of Counsel from counsel of nationally recognized standing in the field of law relating to municipal bonds. "Opinion of Counsel" means a written opinion of counsel selected by the City and satisfactory to the Trustee. Any Opinion of Counsel may be based, insofar as it relates to factual -12- Master Trust Indenture .. ' matters, on information with respect to which is in the possession of the City, upon a Written Certificate of the City, unless such counsel knows, or in the exercise of reasonable care should have known, that such Written Certificate is erroneous. "Outstanding" means with respect to the Bonds, as of any date of calculation (subject to the provisions of Section 8.04), all Bonds which have been duly authenticated and delivered by the Trustee except: (a) Bonds theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (b) Bonds for the payment or redemption of which cash funds or Investment Securities shall have theretofore been deposited with the Trustee (whether upon or prior to the maturity or redemption date of any such Bonds), provided that, if such Bonds are to be redeemed, notice of such redemption has been duly given pursuant to the provisions of the Indenture or arrangements satisfactory to the Trustee shall have been made therefor, or waiver of such notice satisfactory in form to the Trustee shall have been filed with the Trustee; (c) Bonds in exchange for or in lieu of which other Bonds have been authenticated or delivered pursuant to the terms of Section 3 .07 as permitted by the Indenture; and ( d) the Principal amount of any Bond issued pursuant to a Supplemental Indenture authorizing partial payment without cancellation if payment is noted on a payment record attached to such Bond provided that such payment has been made and duly noted on the payment record attached to such Bond. "Paired Obligations" means any Series (or portion thereof) of Bonds designated as Paired Obligations in the Supplemental Indenture authorizing the issuance or incurrence thereof, which are simultaneously issued or incurred and (i) the principal of which is of equal amount maturing and to be redeemed ( or cancelled after acquisition thereof) on the same dates and in the same amounts, and (ii) the interest rates which, taken together, result in an irrevocably fixed interest rate obligation of the City for the terms of such Bonds. "Paying Agent" means any bank or trust company designated as paying agent for the Bonds of any Series, and its successor or successors hereinafter appointed in the manner provided in Section 7 .02 of the Indenture. "Pledged Bonds" means any Bonds that have been pledged or in which any interest has otherwise been granted to a Security Instrument Issuer as collateral security for Security Instrument Repayment Obligations. "Principal" means (a) with respect to any Capital Appreciation Bond, the Accreted Amount thereof (the difference between the stated amount to be paid at maturity and the Accreted Amount being deemed unearned interest), except as used in connection with the authorization and issuance of Bonds and with the order of priority of payment of Bonds after an Event of Default, in which case "Principal" means the initial public offering price of a Capital Appreciation Bond (the difference between the Accreted Amount and the initial public offering price being deemed interest), and (b) with respect to any Current Interest Bond, the principal amount of such Bond payable at maturity. "Principal and Interest Fund" means the fund by that name established in Section 5.03. -13- Master Trust Indenture "Principal Installment" means, as of any date of calculation, (a) with respect to any Series of Bonds, so long as any Bonds thereof are Outstanding, (1) the Principal amount of Bonds of such Series due on a certain future date for which no Sinking Fund Installments have been established, or (2) the unsatisfied balance (determined as provided in the definition of "Sinking Fund Installment" in this Section) of any Sinking Fund Installment due on a certain future date for Bonds of such Series, plus the amount of the sinking fund redemption premiums, if any, which would be applicable upon redemption of such Bonds on such future date in a Principal amount equal to such unsatisfied balance of such Sinking Fund Installment, or (3) if such future dates coincide as to different Bonds of such Series, the sum of such Principal amount of Bonds and of such unsatisfied balance of such Sinking Fund Installment due on such future date plus such applicable redemption premiums, if any, and (b) with respect to any Repayment Obligations, the principal amount of such Repayment Obligations due on a certain future date. "Project" means the acquisition, construction, improvement or extension of improvements, facilities or property (or an interest therein) which the City is authorized by law to acquire, regardless of whether the City shall hold title thereto, if and to the extent that the same shall be designated by the City as a Project by a Supplemental Indenture. "Project Account" means the separate account for each Project in the Construction Fund pursuant to Section 5.04. "Put Bond" means any Bond which is part of a Series of Bonds which is subject to purchase by the City, its agent or a third party from the Holder of the Bond pursuant to provisions of the Supplemental Indenture authorizing the issuance of the Bond and designating it as a "Put Bond." "Rating Agency" means Fitch, Moody's or S&P. "Rating Category" means one or more of the generic rating categories of a Rating Agency, without regard to any refinement or gradation of such rating category or categories by a numerical modifier or otherwise. "Rebate Fund" means any fund established with respect to a Series of Bonds issued under the Indenture to provide for the payment of arbitrage rebate pursuant to the Code. "Record Date" means, with respect to any interest payment date for any Series of Bonds, the date specified as the Record Date in the Supplemental Indenture authorizing the issuance of such Series of Bonds. "Redemption Price" means, with respect to any Bond, the Principal thereof plus the applicable premium, if any, payable upon redemption thereof pursuant to any Supplemental Indenture. "Refunded Bonds" means all or a part of the Outstanding Bonds of one or more Series or all or part of any other bonds, notes or other borrowing or obligations of the City or its Municipal Building Authority to be refunded or refinanced by the issuance of Refunding Bonds. -14- Master Trust Indenture "Refunding Bonds" means all Bonds, whether issued in one or more Series, authenticated and delivered pursuant to Section 2.04, and any Bonds thereafter authenticated and delivered in lieu thereof or in substitution therefor pursuant to Article III or Section 4.04 or Section 8.06. "Remarketing Agent" means a remarketing agent appointed by the City pursuant to Section 7 .09 and its successors under the Indenture. "Repayment Obligations" means, collectively, all outstanding Security Instrument Repayment Obligations and Reserve Instrument Repayment Obligations. "Reserve Instrument" means an instrument or other device issued by a Reserve Instrument Issuer to satisfy all or any portion of the Debt Service Reserve Requirement, if any, for a Series of Bonds. The term "Reserve Instrument" includes, by way of example and not of limitation, letters of credit, bond insurance policies, standby bond purchase agreements, lines of credit and other security instruments and other devices; provided, however, that no such device or instrument shall be a "Reserve Instrument" for purposes of this Indenture unless specifically so designated in the Supplemental Indenture authorizing the use of such device or instrument. "Reserve Instrument Agreement" means any agreement entered into by the City and a Reserve Instrument Issuer pursuant to a Supplemental Indenture and providing for the issuance by such Reserve Instrument Issuer of a Reserve Instrument. "Reserve Instrument Costs" means, with respect to any Reserve Instrument, any fees, premiums, expenses and similar costs, other than Reserve Instrument Repayment Obligations, required to be paid to a Reserve Instrument Issuer pursuant to a Reserve Instrument Agreement or the Supplemental Indenture authorizing the use of such Reserve Instrument. Such Reserve Instrument Agreement or Supplemental Indenture shall specify any fees, premiums, expenses and costs constituting Reserve Instrument Costs. "Reserve Instrument Coverage" means, as of any date of calculation and with respect to any Reserve Instrument, the amount available to be paid under such Reserve Instrument into the related Series Subaccount in the Debt Service Reserve Account to satisfy all or any portion of the Debt Service Reserve Requirement. "Reserve Instrument Issuer" means any bank, savings and loan association, savings bank, thrift institution, credit union, insurance company, surety company or other institution issuing a Reserve Instrument. "Reserve Instrument Limit" means, as of any date of calculation and with respect to any Reserve Instrument, the maximum amount available to be paid under such Reserve Instrument into the related Series Subaccount in the Debt Service Reserve Account to satisfy all or any portion of the Debt Service Reserve Requirement, assuming for purposes of such calculation that the amount initially available under each Reserve Instrument has not been reduced or that the amount initially available under each Reserve Instrument has only been reduced as a result of the payment of Principal on the corresponding Series of Bonds. -15- Master Trust Indenture "Reserve Instrument Repayment Obligations" means, as of any date of calculation and with respect to any Reserve Instrument, any outstanding amounts payable by the City under the Reserve Instrument Agreement or the Supplemental Indenture authorizing the use of such Reserve Instrument to repay the Reserve Instrument Issuer for payments previously made by it pursuant to a Reserve Instrument. There shall not be included in the calculation of Reserve Instrument Repayment Obligations any Reserve Instrument Costs. Each Reserve Instrument Agreement or the Supplemental Indenture providing for the use of such Reserve Instrument shall specify any amounts payable under it which, when outstanding, shall constitute Reserve Instrument Repayment Obligations and shall specify the portions of any such amounts that are allocable as principal of and as interest on such Reserve Instrument Repayment Obligations. "Revenue Fund" means the fund by that name established in Section 5.03. "Revenues" means (a) 100% of the Local Sales and Use Tax revenues received by the City pursuant to Title 59, Chapter 12, Part 2, Utah Code Annotated 1953, as amended; (b) 100% of the Municipal Energy Sales and Use Tax revenues received by the City pursuant to Title 10, Chapter 1, Part 3, Utah Code Annotated 1953, as amended, and Salt Lake City Code Chapter 3.06; (c) 100% of the franchise fees for energy and utilities received by the City pursuant to Title 10, Chapter 1, Part 3, Utah Code Annotated 1953, as amended, and Salt Lake City Code Chapter 3.06; (d) 100% of the Municipal Telecommunications License Tax revenues received by the City pursuant to Title 10, Chapter 1, Part 4, Utah Code Annotated 1953, as amended, and Salt Lake City Code Chapter 3.10; (e) 100% of the franchise fees associated with public utilities received by the City pursuant to Title 10, Chapter 1, Part 3, Utah Code Annotated 1953, as amended, and Salt Lake City Code Section 17 .16.070; and (f) 100% of franchise fees associated with cable television received by the City pursuant to Salt Lake City Code Chapter 5.20. "S&P" means Standard & Poor's Credit Market Services, a division of The McGraw- Hill Companies, Inc., its successors and assigns, and, if such corporation shall no longer perform the functions of a securities rating agency, "S&P" shall be deemed to refer to another nationally recognized securities rating agency, if any, designated by the City. "Security Instrument" means an instrument or other device issued by a Security Instrument Issuer to pay, or to provide security or liquidity for, a Series of Bonds. The term "Security Instrument" includes, by way of example and not of limitation, letters of credit, bond insurance policies, standby bond purchase agreements, lines of credit and other security instruments and credit enhancement or liquidity devices; provided, however, that no such device or instrument shall be a "Security Instrument" for purposes of this Indenture unless specifically so designated in a Supplemental Indenture authorizing the use of such device or instrument. "Security Instrument Agreement" means any agreement entered into by the City and a Security Instrument Issuer pursuant to a Supplemental Indenture providing for the issuance by such Security Instrument Issuer of a Security Instrument. "Security Instrument Costs" means, with respect to any Security Instrument, all fees, premiums, expenses and similar costs, other than Security Instrument Repayment Obligations, required to be paid to a Security Instrument Issuer pursuant to a Security Instrument Agreement -16- Master Trust Indenture or the Supplemental Indenture authorizing the use of such Security Instrument. Such Security Instrument Agreement or Supplemental Indenture shall specify any fees, premiums, expenses and costs constituting Security Instrument Costs. "Security Instrument Issuer" means any bank, savings and loan association, savings bank, thrift institution, credit union, insurance company, surety company or other institution issuing a Security Instrument that is in full force and effect with respect to any Series of Bonds Outstanding. "Security Instrument Repayment Obligations" means, as of any date of calculation and with respect to any Security Instrument, any outstanding amounts payable by the City under the Security Instrument Agreement or the Supplemental Indenture authorizing the use of such Security Instrument to repay the Security Instrument Issuer for payments previously or concurrently made by the Security Instrument Issuer pursuant to a Security Instrument. There shall not be included in the calculation of the amount of Security Instrument Repayment Obligations any Security Instrument Costs. Each Security Instrument Agreement or the Supplemental Indenture providing for the use of such Security Instrument shall specify any amounts payable under it which, when outstanding, shall constitute Security Instrument Repayment Obligations and shall specify the portions of any such amounts that are allocable as principal of and as interest on such Security Instrument Repayment Obligations. "Series" means all of the Bonds designated as being of the same Series authenticated and delivered on original issuance in a simultaneous transaction, and any Bonds thereafter authenticated and delivered in lieu thereof or in substitution therefor pursuant to Article III or Section 4.04 or Section 8.06. "Series Subaccount" means the separate subaccount created for each Series of Bonds in the Bond Service Account pursuant to Section 5 .07 or in the Debt Service Reserve Account pursuant to Section 5.08, as appropriate. "Sinking Fund Installment" means an amount so designated which is established pursuant to Section 2.02(a)(8). The portion of any such Sinking Fund Installment remaining after the deduction of any such amounts credited pursuant to Sections 5.08(c) or 5.09 toward the same (or the original amount of any such Sinking Fund Installment if no such amounts shall have been credited toward the same) shall constitute the unsatisfied balance of such Sinking Fund Installment for the purpose of calculation of Sinking Fund Installments due on a future date. "Special Revenues" means any legally available moneys or income from an enterprise of the City or any other source available to the City which are pledged to the payment of one or more Series of the Bonds as provided in a Supplemental Indenture pursuant to Section 8.0l(b)(l 7). Such Supplemental Indenture shall (1) specifically identify the Special Revenues and pledge the same to the payment of one or more Series of Bonds, and (2) require such Special Revenues to be transferred and deposited into the Series Subaccount in the Bond Service Account and, if applicable, the Series Subaccount in the Debt Service Reserve Account for such Series of Bonds at the same time and in the same manner as provided in Section 5.06. -17- Master Trust Indenture "State" means the State of Utah. "State Money Management Act" means the State Money Management Act, Title 51, Chapter 7, Utah Code Annotated 1953, as amended, and any applicable regulations and rules promulgated thereunder. "Supplemental Indenture" means any indenture supplemental hereto or amendatory hereof that is in full force and effect and has been duly executed and delivered by the City and the Trustee in accordance with the provisions hereof. "Tax Certificate" means any agreement or certificate of the City that the City may execute in order to establish and maintain the excludability of interest on a Series of Bonds from gross income of the owners thereof for federal income tax purposes. "Transfer Agent" means, as the agent of the City, the Trustee and each and every additional agent appointed from time to time as the agent of the City pursuant to Section 7.10 for the transfer and authentication of Bonds for so long as such appointment shall continue in effect. "Treasurer's Investment Fund" means the fund held by the Treasurer of the State and commonly known as the Utah State Public Treasurer's Investment Fund. "Trust Estate" has the meaning specified in the Granting Clause. "Trustee" means the trustee identified in the preamble hereof and appointed by the City pursuant to Section 7.01, its successors and assigns, and any other corporation or association which may at any time be substituted in its place as provided herein. "Variable Rate Bonds" means, as of any date of calculation, Bonds the terms of which on such date of calculation are such that interest thereon for any future period of time is expressed to be calculated at a rate which is not susceptible of a precise determination. "Written Certificate of the City," "Written Request of the City" and "Written Statement of the City" means an instrument in writing signed on behalf of the City by an Authorized Officer thereof. Any such instrument and any supporting opinions or certificates may, but need not, be combined in a single instrument with any other instrument, opinion or certificate, and the two or more so combined shall be read and construed so as to form a single instrument. Any such instrument may be based, insofar as it relates to legal, accounting or engineering matters, upon the opinion or certificate of counsel, consultants, accountants or engineers, unless the Authorized Officer signing such Written Certificate or Request or Statement knows, or in the exercise of reasonable care should have known, that the opinion or certificate with respect to the matters upon which such Written Certificate or Request or Statement may be based, as aforesaid, is erroneous. The same Authorized Officer, or the same counsel, consultant, accountant or engineer, as the case may be, need not certify to all of the matters required to be certified under any provision of the Indenture, but different Authorized Officers, counsel, consultants, accountants or engineers may certify to different facts, respectively. Every Written Certificate or -18- Master Trust Indenture Request or Statement of the City, and every certificate or opinion of counsel, consultants, accountants or engineers provided for herein shall include: (a) a statement that the person making such certificate, request, statement or opinion has read the pertinent provisions of the Indenture to which such certificate, request, statement or opinion relates; (b) a brief statement as to the nature and scope of the examination or investigation upon which the certificate, request, statement or opinion is based; (c) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion with respect to the subject matter referred to in the instrument to which his signature is affixed;and ( d) with respect to any statement relating to compliance with any provision hereof, a statement whether or not, in the opinion of such person, such provision has been complied with. "Year" means any period of twelve consecutive months. Section 1.02. Construction. This Indenture, except where the context by clear implication herein otherwise requires, shall be construed as follows: (a) The terms "hereby," "hereof," "herein," "hereto," "hereunder", and any similar terms used in this Indenture shall refer to this Indenture in its entirety unless the context clearly indicates otherwise. (b) Words importing the singular number shall include the plural number and vice versa, and words importing persons shall include firms, associations, trusts, corporations or governments or agencies or political subdivisions thereof. ( c) Words in the masculine gender include the feminine and the neuter, and when the sense so indicates, words of the neuter gender refer to any gender. (d) Articles, sections, subsections, paragraphs and subparagraphs mentioned by number, letter, or otherwise, correspond to the respective articles, sections, subsections, paragraphs and subparagraphs hereof so numbered or otherwise so designated. (e) The titles or leadlines applied to articles, sections and subsections herein are inserted only as a matter of convenience and ease in reference and in no way define, limit or describe the scope or intent of any provisions of this Indenture. Section 1.03. Authority for the Indenture. The Indenture is executed and delivered pursuant to the provisions of the Act. -19- Master Trust Indenture Section 1.04. Special Obligations. The Bonds and the Repayment Obligations are special obligations of the City payable from and secured by the Revenues, moneys, securities and funds pledged therefor. ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS Section 2.01. Authorization of Bonds. Bonds designated as "Sales and Excise Tax Revenue Bonds" (or "Sales and Excise Tax Revenue Notes" or "Sales and Excise Tax Revenue Obligations," as appropriate) are hereby authorized to be issued by the City under the Indenture. The maximum Principal amount of the Bonds which may be issued hereunder is not limited; however, the City reserves the right to limit or restrict the aggregate Principal amount of the Bonds which may at any time be issued or Outstanding hereunder. Bonds may be issued in such Series as from time to time shall be established and authorized by the City. The Bonds may be issued in one or more Series pursuant to one or more Supplemental Indentures. The designation of the Bonds shall include, in addition to the name "Sales and Excise Tax Revenue Bonds" (or "Sales and Excise Tax Revenue Notes" or "Sales and Excise Tax Revenue Obligations," as appropriate), such further appropriate particular designation added to or incorporated in such title for the Bonds of any particular Series as the City may determine. Each Bond shall bear upon its face the designation so determined for the Series to which it belongs. Each Bond shall recite in substance that it, including the interest thereon, is payable solely from the Revenues and other funds of the City pledged for the payment thereof and that it does not constitute a debt of the City within the meaning of any constitutional or statutory limitations or provisions. Section 2.02. General Provisions for the Issuance of Bonds. (a) Whenever the City shall determine to issue any Series of Bonds, the City shall execute and deliver a Supplemental Indenture which shall specify the following: (1) The purpose for which such Series of Bonds is to be issued, which shall be for a purpose set forth in Section 2.03 or Section 2.04, or a combination of such purposes; (2) The authorized Principal amount and Series designation of such Series of Bonds; (3) The Issue Date and the maturity date or dates of the Bonds of such Series; (4) The interest rate or rates (including a zero interest rate) of the Bonds of such Series, or the manner of determining such rate or rates, provided that the Supplemental Indenture shall specify the maximum rate that the Bonds of such Series may bear if such Bonds are Variable Rate Bonds, and the interest payment dates of the Bonds of such Series; (5) The authorized denominations of the Bonds of such Series; -20- Master Trust Indenture (6) Any Paying Agents and the places of payment of the Principal and Redemption Prices, if any, of, and interest on, the Bonds of such Series, and, if other than the Trustee, any Transfer Agents and the places where Bonds may be registered for transfer or exchange; (7) The Redemption Prices, if any, and subject to Article IV, the redemption terms, if any, for the Bonds of such Series; (8) The amount and due date of each Sinking Fund Installment, if any, for the Bonds of such Series; (9) The Record Date for the Bonds of such Series; ( 10) Any Debt Service Reserve Requirement for such Series of Bonds pursuant to Section 5.08(a) and the amount, if any, to be deposited from the proceeds of such Series of Bonds into any Series Subaccount in the Debt Service Reserve Account established for such Series of Bonds; (11) The amount, if any, to be deposited from any legally available source into the Construction Fund; ( 12) The forms of the Bonds of such Series; (13) Unless otherwise identified in the Security Instrument Agreement or Reserve Instrument Agreement, as applicable, and to the extent applicable, the obligations payable under any Security Instrument Agreement or Reserve Instrument Agreement entered into in connection with the issuance of the Bonds of such Series which, when outstanding, shall constitute Security Instrument Repayment Obligations or Reserve Instrument Repayment Obligations, as the case may be, and which portions of such Security Instrument Repayment Obligations or Reserve Instrument Repayment Obligations, as the case may be, are to be attributed to principal of and to interest on such Repayment Obligations; and (14) Any further covenants by the City required by any Security Instrument Issuer, Reserve Instrument Issuer or purchaser of Bonds deemed necessary or desirable by the City in connection with the sale of such Series of Bonds. (b) The Bonds of any Series shall be executed by the City for issuance under the Indenture and delivered to the Trustee and thereupon shall be authenticated by the Trustee and by it delivered to the City or upon the Written Request of the City but only upon receipt by the Trustee of the following documents or moneys or securities, all of such documents dated or certified, as the case may be, as of the date of such delivery by the Trustee (unless the Trustee shall accept any of such documents bearing a prior date): ( 1) An executed copy of the Supplemental Indenture relating to the issuance of the Bonds of such Series; -21- Master Trust Indenture Series; (2) A Written Request of the City as to the delivery of the Bonds of such (3) An Opinion of Bond Counsel to the effect that (i) the City has the power under the Act, as amended to the date of such Opinion, to issue the Bonds of such Series and to execute and deliver the Indenture, and the Indenture has been duly and lawfully executed and delivered by the City, is in full force and effect and is valid and binding upon the City and enforceable in accordance with its terms, and no other authorization for the Indenture is required; (ii) the Indenture creates the valid pledge which it purports to create of the Revenues, Funds, moneys, securities and funds held or set aside under the Indenture, subject to the application thereof to the purposes and on the conditions permitted by the Indenture; (iii) the Bonds of such Series are valid and binding special obligations of the City, enforceable in accordance with their terms and the terms of the Indenture and are entitled to the benefits of the Indenture and the Act, as amended to the date of such Opinion; and (iv) the Bonds of such Series have been duly and validly authorized and issued in accordance with law and the Indenture; provided that such Opinion of Counsel may contain limitations acceptable to the purchaser of such Series of Bonds, including limitations as to enforcement by bankruptcy or similar laws, equity principles, sovereign police powers, and federal powers; (4) A Written Certificate of the City setting forth (A) the principal amount of the Bonds, (B) the Debt Service for each Fiscal Year of the Bonds of such Series and (C) the Aggregate Debt Service for all Outstanding Bonds, including such Series of Bonds being issued, for each Fiscal Year; (5) A Written Certificate of the City demonstrating compliance with the requirements of Section 11-14-17 .5( 4) of the Utah Municipal Bond Act; provided, however, that the requirements of this subparagraph (5) shall at all times be deemed to conform to, and shall without further action by the City be amended or supplemented so as to conform to, any applicable debt service coverage requirements imposed by the Utah Municipal Bond Act upon bonds payable from and secured by a pledge of tax revenues under the Local Sales and Use Tax Act and provided further that if said Section 11-14- 17 .5( 4) shall be repealed without replacement, it shall not be necessary for the City to comply with this subparagraph (5); (6) The amounts, if any, necessary for deposit into the Construction Fund, the Revenue Fund, and any Series Subaccount in the Debt Service Reserve Account for such Series of Bonds; and (7) Such further documents, moneys and secunties as are required by the provisions of Section 2.03 or Section 2.04, or of any Supplemental Indenture. (c) The City may authorize by Supplemental Indenture the delivery to the Trustee of one or more Security Instruments with respect to any Series of Bonds and the execution and delivery of any Security Instrument Agreements deemed necessary in connection therewith. -22- Master Trust Indenture (d) The City may authorize by Supplemental Indenture the issuance and delivery to the Trustee of one or more Reserve Instruments and the execution and delivery of any Reserve Instrument Agreements deemed necessary in connection therewith. (e) The City may authorize by Supplemental Indenture the issuance of Put Bonds; provided that any obligation of the City to pay the purchase price of any such Put Bonds shall not be secured by a pledge of Revenues on a parity with the pledge contained in Section 5.01. The City may provide for the appointment of such Remarketing Agents, indexing agents or other agents as the City may determine. (f) The City may authorize by Supplemental Indenture such other provisions relating to a Series of Bonds as are permitted by law and are consistent with the provisions of the Indenture. (g) After the original issuance of the Bonds of any Series, no Bonds of such Series shall be issued except in lieu of or in substitution for other Bonds of such Series pursuant to Article III, Section 4.04 or Section 8.06. (h) Notwithstanding any provision of this Section 2.02 to the contrary, a Supplemental Indenture may provide for the delivery of a Series of Bonds, issued in the form of a single Bond, in installments to be noted by the Trustee in a delivery schedule on the reverse side thereof or attached thereto. Section 2.03. Special Provisions for the Issuance of Construction Bonds. (a) One or more Series of Construction Bonds may be authenticated and delivered upon original issuance from time to time in such principal amount for each such Series as may be determined by the City for the purpose of paying or providing for the payment of all or a portion of the Cost of Construction of a Project. Each such Series shall be in such principal amount which, when taken together with funds previously used or to be provided by the City for such Project, will provide the City with sufficient funds to pay the estimated Cost of Construction of such Project, as set forth in the Written Certificate of the City furnished pursuant to Section 2.03(c). (b) Each Supplemental Indenture authorizing the issuance of a Series of Construction Bonds: ( 1) shall specify the Project for which the proceeds of such Series of Construction Bonds will be applied; and (2) may provide for the deposit of a specified amount of money from the proceeds of the sale of such Series of Construction Bonds or from other legally available sources into a Project Account in the Construction Fund to pay when due (together with any investment earnings available for such purpose) all or a portion of the interest on such Series of Construction Bonds accrued and to accrue to the Estimated Completion Date, plus interest to accrue on such Series of Construction Bonds after the Estimated -23- Master Trust Indenture Completion Date for up to one Year ( or such different period as may then be permitted by law). ( c) Each Series of Construction Bonds shall be authenticated and delivered by the Trustee only upon receipt by the Trustee (in addition to the documents required by Section 2.02) of a Written Certificate of the City which shall: ( 1) set forth the then Estimated Completion Date and the then estimated Cost of Construction of the Project being financed by such Series of Bonds; (2) state that, upon the authentication and delivery of the Bonds of such Series, no event will have occurred which, with the passage of time or the giving of notice, or both, would give rise to an Event of Default under the Indenture; (3) set forth, for any Year within the twenty-four (24) calendar months next preceding the authentication and delivery of such Series of Construction Bonds, the Revenues for such period; ( 4) set forth the Maximum Annual Debt Service on all Outstanding Bonds upon the issuance of the proposed Series of Construction Bonds, together with any adjustments to the Maximum Annual Debt Service permitted by Section 2.03(d); and (5) demonstrate that the Revenues set forth in (3) above are equal to or greater than 200% of the Maximum Annual Debt Service set forth in (4) above. (d) In determining the Maximum Annual Debt Service on all Outstanding Bonds, the City may reduce the Debt Service on any Series of Bonds for any Fiscal Year by ( 1) the amount of capitalized interest available to pay the interest on such Bonds in such Fiscal Year pursuant to Section 2.03(b)(2), and (2) the Special Revenues pledged to pay such Debt Service in an amount equal to either (i) the average annual amount of the Special Revenues for the most recent three (3) Fiscal Years or (ii) 75% of the Special Revenues for the most recent Fiscal Year, each as shown in, or calculated on the basis of the information contained in, the applicable audited financial statements of the City filed with the Trustee as provided in Section 6.06(b), but not exceeding the Debt Service on such Series of Bonds in any Fiscal Year. If Special Revenues are to be used in connection with the determination of the Maximum Annual Debt Service, then the City shall deliver to the Trustee (A) confirmation from each Rating Agency then maintaining a rating on any Outstanding Bonds that the pledge of Special Revenues will not result in the reduction or withdrawal of any rating on any Outstanding Bonds, and (B) an Opinion of Counsel of nationally recognized standing in the field of law relating to municipal bonds to the effect that such pledge of Special Revenues will not adversely affect the tax-exempt status of any Bonds then Outstanding. (e) The proceeds, including accrued interest, of the Construction Bonds of each Series shall be deposited simultaneously with the delivery of such Bonds into the Construction Fund and, to the extent permitted by law and the provisions of the Indenture, in any other Funds or Accounts or such other funds or accounts as may be established by the Supplemental Indenture -24- Master Trust Indenture authorizing the issuance of such Series of Construction Bonds in such amounts as may be provided in such Supplemental Indenture; and (f) There may also be deposited from any legally available source, to the extent permitted by law and the provisions of the Indenture, in the Funds and Accounts or such other funds or accounts as may be established by the Supplemental Indenture, such amounts, if any, as may be provided in the Supplemental Indenture authorizing the issuance of such Series of Construction Bonds. Section 2.04. Special Provisions for the Issuance of Refunding Bonds. (a) One or more Series of Refunding Bonds may be issued in such principal amount which, when taken together with other legally available funds, will provide the City with funds which will be sufficient to accomplish the refunding of the Refunded Bonds including the payment of all expenses and the establishment of any reserves in connection with such refunding. (b) Each Supplemental Indenture authorizing the issuance of a Series of Refunding Bonds shall specify the Refunded Bonds to be refunded. ( c) Each Series of Refunding Bonds shall be authenticated and delivered by the Trustee only upon receipt by the Trustee (in addition to the documents required by Section 2.02) of the following documents or moneys or securities ( or if such documents or moneys or securities are to be delivered to the trustee or debtor for the other borrowings, to such trustee or debtor, with a copy or other evidence of such delivery to the Trustee): (1) Either (A) for Refunded Bonds originally issued pursuant to the provisions of the Indenture, a Written Certificate of the City which shall: (i) set forth the Aggregate Debt Service on the Refunded Bonds for each Fiscal Year to and including the scheduled final maturity date thereof, (ii) set forth the Aggregate Debt Service on the Refunding Bonds for each Fiscal Year to and including the scheduled final maturity date thereof, and (iii) demonstrate that the Aggregate Debt Service on the Refunding Bonds for each such Fiscal Year set forth pursuant to clause (ii) is no greater than one hundred percent ( 100%) of the Aggregate Debt Service on the Refunded Bonds for each such Fiscal Year set forth pursuant to clause (i), and containing such additional statements as may be -25- Master Trust Indenture reasonably necessary to show compliance with the requirements of the Indenture; or (B) A Written Certificate of the City which shall: (i) set forth, for any Year within the twenty-four (24) calendar months next preceding the authentication and delivery of such Series of Refunding Bonds, the Revenues for such period; (ii) set forth the Maximum Annual Debt Service upon the issuance of the proposed Series of Refunding Bonds, together with any adjustments to the Maximum Annual Debt Service permitted by Section 2.03(d); and (iii) demonstrate that the Revenues set forth in (i) above are equal to or greater than 200% of the Maximum Annual Debt Service set forth in (ii) above. The provisions of this paragraph (c)(l) shall not apply to the first Series of Bonds issued hereunder. (2) Irrevocable instructions to the Trustee (or such trustee or lender or its designee, as appropriate), satisfactory to it, to give due notice of redemption of all the Refunded Bonds on the redemption date or dates specified in such instructions; (3) If the Refunded Bonds are not by their terms subject to redemption within the next succeeding ninety (90) days, irrevocable instructions to the Trustee (or such trustee or lender or its designee, as appropriate), satisfactory to it, to mail the notice provided for in Section 1 l.0l(b) (or any similar provision for other borrowings, as appropriate) to the holders of the Refunded Bonds; (4) Either (A) moneys in an amount sufficient to effect payment at the applicable redemption price of the Refunded Bonds, together with accrued interest to the redemption date, which moneys shall be held by the Trustee or any one or more of the Paying Agents (or such trustee or lender or its designee, as appropriate) in a separate account irrevocably in trust for and assigned to the respective holders of the Refunded Bonds, or (B) Government Obligations (or similar investments as provided for in the documents relating to other borrowings, as appropriate) in such principal amounts, of such maturities, bearing such interest, and otherwise having such terms and qualifications and any moneys, as shall be necessary to comply with the provisions of Section 11.0l(b) (or any similar provision for other borrowings, as appropriate), which Government Obligations and moneys shall be held in trust and used only as provided in such Section. -26- Master Trust Indenture (d) A Series of Refunding Bonds may be combined with a Series of Construction Bonds. Section 2.05. Provisions Regarding Bonds Secured by a Security Instrument. (a) The City may include such provisions in a Supplemental Indenture authorizing the issuance of a Series of Bonds secured by a Security Instrument as the City deems appropriate, including: ( 1) So long as the Security Instrument is in full force and effect, and payment on the Security Instrument is not in default, (A) the Security Instrument Issuer shall be deemed to be the Holder of the Outstanding Bonds of such Series when the approval, consent or action of the Bondholders for such Series of Bonds is required or may be exercised under the Indenture and following an Event of Default and (B) the Indenture may not be amended in any manner which affects the rights of such Security Instrument Issuer without its prior written consent. (2) In the event that the Principal and Redemption Price, if applicable, and interest due on any Series of Bonds Outstanding shall be paid under the provisions of a Security Instrument, all covenants, agreements and other obligations of the City to the Bondholders of such Series of Bonds shall continue to exist and such Security Instrument Issuer shall be subrogated to the rights of such Bondholders in accordance with the terms of such Security Instrument. (b) In addition, such Supplemental Indenture may establish such provisions as are necessary to provide relevant information to the Security Instrument Issuer and to provide a mechanism for paying Principal Installments and interest on such Series of Bonds from the Security Instrument. ARTICLE Ill TERMS AND PROVISIONS OF BONDS Section 3.01. Terms of Bonds. (a) The Principal and Redemption Price of the Bonds shall be payable in lawful money of the United States of America at the principal corporate trust operations office of the Trustee, or at the principal office of any Paying Agent, or otherwise as provided in a Supplemental Indenture with respect to any Series of Bonds. Unless otherwise provided in a Supplemental Indenture with respect to a Series of Bonds, payment of interest on any Bond shall be made to the person who is the registered owner thereof as of the close of business on the Record Date and shall be paid by check mailed to the registered owner thereof at the address of such registered owner as it appears on the registration books of the City maintained by the Trustee or at such other address as is furnished to the Trustee in writing by such registered owner prior to the Record Date. -27- Master Trust Indenture (b) Unless otherwise provided in a Supplemental Indenture authorizing a Series of Bonds, the Bonds of any Series shall be issued in fully registered form without coupons. Each Series of Bonds shall be in such denominations as may be authorized by the Supplemental Indenture authorizing the issuance of the Bonds of such Series. A Supplemental Indenture may provide for the delivery of a Series of Bonds, issued in the form of a single fully registered Bond, in installments to be noted by the Trustee in a delivery schedule attached to such Bond. Anything in this Indenture to the contrary notwithstanding, a Supplemental Indenture may provide that Bonds issued in such single fully registered form may be submitted to the Trustee for notation of payment of installments and for notation of transfer, without requiring cancellation of such single fully registered Bond. Such Supplemental Indenture may provide for transfer of such Bonds to a new Holder by delivery after such notation, and without cancellation. (c) The Bonds shall be dated as of the Issue Date specified in the Supplemental Indenture pursuant to which the Series of Bonds is issued. Unless otherwise provided in a Supplemental Indenture authorizing a Series of Bonds, each fully-registered Bond of any Series shall bear interest from the interest payment date next preceding the date of registration and authentication thereof unless it is registered as of an interest payment date, in which event it shall bear interest from the date thereof, or unless it is registered prior to the first interest payment date, in which event it shall bear interest from its date, or unless, as shown by the records of the Trustee, interest on the Bonds of such Series shall be in default, in which event it shall bear interest from the date to which interest has been paid in full. (d) The Bonds of each Series may contain or have endorsed thereon such provisions, specifications and descriptive words not inconsistent with the provisions of the Indenture as may be necessary or desirable to comply with the Act, custom, the rules of any securities exchange or commission or brokerage board, or otherwise, as may be determined by the City prior to the authentication and delivery thereof. (e) From and after the issuance of the Bonds of any Series, the findings and determinations of the Council respecting that Series shall be conclusive evidence of the existence of the facts so found and determined in any action or proceeding in any court in which the validity of such Bonds is at issue, and no bona fide purchaser of any such Bonds shall be required to see to the existence of any fact or to the performance of any condition or to the taking of any proceeding required prior to such issuance, or to the application of the purchase price paid for such Bonds. The validity of the issuance of any Series of Bonds shall not be dependent on or affected in any way by (1) any proceedings taken by the City for the planning, acquisition or construction of a Project, or (2) any contracts made by the City in connection therewith, or (3) the failure to complete the planning, acquisition or construction of a Project. The recital contained in the Bonds that the same are issued pursuant to the Act shall be conclusive evidence of their validity and of the regularity of their issuance and all the Bonds shall be incontestable from and after their issuance. Bonds shall be deemed to be issued, within the meaning of the Indenture, whenever the definitive Bonds, or any temporary Bonds exchangeable therefor, have been delivered to the purchasers thereof, and the purchase price thereof received, or in the case of Bonds to be refunded through exchange, whenever such exchange has been made. -28- Master Trust Indenture (t) Subject to any limitations contained in a Supplemental Indenture, the City may provide a Security Instrument for any Series of Bonds ( or may substitute one Security Instrument for another) if the City has provided to the Trustee written evidence satisfactory to the Trustee from each Rating Agency then having a rating in effect for any Series of Bonds then Outstanding to the effect that the Rating Agency has reviewed the proposed Security Instrument and that the use of such Security Instrument (or the substitution of one Security Instrument for another, as appropriate) will not, by itselfresult in a reduction or withdrawal of such Rating Agency's rating of such Series of Bonds. Section 3.02. Execution of Bonds; Limited Obligations. (a) The Bonds shall be signed on behalf of the City by the manual or facsimile signature of its Mayor and attested and countersigned by the manual or facsimile signature of its City Recorder, and its seal shall be thereunto affixed by its City Recorder, which may be by a facsimile of the City's seal imprinted upon the Bonds. The Bonds shall then be delivered to the Trustee for manual authentication by it or by any Transfer Agent. In case any officer who shall have signed or attested any of the Bonds shall cease to be such officer before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee or by any Transfer Agent or issued by the City, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issuance, shall be as binding upon the City as though such person who signed or attested the same had continued to be such officer of the City. Also, any Bond may be signed, countersigned or attested on behalf of the City by any person who on the actual date of the execution of such Bond shall be the proper officer of the City, although on the nominal date of such Bond any such person shall not have been such officer of the City. (b) Only such of the Bonds as shall bear thereon a certificate of authentication, executed by the Trustee or by any Transfer Agent, shall be valid or obligatory for any purpose or entitled to the benefits of the Indenture, and such certificate of the Trustee or of any Transfer Agent shall be conclusive evidence that the Bonds so authenticated have been duly authenticated and delivered under, and are entitled to the benefits of, the Indenture and that the Holder thereof is entitled to the benefits of the Indenture. (c) The Bonds, together with interest thereon, and all Repayment Obligations shall be limited obligations of the City payable solely from the Revenues (except to the extent paid out of moneys attributable to the Bond proceeds or other funds created hereunder or the income from the temporary investment thereat) as provided herein. The issuance of the Bonds and delivery of any Security Instrument Agreement or Reserve Instrument Agreement shall not, directly, indirectly or contingently, obligate the City or any agency, instrumentality or political subdivision thereof to levy any form of ad valorem taxation therefore. ( d) The provisions of this Section relating to the execution of Bonds may be changed as they apply to the Bonds of any Series by the Supplemental Indenture authorizing such Series of Bonds. Section 3.03. Transfer of Bonds. Unless otherwise provided in a Supplemental Indenture authorizing a Series of Bonds: -29- Master Trust Indenture (a) Any Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 3.06, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation or, if applicable, notation of the new Holder together with the signature of the Trustee or any applicable Transfer Agent on the back of such Bond or on a form of record attached to such Bond for such purpose, accompanied by delivery of a written instrument of transfer in a form approved by the Trustee, duly executed. No transfer will be effective until entered upon the books required to be kept pursuant to the provisions of Section 3.06. (b) Whenever any Bond shall be surrendered for transfer, the Trustee or any Transfer Agent shall authenticate and deliver a new fully registered Bond or Bonds duly executed by the City or, if applicable, shall deliver the same Bond, duly annotated with the new Holder and signed by the Trustee or any applicable Transfer Agent on the back of such Bond or on a form of record attached to such Bond for such purpose, for like aggregate principal amount. The Trustee or any Transfer Agent shall require the payment by the Bondholder requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer. ( c) The City, the Trustee and any Transfer Agent shall not be required (1) to issue, register the transfer of or exchange any Bond during a period beginning at the opening of business 15 days before the date of the mailing of a notice of redemption of Bonds selected for redemption under Article IV and ending at the close of business on the day of such mailing, or (2) to register the transfer of or exchange any Bond so selected for redemption in whole or in part, except the unredeemed portion of Bonds being redeemed in part. ( d) The City, the Trustee and any Transfer Agent may treat and consider the person in whose name each Bond is registered upon the books required to be kept pursuant to Section 3 .06 as the Holder and absolute owner of such Bond for the purpose of payment of Principal of and interest on such Bond and for all other purposes whatsoever. Section 3.04. Exchange of Bonds. Fully-registered Bonds may be exchanged at the principal corporate trust operations office of the Trustee or of any Transfer Agent for a like aggregate Principal amount of fully-registered Bonds of the same Series and maturity of authorized denominations. The Trustee or any Transfer Agent shall require the payment by the Bondholder requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. Except as otherwise provided in a Supplemental Indenture authorizing a Series of Bonds, no such exchange shall be required to be made subsequent to the Record Date. Section 3.05. Form of Bonds. The Bonds of each Series of Bonds shall be in substantially the forms thereof set forth in the Supplemental Indenture authorizing the issuance of such Bonds, with such omissions, insertions and variations not inconsistent with the terms hereof as may be necessary, desirable, authorized and permitted hereby. -30- Master Trust Indenture Section 3.06. Bond Registration Books. The Trustee will keep or cause to be kept, at its principal corporate trust operations office, sufficient books for the registration and transfer of Bonds, which shall at all times be open to inspection by the City; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, Bonds as hereinbefore provided. Section 3.07. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the City, at the expense of the Holder of such Bond, shall execute, and the Trustee or any Transfer Agent shall, at the expense of the Holder of such Bond, thereupon authenticate and deliver, a new Bond of like tenor in exchange and substitution for the Bond so mutilated, but · only upon surrender to the Trustee or any Transfer Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee or to any Transfer Agent shall be cancelled by it and delivered to, or upon the order of, the City. If any Bond issued hereunder shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the City and the Trustee and, if such evidence be satisfactory to both and indemnity as required by the Act or State law and satisfactory to the Trustee shall be given, the City, at the expense of the Holder of such Bond, shall execute, and the Trustee shall, at the expense of the Holder of such Bond, thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen ( or if any such Bond shall have matured or shall be about to mature, instead of issuing a substitute Bond the Trustee may pay the same without surrender thereof). Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an additional contractual obligation of the City, and shall be equally and proportionately entitled to the benefits of the Indenture with all other Bonds of the same Series secured by the Indenture. Neither the City nor the Trustee shall be required to treat both the original Bond and any duplicate Bond as being Outstanding for the purpose of determining the Principal amount of Bonds which may be issued hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and duplicate Bond shall be treated as one and the same. ARTICLE IV REDEMPTION OF BONDS Section 4.01. Privilege of Redemption of Bonds. Any Series of Bonds subject to redemption prior to maturity pursuant to a Supplemental Indenture shall be redeemable, upon notice being given, at such times, at such Redemption Prices and upon such terms as provided in this Article and (in addition to and consistent with the terms contained in this Article) in the Supplemental Indenture authorizing the issuance of the Bonds of such Series. Section 4.02. Selection of Bonds for Redemption. Except as otherwise provided in a Supplemental Indenture: (a) If less than all of the Bonds of any Series are called for redemption and if the Bonds of such Series shall mature on more than one date, the Bonds of such Series shall be redeemed from the Outstanding Bonds of such Series in inverse order of maturities. -31- Master Trust Indenture (b) If less than all of the Bonds of any Series maturing on any single date are called for redemption, the Trustee shall select the Bonds to be redeemed, from the Outstanding Bonds of such Series maturing on that date not previously called for redemption, in such manner as in the Trustee's sole discretion it shall deem appropriate and fair; provided, however, that subject to other applicable provisions of the Indenture or of any Supplemental Indenture, the portion of any Bond to be redeemed shall be in a Principal amount equal to a denomination in which Bonds of such Series are authorized to be issued. In selecting Bonds for redemption the Trustee shall treat each Bond as representing the number of Bonds which is obtained by dividing the Principal amount of each Bond by the minimum denomination in which such Series of Bonds is authorized to be issued. If part but not all of a Bond shall be selected for redemption, the Holder thereof or his attorney or legal representative shall present and surrender such Bond to the Trustee for payment of the Principal amount thereof so called for redemption and the redemption premium, if any, on such Principal amount. The City shall execute and the Trustee or any Transfer Agent shall authenticate and deliver to or upon the order of such Holder or his legal representative, without charge therefor, a Bond or Bonds of the same maturity and bearing interest at the same rate as the Bond so surrendered for the unredeemed portion of the surrendered Bond. The Trustee shall promptly notify the City in writing of the Bonds or portions thereof selected for redemption. Section 4.03. Notice of Redemption. Except as otherwise provided in a Supplemental Indenture authorizing a Series of Bonds: (a) Notice of redemption shall be given by first class mail, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, to the registered owner of such Bond, at his address as it appears on the bond registration books of the Trustee or at such address as he may have filed with the Trustee for that purpose, but neither failure to mail any such notice nor any defect in any notice so mailed shall affect the sufficiency of the proceedings for the redemption of any of the Bonds. Each notice of redemption shall state the redemption date, the place of redemption, the source of the funds to be used for such redemption, the Principal amount and, if less than all of the Bonds of any like Series and maturity are to be redeemed, the distinctive numbers of the Bonds to be redeemed, and shall also state that the interest on the Bonds or portions thereof in such notice designated for redemption shall cease to accrue from and after such redemption date and that on said date there will become due and payable on each of said Bonds the Redemption Price thereof and interest accrued thereon to the redemption date. (b) Notice of redemption shall be given by the Trustee for and on behalf and at the expense of the City, at the Written Request of the City given to the Trustee at least 60 days prior to the date fixed for redemption. The City shall deposit with, or otherwise make available to, the Trustee the money required for payment of the Redemption Price of and the accrued interest to the redemption date on all Bonds then to be called for redemption at least two Business Days before the date fixed for such redemption. ( c) If at the time of mailing of notice of redemption there shall not have been deposited with the Trustee moneys sufficient to redeem all Bonds called for redemption, -32- Master Trust Indenture such notice may state that it is conditional upon the deposit of moneys sufficient to redeem all Bonds with the Trustee not later than the redemption date, and such notice shall be of no effect unless such moneys are so deposited. If the notice contains such condition and if moneys sufficient to redeem all Bonds called for redemption have not been deposited with the Trustee by the redemption date, the notice of redemption shall be rescinded, none of the Bonds described in such notice shall be redeemed, the Redemption Price shall not be due and payable under the Indenture, and the Trustee shall, as soon as possible after the redemption date, give notice for and on behalf and at the expense of the City, by first class mail, postage prepaid, to the registered owners of the Bonds called for redemption of the rescission of such notice of redemption. Section 4.04. Partial Redemption of Bonds; Disposition of Redeemed Bonds. Except as otherwise provided in a Supplemental Indenture authorizing a Series of Bonds: (a) Upon surrender of any Bond redeemed in part only, the City shall duly execute and the Trustee or any Transfer Agent shall authenticate and deliver to the registered owner thereof, at the expense of the City, a new Bond or Bonds of the same Series and maturity and of authorized denominations equal in aggregate Principal amount to the unredeemed portion of the Bond surrendered. (b) All Bonds redeemed in whole or in part pursuant to the provisions of this Article shall be cancelled by the Trustee or any Transfer Agent and shall thereafter be delivered to, or upon the order of, the City. Section 4.05. Effect of Redemption. Except as otherwise provided in a Supplemental Indenture authorizing a Series of Bonds, if notice of redemption has been duly given as aforesaid, and moneys for payment of the Redemption Price, together with interest to the redemption date on the Bonds so called for redemption, are held by the Trustee, then such Bonds shall, on the redemption date designated in such notice, become due and payable at the Redemption Price specified in such notice and interest accrued thereon to the redemption date; and from and after the date so designated interest on the Bonds so called for redemption shall cease to accrue. ARTICLEV PLEDGE OF REVENUES; ESTABLISHMENT OF FUNDS AND APPLICATION THEREOF Section 5.01. The Pledge Effected by the Indenture. The Bonds and the Repayment Obligations are special obligations of the City payable from and secured by the Revenues, moneys, securities and funds pledged therefor. There are hereby pledged for the payment of Principal, Redemption Price and interest on the Bonds and of Repayment Obligations in accordance with their terms and the provisions of the Indenture, subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture (1) the proceeds of sale of the Bonds, (2) the Revenues, and (3) the Construction Fund, Principal and Interest Fund, Revenue Fund and any other Funds hereafter -33- Master Trust Indenture established or confirmed by the Indenture ( except for any Rebate Fund) and pledged for the payment of Principal, Redemption Price and interest on the Bonds and of Repayment Obligations, including the investments, if any, thereof, subject to any required rebate of all or a portion of the earnings on such investments to the United States of America pursuant to the requirements of Section 148(f) of the Code. Section 5.02. Perfection of Security Interest. (a) This Indenture creates a valid and binding pledge and assignment of and security interest in all of the Revenues pledged under this Indenture in favor of the Trustee as security for payment of the Bonds, enforceable by the Trustee in accordance with the terms thereof. (b) Under the laws of the State, such pledge and assignment and security interest is automatically perfected by Section 11-14-28, Utah Code Annotated 1953, as amended, and hereafter has priority against all parties having claims of any kind in tort, contract, or otherwise against the City, regardless of whether or not the parties have notice of the lien created hereunder. Section 5.03. Establishment of Funds. (a) The following Funds are hereby established: (1) Revenue Fund, to be held by the City; (2) Construction Fund, to be held by the Trustee, in which the Trustee shall establish a Project Account for each Project; and (3) Principal and Interest Fund, to be held by the Trustee, consisting of (A) a Bond Service Account, in which the Trustee shall establish a separate Series Subaccount for each Series of Bonds, and (B) a Debt Service Reserve Account, in which the Trustee may establish a separate Series Subaccount for one or more Series of Bonds. (c) The City may, by Supplemental Indenture, establish one or more additional Funds, accounts or subaccounts, including, but not limited to, a Rebate Fund. Section 5.04. Construction Fund. (a) There shall be paid into the Construction Fund the amounts required to be so paid by the provisions of the Indenture or any Supplemental Indenture. (b) The Trustee shall establish within the Construction Fund a separate Project Account for each Project and may establish one or more subaccounts in each Project Account. -34- Master Trust Indenture ( c) Amounts in each Project Account established for a Project shall be applied to pay the Cost of Construction of the Project. In the event and to the extent that proceeds of the sale of Bonds were deposited in a Project Account to provide for the payment of capitalized interest, the Trustee shall, during the period for which such interest was capitalized, transfer from such Project Account, to the appropriate Series Subaccount in the Bond Service Account, the amounts required to pay interest on the Bonds when due, subject to any limitations contained in the Supplemental Indenture authorizing such Bonds. (d) Before any payment is made from any Project Account by the Trustee (except for transfers into Series Subaccounts in the Bond Service Account to pay interest on the Bonds as contemplated in (c) above), the City shall file with the Trustee a Written Request of the City, showing with respect to each payment to be made, the name of the person to whom payment is due and the amount to be paid with payment instructions, and stating that the obligation to be paid was incurred and is a proper charge against the Project Account. Each such Written Request shall be sufficient evidence to the Trustee that obligations in the stated amounts have been incurred by the City and that each item thereof is a proper charge against the applicable Project Account. (e) Upon receipt of each such Written Request, the Trustee shall pay the amounts set forth therein as directed by the terms thereof. (f) The City shall maintain on file with the Trustee a schedule of dates on which the City estimates that money in each Project Account will be expended and the amounts estimated to be required on those dates. The City may revise such schedule at any time to reflect changes in the estimated dates and amounts. Amounts in the Construction Fund shall be invested and reinvested by the Trustee, in accordance with instructions received from an Authorized Officer of the City, to the fullest extent practicable in Investment Securities (or, to the extent permitted by a Supplemental Indenture executed and delivered pursuant to Section 10.02(a)(3), in other investments) maturing in such amounts and at such times as may be necessary to make funds available when needed. The Trustee may, and to the extent required for payments from the Construction Fund shall, sell any such Investment Securities at any time, and the proceeds of such sale, and of all payments at maturity and upon redemption of such investments, shall be held in the applicable Project Account in the Construction Fund. (g) Unless otherwise provided in a Supplemental Indenture authorizing a Series of Construction Bonds, all net income earned on any moneys or investments in the Project Account established in the Construction Fund for a Project shall be held in such Project Account and applied to pay the Costs of Construction. (h) The substantial completion of construction of each Project shall be evidenced by a Written Certificate of the City, which shall be filed with the Trustee. Upon the filing of such Certificate, the balance in the Project Account in the Construction Fund in excess of the amount, if any, stated in such Certificate shall, to the extent permitted under applicable law and covenants, including any covenants contained in any Tax Certificate, regarding the use of proceeds of the Bonds, and as directed in such Written Certificate or in a Supplemental Indenture, be (i) used to purchase Bonds as provided in Section 5.09, (ii) deposited into the Debt -35- Master Trust Indenture