OFFICIAL STATEMENT DATED SEPTEMBER 16, 2014
NEW ISSUE-BOOK-ENTRY ONLY RATING: S&P “AAA”
In the opinion of Wilentz, Goldman & Spitzer, P.A., Woodbridge, New Jersey, Bond Counsel (“Bond Counsel”) to the Middlesex County Improvement Authority (“Authority”), under existing statutes, regulations and judicial decisions, assuming continuing compliance with certain tax-related covenants described herein, (i) interest on the Bonds (as defined below) is not includable in gross income for Federal income tax purposes, pursuant to section 103 of the Internal Revenue Code of 1986, as amended (“Code”), and (ii) such interest will not be treated as a preference item under section 57 of the Code for purposes of calculating the Federal alternative minimum tax; such interest, however, will be included in the adjusted current earnings of a corporation for purposes of the Federal alternative minimum tax imposed on corporations. Bond Counsel is further of the opinion that, under existing laws of the State of New Jersey, interest on the Bonds and any gain on the sale of the Bonds is not includable in gross income under the New Jersey Gross Income Tax Act. See “TAX EXEMPTION” herein.
$17,275,000 MIDDLESEX COUNTY IMPROVEMENT AUTHORITY (County of Middlesex, State of New Jersey) County-Guaranteed Capital Equipment and Improvement Revenue Bonds, Series 2014
Dated: Date of Delivery Due: September 15, as shown on the inside front cover
The $17,275,000 aggregate principal amount of County-Guaranteed Capital Equipment and Improvement Revenue Bonds, Series 2014 (“Bonds”), will be issued by the Middlesex County Improvement Authority (“Authority”) as fully registered bonds and, when issued, will be registered in the name of Cede & Co. (“Cede”), as nominee for The Depository Trust Company, New York, New York (“DTC”), an automated depository for securities and a clearing house for securities transactions, which will act as securities depository for the Bonds. Individual purchases will be made in book-entry only form, without certificates, in the principal amount of $5,000 or any integral multiple thereof.
The Bonds will be dated and shall bear interest from their date of delivery, payable semi-annually on March 15 and September 15 in each year, commencing March 15, 2015, until the Authority’s obligation with respect to the payment of the Bonds is discharged. The principal of the Bonds will be payable upon presentation or surrender thereof at the principal corporate trust office of TD Bank, National Association, Cherry Hill, New Jersey, as Trustee and Paying Agent (respectively, the “Trustee” and “Paying Agent”) for the Bonds, as set forth on the inside cover hereof. Interest on the Bonds is payable by check of the Trustee mailed to the registered owner of the Bonds, as described herein. Provided DTC or its nominee Cede is the registered owner of the Bonds, payments of the principal of and interest on the Bonds will be made directly to DTC or its nominee, which is obligated to remit such principal and interest to DTC Participants, as defined herein. DTC Participants and Indirect Participants, as defined herein, will be responsible for remitting such payments to the beneficial owners of the Bonds. See “DESCRIPTION OF THE BONDS - Book-Entry Only System” herein.
The Bonds are not subject to redemption prior to their stated maturity dates.
The Bonds are being issued pursuant to: (i) the Bond Resolution of the Authority entitled, “Resolution of the Middlesex County Improvement Authority Authorizing the Issuance of County-Guaranteed Capital Equipment and Improvement Revenue Bonds” adopted on August 13, 2014 (“General Bond Resolution”); (ii) a resolution of the Authority adopted on August 13, 2014 authorizing the sale of the Bonds (“Determination Resolution”); (iii) a certificate of the Chairman or Vice Chairman of the Authority, dated the date of original issuance of the Bonds, exercising powers delegated by the Determination Resolution; and (iv) the County Improvement Authorities Law, N.J.S.A. 40:37A-44 et seq., as amended and supplemented (“Act”). The Bonds are being issued to: (i) provide funds to finance the undertaking, acquisition and installation, as applicable, of Improvements and/or Items of Equipment to be loaned and/or leased, as applicable, to the County of Middlesex, State of New Jersey (“County”), and certain municipalities located within the County (together with the County, each, a “Municipality” and collectively, the “Municipalities”); and (ii) pay certain costs incurred in connection with the issuance and delivery of the Bonds. The Bonds will be direct and special obligations of the Authority and will be payable solely from Revenues (as defined herein) and secured by a lien on the Pledged Property (as defined herein) under the General Bond Resolution. The Pledged Property includes but is not limited to: (i) the Revenues, including the Authority’s right to receive (a) Basic Loan Payments (as defined herein) from the Municipalities under the Loan and Security Agreement by and between the Authority and each applicable Municipality to be dated as of September 30, 2014 (“Loan Agreement”) and/or (b) Basic Rent (as defined herein) from the Municipalities under the Lease and Agreement by and between the Authority and each applicable Municipality to be dated as of September 30, 2014 (“Lease”); (ii) the Funds and Accounts (other than the Rebate Fund) held and established under the General Bond Resolution, including Investment Securities held in any such Funds or Accounts; (iii) all of the Authority’s right, title and interest in and to Vehicles, including any Proceeds and moneys received from the sale thereof and in and to any of the foregoing; and (iv) all other moneys, securities or funds pledged for the payment of the principal or Redemption Price of and interest on the Bonds in accordance with the terms and provisions of the General Bond Resolution. Each Loan Agreement is a valid and enforceable full faith and credit obligation of the respective Municipality and, unless paid from other sources, is payable from the levy of ad valorem taxes on all taxable property in such Municipality without limitation as to rate or amount. Each Lease is a valid and enforceable full faith and credit obligation of the respective Municipality and, unless paid from other sources, is payable from the levy of ad valorem taxes on all taxable property in such Municipality without limitation as to rate or amount.
The Bonds are further secured by a full and unconditional guarantee (“County Guarantee”) from the County to pay, when due, the principal of and interest on the Bonds. The County has the power and the obligation to cause the levy of ad valorem taxes upon all taxable property in the County, without limitation as to rate or amount, for the payment of its obligations under the County Guarantee.
THE BONDS SHALL NOT BE IN ANY WAY A DEBT OR LIABILITY OF, AND SHALL NOT CREATE OR CONSTITUTE ANY INDEBTEDNESS, LIABILITY OR OBLIGATION OF, AND SHALL NOT BE OR CONSTITUTE A PLEDGE OF THE FAITH AND CREDIT OF, THE STATE OF NEW JERSEY OR OF ANY POLITICAL SUBDIVISION THEREOF OTHER THAN THE AUTHORITY, AND, AS APPLICABLE UNDER AND LIMITED BY THE COUNTY GUARANTEE, THE COUNTY. NEITHER THE STATE OF NEW JERSEY NOR ANY POLITICAL SUBDIVISION THEREOF OTHER THAN THE AUTHORITY, AND, AS APPLICABLE UNDER AND LIMITED BY THE COUNTY GUARANTEE, THE COUNTY, IS OBLIGATED TO PAY THE PRINCIPAL OR REDEMPTION PRICE OF AND INTEREST ON THE BONDS AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF NEW JERSEY OR ANY POLITICAL SUBDIVISION THEREOF OTHER THAN, AS APPLICABLE UNDER AND LIMITED BY THE COUNTY GUARANTEE, THE COUNTY, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OR REDEMPTION PRICE OF AND INTEREST ON THE BONDS, BUT ALL BONDS SHALL BE PAYABLE SOLELY FROM REVENUES OR FUNDS PLEDGED OR AVAILABLE FOR THEIR PAYMENT, INCLUDING ANY FUNDS AVAILABLE UNDER THE COUNTY GUARANTEE, AS AUTHORIZED BY THE ACT. THE COUNTY GUARANTEE DOES NOT PROVIDE FOR THE PAYMENT OF REDEMPTION PREMIUM ON THE BONDS, IF ANY. THE AUTHORITY HAS NO TAXING POWER.
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 including the Appendices attached hereto, to obtain information essential to their making an informed investment decision. Words and terms used herein which are not defined are defined in Appendices C, D, E and F, respectively, attached hereto.
The Bonds are offered when, as and if issued and delivered to the Underwriter, subject to prior sale, withdrawal or modification of the offer without any notice, and to the unqualified approval of legality by Wilentz, Goldman & Spitzer, P.A., Woodbridge, New Jersey, Bond Counsel to the Authority. Certain legal matters will be passed upon for the Authority by Venezia & Nolan, P.C., Woodbridge, New Jersey, Counsel to the Authority, for the Underwriter by Parker McCay P.A., Mount Laurel, New Jersey, and for the County by Thomas F. Kelso, Esquire, New Brunswick, New Jersey, County Counsel. Phoenix Advisors, LLC, Bordentown, New Jersey has served as financial advisor to the Authority in connection with the issuance of the Bonds. It is expected that the Bonds will be available for delivery to DTC in New York, New York on or about September 30, 2014.
$17,275,000 MIDDLESEX COUNTY IMPROVEMENT AUTHORITY (County of Middlesex, State of New Jersey) County-Guaranteed Capital Equipment and Improvement Revenue Bonds, Series 2014
MATURITIES, AMOUNTS, INTEREST RATES, YIELDS AND CUSIP NUMBERS
Maturity Date Principal Interest CUSIP (September 15) Amount Rate Yield Number** 2015 $3,330,000 1.500% 0.210% 596566WZ8 2016 3,360,000 2.000 0.410 596566XA2 2017 3,425,000 3.000 0.700 596566XB0 2018 3,530,000 3.000 1.010 596566XC8 2019 3,630,000 3.000 1.320 596566XD6
** Registered trademark of American Bankers Association. CUSIP data herein is provided by Standard & Poor's, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. The CUSIP numbers listed above are being provided solely for the convenience of Bondholders only at the time of issuance of the Bonds and the Authority does not make any representation with respect to such numbers or undertake any responsibility for their accuracy now or at any time in the future. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds. MIDDLESEX COUNTY IMPROVEMENT AUTHORITY 101 Interchange Plaza Cranbury, New Jersey 08512
MEMBERS
Leonard J. Roseman, Chairman Robert J. Mantz, Vice Chairman Jacque Eaker, Secretary-Treasurer Camille Fernicola, Member Anthony Raczynski, Member
EXECUTIVE DIRECTOR
Richard Pucci
GENERAL COUNSEL
Venezia & Nolan, P.C. Woodbridge, New Jersey
FINANCIAL ADVISOR
Phoenix Advisors, LLC Bordentown, New Jersey
BOND COUNSEL
Wilentz, Goldman & Spitzer, P.A. Woodbridge, New Jersey
AUDITOR
Hodulik & Morrison, P.A. Highland Park, New Jersey
COUNTY OF MIDDLESEX, STATE OF NEW JERSEY Middlesex County Administration Building John F. Kennedy Square New Brunswick, New Jersey 08901
BOARD OF CHOSEN FREEHOLDERS
Ronald G. Rios, Freeholder Director Carol Barrett Bellante, Deputy Freeholder Director Kenneth Armwood, Freeholder Blanquita B. Valenti, Freeholder H. James Polos, Freeholder Charles E. Tomaro, Freeholder Charles Kenny, Freeholder
COUNTY OFFICIALS
John A. Pulomena, County Administrator Giuseppe Pruiti, Chief Financial Officer/Treasurer Margaret E. Pemberton, Clerk of the Board of Chosen Freeholders
COUNTY COUNSEL
Thomas F. Kelso, Esquire New Brunswick, New Jersey
AUDITOR
Hodulik & Morrison, P.A. Highland Park, New Jersey
The information which is set forth herein has been provided by the Authority and by other sources which are believed to be reliable by the Authority, but the information provided by such sources is not guaranteed as to accuracy or completeness by the Authority. Certain general and financial information concerning the County of Middlesex, State of New Jersey ("County"), is contained in Appendix A to this Official Statement. Such information has been furnished by the County. Certain information concerning equipment to be purchased or improvements to be undertaken by the participating municipalities ("Municipalities") is contained in the forepart to this Official Statement. Such information has been furnished by the Municipalities. The Authority has not confirmed the accuracy or the completeness of the information relating to the Municipalities and the Authority disclaims any responsibility for the accuracy or completeness thereof. Where the Constitution or statutes of the State of New Jersey are referred to, reference should be made to such Constitution or statutes for a complete statement of the matters referred to. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose.
No dealer, broker, salesman or any other person has been authorized by the Authority or the Underwriter to give any information or to make any representation other than those contained in this Official Statement in connection with the offering of the Bonds, and if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority, the County or the Municipalities since the date hereof.
Upon issuance, the Bonds will not be registered under the Securities Act of 1933, as amended, will not be listed on any stock or other securities exchange and neither the Securities and Exchange Commission, nor any other Federal, state, municipal or other governmental entity, other than the Authority (subject to the limitations set forth above), will have passed upon the accuracy or adequacy of this Official Statement.
This Official Statement includes the cover page, inside cover page and the Appendices attached hereto. The Underwriter has been authorized by the Authority to print the Bond offering prices and its name on the cover page and the inside front cover, together with the interest rates per annum adopted for the various maturities of the Bonds.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
The order and placement of materials in this Official Statement, including the Appendices, are not to be deemed to be a determination of relevance, materiality or importance, and this Official Statement, including the Appendices, must be considered in its entirety.
THE UNDERWRITER HAS PROVIDED THE FOLLOWING SENTENCE FOR INCLUSION IN THIS OFFICIAL STATEMENT. THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS PART OF, ITS RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS AS THEY APPLY TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION, BUT THE UNDERWRITER DOES NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION.
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TABLE OF CONTENTS Page
INTRODUCTION ...... 1 PLAN OF FINANCING ...... 2 Overview ...... 2 Review by Local Finance Board ...... 2 Action by the County ...... 2 Action by the Municipalities ...... 3 The Capital Equipment and Improvement Financing Program ...... 3 Application of Proceeds ...... 4 ESTIMATED SOURCES AND USES OF FUNDS ...... 4 SECURITY FOR THE BONDS ...... 5 General ...... 5 Municipal Loan Agreements ...... 5 Municipal Leases ...... 6 County Guarantee ...... 7 DESCRIPTION OF THE BONDS ...... 8 General ...... 8 Book-Entry Only System ...... 9 Discontinuance of Book-Entry Only System ...... 11 Additional Bonds ...... 12 Refunding Bonds ...... 12 THE AUTHORITY ...... 12 General ...... 12 The Authority Board ...... 14 Authority Professional Staff ...... 14 Scope of Powers of the Authority ...... 14 DEBT SERVICE REQUIREMENTS ...... 16 LEGALITY FOR INVESTMENT ...... 16 PLEDGE OF THE STATE NOT TO LIMIT POWER OF AUTHORITY OR RIGHTS OF BONDHOLDERS ...... 17 MUNICIPAL BANKRUPTCY ...... 17 NEGOTIABILITY OF THE BONDS ...... 18 LITIGATION ...... 18 The Authority ...... 18 The County ...... 18 The Municipalities ...... 18 BONDS NOT A DEBT OF THE STATE OF NEW JERSEY ...... 19 TAX EXEMPTION ...... 19 Federal Income Taxation ...... 19 Additional Federal Income Tax Consequences ...... 20 State Taxation ...... 20 Prospective Tax Law Changes ...... 20 Other Tax Consequences ...... 20 Page
APPROVAL OF LEGALITY ...... 20 UNDERWRITING ...... 21 SECONDARY MARKET DISCLOSURE ...... 21 RATING ...... 22 FINANCIAL ADVISOR ...... 22 APPENDICES ...... 22 MISCELLANEOUS ...... 23
Appendix A GENERAL AND FINANCIAL INFORMATION CONCERNING THE COUNTY Appendix B PROPOSED FORM OF BOND COUNSEL OPINION Appendix C COPY OF THE BOND RESOLUTION Appendix D COPY OF THE GUARANTEE ORDINANCE AND FORM OF THE GUARANTEE AGREEMENT Appendix E FORM OF THE LOAN AND SECURITY AGREEMENT Appendix F FORM OF THE LEASE AND AGREEMENT Appendix G FORM OF CONTINUING DISCLOSURE AGREEMENT Appendix H IMPROVEMENTS OR ITEMS OF EQUIPMENT TO BE FINANCED WITH THE BONDS
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OFFICIAL STATEMENT OF MIDDLESEX COUNTY IMPROVEMENT AUTHORITY (County of Middlesex, State of New Jersey)
$17,275,000 COUNTY-GUARANTEED CAPITAL EQUIPMENT AND IMPROVEMENT REVENUE BONDS, SERIES 2014
INTRODUCTION
This Official Statement, including the cover page and inside cover page, footnotes, appendices and material included herein by reference, is provided to furnish certain information in connection with the issuance and sale of the $17,275,000 aggregate principal amount of County- Guaranteed Capital Equipment and Improvement Revenue Bonds, Series 2014 ("Bonds") of the Middlesex County Improvement Authority ("Authority"), a public body corporate and politic existing under and by virtue of the laws of the State of New Jersey ("State") and, in particular, the County Improvement Authorities Law, N.J.S.A. 40:37A-44 et seq., as amended and supplemented ("Act"). This Official Statement should be read in its entirety.
The Bonds are being issued pursuant to: (i) the Act; (ii) the Bond Resolution of the Authority entitled, "Resolution of the Middlesex County Improvement Authority Authorizing the Issuance of County-Guaranteed Capital Equipment and Improvement Revenue Bonds" ("General Bond Resolution"), adopted on August 13, 2014; (iii) a resolution adopted by the Authority on August 13, 2014, authorizing the sale of and certain matters with respect to the Bonds ("Determination Resolution"); and (iv) a certificate of the Chairman or Vice Chairman of the Authority ("Series Certificate"), dated the date of original issuance of the Bonds, exercising powers delegated by the Determination Resolution. The General Bond Resolution, the Determination Resolution and the Series Certificate shall hereinafter collectively be referred to as the "Bond Resolution".
The proceeds of the Bonds will be used to: (i) finance the undertaking, acquisition and installation, as applicable, of certain Improvements and/or Items of Equipment for the County of Middlesex, New Jersey ("County"), and certain municipalities located within the County (each a "Municipality" and, collectively, the "Municipalities") ("Capital Equipment and Improvement Financing Program"); and (ii) pay certain costs incurred in connection with the issuance and delivery of the Bonds.
The Bonds are direct and special obligations of the Authority payable from Revenues (as hereinafter defined) and secured by a lien on the Pledged Property (as hereinafter defined) which includes, but is not limited to: (i) the Revenues, including the Authority's right to receive (a) Basic Loan Payments (as defined herein) from the applicable Municipalities under each Loan and Security Agreement, by and between the Authority and each applicable Municipality, to be dated as of September 30, 2014 (each, a "Loan Agreement" and, collectively, the "Loan Agreements") and/or (b) Basic Rent (as defined herein) from the applicable Municipalities under each Lease and Agreement, by and between the Authority and each applicable Municipality, to be dated as of September 30, 2014 (each, a "Lease" and, collectively, the "Leases"); (ii) the Funds and Accounts (other than the Rebate Fund) held and established under the General Bond Resolution, including Investment Securities held in any such Funds or Accounts; (iii) all of the Authority's right, title and interest in and to Vehicles, including any Proceeds and moneys received from the sale thereof and in and to any of the foregoing; and (iv) all other moneys, securities or funds pledged for the payment of the principal or Redemption Price of and interest on the Bonds in accordance with the terms and provisions of the General Bond Resolution. Each Loan Agreement is a valid and enforceable full faith and credit obligation of the respective Municipality and, unless paid from
other sources, is payable from the levy of ad valorem taxes on all taxable property in such Municipality without limitation as to rate or amount. Each Lease is a valid and enforceable full faith and credit obligation of the respective Municipality and, unless paid from other sources, is payable from the levy of ad valorem taxes on all taxable property in such Municipality without limitation as to rate or amount.
The Bonds are further secured by a full and unconditional guarantee ("County Guarantee") of the County to pay, when due, the principal of and interest on the Bonds (but not redemption premium, if any) in accordance with the Guarantee Agreement, by and between the Authority and the County ("Guarantee Agreement"), to be dated as of September 30, 2014, and acknowledged and accepted by TD Bank, National Association, with its principal corporate trust office located in Cherry Hill, New Jersey, as Trustee for the Bonds ("Trustee"). The County has the power and the obligation to cause the levy of ad valorem taxes upon all the taxable property in the County, without limitation as to rate or amount, for the payment of its obligations under the County Guarantee.
Words and terms used herein which are not defined herein, are defined under "COPY OF THE BOND RESOLUTION", "COPY OF THE GUARANTEE ORDINANCE AND FORM OF THE GUARANTEE AGREEMENT", "FORM OF THE LOAN AND SECURITY AGREEMENT" and "FORM OF THE LEASE AND AGREEMENT" set forth in Appendices C, D, E and F, respectively, attached hereto. The description and summaries of various documents hereinafter set forth do not purport to be comprehensive or definitive, and reference is made to the full text of each document for the complete details of all terms and conditions. All statements herein are qualified in their entirety by reference to each document.
PLAN OF FINANCING
Overview
The Bonds are being issued for the purposes of: (i) financing the undertaking, acquisition and installation, as applicable, of certain Improvements and/or Items of Equipment for the Municipalities; and (ii) paying certain costs incurred in connection with the issuance and delivery of the Bonds.
Review by Local Finance Board
Pursuant to the Local Authorities Fiscal Control Law, N.J.S.A. 40A:5A-1 et seq., the Authority made application to the Local Finance Board, in the Division of Local Government Services, New Jersey Department of Community Affairs ("Local Finance Board"), to review the Authority's proposed issuance of the Bonds. After the hearing on such application on August 13, 2014, the Local Finance Board adopted resolutions reporting its favorable findings to the Authority in connection with the issuance of the Bonds and the adoption of the Guarantee Ordinance (as hereinafter defined) by the County. The Authority will adopt a resolution acknowledging the Authority members' review of the Local Finance Board's findings with respect to the Bonds and the County Guarantee, and such related matters, and each member of the Authority will execute a group affidavit for the Bonds and the County Guarantee to such effect, all in accordance with N.J.S.A. 40A:5A-7.
Action by the County
The Board of Chosen Freeholders of the County has, by ordinance finally adopted on August 21, 2014 ("Guarantee Ordinance"), authorized the execution by the County of the Guarantee Agreement. The Guarantee Ordinance provides that the County shall fully and unconditionally guarantee payment, when due, of the principal of and interest on the Bonds but not redemption premium, if any. In the adoption of the Guarantee Ordinance and in accordance with the requirements of the Act, specifically N.J.S.A. 40:37A-80, the Board of Chosen Freeholders of the County approved the execution and delivery of the Guarantee Agreement and the Continuing Disclosure Agreement (as hereinafter defined). Reference is
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made to the "COPY OF THE GUARANTEE ORDINANCE AND FORM OF THE GUARANTEE AGREEMENT" included as Appendix D attached hereto for a more complete description of the provisions of the Guarantee Ordinance and Guarantee Agreement.
The Guaranty Ordinance also provides the consent of the County to the undertaking of the Capital Equipment and Improvement Financing Program by the Authority, the entering into Loan Agreements and Leases by the Authority with each Municipality for the purposes of undertaking, acquiring and installing, as applicable, certain Improvements and Items of Equipment and the guarantee of the Bonds by the County, all pursuant to N.J.S.A. 40:37A-56.
Action by the Municipalities
The governing body of each Municipality has, by loan ordinance (each, a "Loan Ordinance") and/or lease ordinance (each, a "Lease Ordinance"), as applicable, duly adopted and in full force and effect in accordance with the procedures outlined in the Local Bond Law, N.J.S.A. 40A:2-1 et seq., as amended and supplemented ("Local Bond Law"), authorized the execution and delivery on behalf of such Municipality of the respective Loan Agreement and/or Lease, as applicable, between the Municipality and the Authority and the pledge of the Municipality's full faith and credit to the payment of the Municipality's payment obligations under its Loan Agreement and/or Lease, as applicable.
The Municipalities' payment obligations under the Loan Agreements and/or Leases are enforceable regardless of whether an annual appropriation has been made by the Municipality. Reference is made to the "FORM OF THE LOAN AND SECURITY AGREEMENT" and "FORM OF THE LEASE AND AGREEMENT" included as Appendices E and F attached hereto for a more complete description of the provisions of the Loan Agreement and Lease.
The Capital Equipment and Improvement Financing Program
Upon issuance of the Bonds, a portion of the proceeds of the Bonds will be deposited in separate municipal accounts ("Municipal Accounts") created for each Municipality within the Acquisition and Improvement Fund established pursuant to the Bond Resolution. Moneys on deposit in each Municipal Account within the Acquisition and Improvement Fund will be requisitioned by the respective Municipality to which such Municipal Account relates in accordance with the provisions of each Loan Agreement and/or Lease and will be used to undertake, purchase and install, as applicable, the Improvements and/or Items of Equipment identified in such Loan Agreement and/or Lease (including such Improvements and/or Items of Equipment, as applicable, as may be substituted therefor in accordance with the provisions of the Loan Agreement and/or Lease). Each Municipality agrees that it will be responsible for the letting of contracts for the undertaking, purchase and installation of the Improvements or Items of Equipment, as applicable, and supervising the undertaking, installation and acceptance of the Improvements or Items of Equipment, as applicable. In accordance with all local public contract laws and such Municipality's usual purchasing procedures, each Municipality will use its best efforts to cause the undertaking, purchase, installation and requisition of the moneys for the payment of the Improvements and/or Equipment, as applicable, from the Municipal Account in the Acquisition and Improvement Fund in accordance with the following: the Municipality shall spend or requisition (i) fifteen (15%) percent of the Loan or Lease proceeds, as applicable, in its Municipal Account in the Acquisition and Improvement Fund within six (6) months after the date of the original issuance of the Bonds; (ii) sixty (60%) percent of the Loan or Lease proceeds, as applicable, in its Municipal Account in the Acquisition and Improvement Fund within twelve (12) months after the date of original issuance of the Bonds; and (iii) one hundred (100%) percent of the Loan or Lease proceeds, as applicable, in its Municipal Account in the Acquisition and Improvement Fund within eighteen (18) months after the date of original issuance of the Bonds so as not to subject the Bonds to arbitrage rebate. During the Loan Term, the Municipality will hold title to the Improvement and Equipment. During the term of the Lease,
-3- the Authority will hold title to the Equipment and lease such Items of Equipment to the respective Municipality. Each Municipality will make Basic Loan Payments and/or payments of Basic Rent to the Trustee for the benefit of the Authority on January 15 and July 15 in each year during the Loan and/or Agreement Lease Term, commencing January 15, 2015 (each, a "Loan Payment Date" or "Lease Payment Date"), which Loan Payment Date and/or Lease Payment Date shall not be later than the fifteenth day of the second month immediately preceding each Interest Payment Date and Principal Installment Date, as applicable, in an amount equal to the Municipality's allocable share of Debt Service due on the Bonds on the next succeeding Interest Payment Date and Principal Installment Date, as applicable. In addition, each Municipality shall pay to the Trustee, as the same becomes due and payable, on any Loan Payment Date and/or Lease Payment Date or within thirty (30) days of demand by the Trustee, the administrative costs borne by the Authority in connection with the Capital Equipment and Improvement Financing Program, including any and all direct and indirect costs and expenses incurred by the Authority or the County in connection with the enforcement of the Loan Agreements, the Leases or the County Guarantee. At the expiration of the Lease Term and provided that the Municipality has paid all amounts due and owing under the Lease and has cured any and all defaults that may have occurred under the Lease, the Municipality will have the option to purchase from the Authority each Item of Equipment for the purchase price of one dollar ($1.00). Except as may be specifically agreed to in writing by the Authority and the Municipality, the Loan Term and/or Lease Term for each Improvement and/or Item of Equipment, as applicable, shall equal the useful life of the respective Improvement and/or Item of Equipment to which it relates.
The names of the participating Municipalities and the estimated initial deposit into the Municipal Accounts in the Acquisition and Improvement Fund to be used for the undertaking of Improvements and/or the purchase of Equipment are as follows:
Municipality Estimated Lease Deposit Estimated Loan Deposit Borough of Carteret $105,000.00 $225,000.00 Borough of Highland Park 124,000.00 152,500.00 Borough of Middlesex 125,000.00 763,325.00 County of Middlesex 1,365,793.00 13,501,403.81 Township of Monroe 75,200.00 823,100.00 Township of Old Bridge 300,000.00 0.00 City of South Amboy 115,322.52 113,000.00 Borough of Spotswood 55,000.00 0.00 TOTAL $2,265,315.52 $15,578,328.81
Application of Proceeds
The Improvements or Items of Equipment being financed through the Capital Equipment and Improvement Financing Program are of various types and are identified for each Municipality in Appendix H attached hereto. These Improvements or Items of Equipment represent the items that each Municipality reasonably anticipates that it will undertake and/or acquire and/or install, as applicable.
ESTIMATED SOURCES AND USES OF FUNDS
The following tables set forth the estimated sources and uses of funds for the Capital Equipment and Improvement Financing Program in connection with the issuance of the Bonds.
-4- Sources of Funds: Principal Amount of Bonds $17,275,000.00 Original Issue Premium 939,037.20 Total Sources of Funds $18,214,037.20
Uses of Funds: Deposit into Municipal Accounts in Acquisition and Improvement Fund $17,843,644.33 Deposit into Operating Fund for Costs of Issuance1 370,392.87 Total Uses of Funds $18,214,037.20
SECURITY FOR THE BONDS
General
The Bonds are direct and special obligations of the Authority payable solely from the Revenues and secured by a lien on the Pledged Property, which includes, but is not limited to: (i) the Revenues, including the Authority's right under each Loan Agreement and/or Lease to receive Basic Loan Payments and/or Basic Rent, as applicable, from the Municipalities; (ii) the Funds and Accounts held and created under the Bond Resolution (except the Rebate Fund) including Investment Securities held in any such Funds or Accounts; (iii) all of the Authority's right, title and interest in and to the Improvements and/or Items of Equipment (including any Proceeds and moneys received from the sale thereof) pursuant to the Loan Agreements and/or Leases; and (iv) all other moneys, securities or funds pledged for the payment of principal or Redemption Price of, if any, and interest on the Bonds in accordance with the Bond Resolution (collectively, the "Pledged Property"). The Revenues so pledged include: (i) all amounts, including Basic Loan Payments and/or Basic Rent, as applicable, received by the Authority under the Loan Agreements (excluding certain Additional Loan Payments) and/or Leases (excluding certain Additional Rent Payments); (ii) any moneys or securities held pursuant to the Bond Resolution and paid or required to be paid into the Debt Service Fund; (iii) any payments made by the County to the Authority on behalf of any Municipality pursuant to the County Guarantee, the Guarantee Agreement and the Bond Resolution; and (iv) other amounts received from any other source by the Authority and pledged by the Authority under the Bond Resolution as security for the payment of the Bonds.
Reference is made to the "COPY OF THE BOND RESOLUTION" included as Appendix C attached hereto and "COPY OF THE GUARANTEE ORDINANCE AND FORM OF THE GUARANTEE AGREEMENT" included as Appendix D attached hereto for a more complete description of the provisions of the Bond Resolution and the Guarantee Ordinance and Guarantee Agreement, respectively.
Municipal Loan Agreements
Pursuant to the Loan Agreements, each Municipality (including the County) will pay to the Trustee, as Basic Loan Payments for the Improvements and/or Items of Equipment, on each January 15 and July 15, commencing January 15, 2015, an amount, which together with available moneys, if any, on deposit in the respective Municipal Account within the Debt Service Fund and the respective Municipal Account within the Proceeds Fund, will equal the Municipality's allocable share of Loan Agreement Debt Service on the Bonds due on the next succeeding Interest Payment Date and Principal Installment Date, as applicable. In addition, each Municipality will pay to the Trustee, as same becomes due and payable at any time during the Loan Term, on any Loan Payment Date or within thirty (30) days after demand by the
1 Includes, but is not limited to, Underwriter's discount, legal, accounting, printing, rating, rounding amount, financial advisory and fiduciary expenses incurred in connection with the issuance of the Bonds.
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Trustee, Additional Loan Payments, including but not limited to, the annual Trustee's fee and Authority Administrative Expenses.
All Loan Payments (which consist of Basic Loan Payments and Additional Loan Payments) required to be made by each Municipality under its Loan Agreement shall continue to be made without interruption for any cause until such time as the Bonds are no longer Outstanding regardless of whether the obligations of the Municipality under the Loan Agreement are accelerated prior to the end of its term. Each Loan Agreement will terminate upon the first date on which no Bonds remain Outstanding and the Municipality has made all Loan Payments and any other amounts obligated to be paid by it under the Loan Agreement.
The obligation of each Municipality to make Loan Payments and to pay all other amounts provided for in its respective Loan Agreement and to perform its obligations under such Loan Agreement is absolute and unconditional and secured by the full faith and credit pledge of the respective Municipality, and such Loan Payments and other amounts are payable by each Municipality without any rights of set-off, recoupment or counterclaim it might have against the Authority, the Trustee, the County or any other person. The obligations of the Municipalities to make Loan Payments are enforceable regardless of whether an appropriation has been made by the Municipality.
The obligation of each Municipality to make Loan Payments and to pay all other amounts provided for in its respective Loan Agreement and to perform its obligation under such Loan Agreement is several and not joint, and no Municipality shall be required to make any Loan Payments on behalf of any other defaulting Municipality, except the County to the extent of its obligations under the Guarantee Ordinance.
Reference is made to the "FORM OF THE LOAN AND SECURITY AGREEMENT" included as Appendix E attached hereto for a more complete description of the provisions of each Loan Agreement.
Municipal Leases
Pursuant to the Leases, each Municipality (including the County) will pay to the Trustee, as Basic Rent for the Equipment, on each January 15 and July 15, commencing January 15, 2015, an amount, which together with available moneys, if any, on deposit in the respective Municipal Account within the Debt Service Fund and the respective Municipal Account within the Proceeds Fund, will equal the Municipality's allocable share of Lease Debt Service on the Bonds due on the next succeeding Interest Payment Date and Principal Installment Date, as applicable. In addition, each Municipality will pay to the Trustee, as same becomes due and payable at any time during the Lease Term, on any Lease Payment Date or within thirty (30) days after demand by the Trustee, Additional Rent, including but not limited to, the annual Trustee's fee and Authority Administrative Expenses.
All Rental Payments (which consist of Basic Rent and Additional Rent) required to be made by each Municipality under its Lease shall continue to be made without interruption for any cause until such time as the maturities of the Bonds to which such Lease relates are no longer Outstanding regardless of whether the obligations of the Municipality under the Lease are accelerated prior to the end of its term. Each Lease will terminate upon the first date on which no Bonds remain Outstanding and the Municipality has made all Rental Payments and any other amounts obligated to be paid by it under the Lease.
The obligation of each Municipality to make Rental Payments and to pay all other amounts provided for in its respective Lease and to perform its obligations under such Lease is absolute and unconditional and secured by the full faith and credit pledge of the respective Municipality, and such
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Rental Payments and other amounts are payable by each Municipality without any rights of set-off, recoupment or counterclaim it might have against the Authority, the Trustee, the County or any other person and whether or not the Items of Equipment leased pursuant to the Lease are so purchased, used by or available for use by the Municipality. The obligations of the Municipalities to make Rental Payments are enforceable regardless of whether an appropriation has been made by the Municipality.
The obligation of each Municipality to make Rental Payments and to pay all other amounts provided for in its respective Lease and to perform its obligations under such Lease is several and not joint, and no Municipality shall be required to make any Rental Payments on behalf of any other defaulting Municipality, except the County to the extent of its obligations under the Guarantee Ordinance.
Reference is made to the "FORM OF THE LEASE AND AGREEMENT" included as Appendix F attached hereto for a more complete description of the provisions of each Lease.
County Guarantee
The County adopted the Guarantee Ordinance upon final reading on August 21, 2014, in accordance with the Act, fully and unconditionally guaranteeing the payment, when due, of the principal of and interest on the Bonds (but not the redemption premium, if any).
The full faith and credit of the County has been pledged for the payment of the County's obligations under the Guarantee Ordinance and the County has the power and the obligation to cause the levy of ad valorem taxes upon all taxable property located in the County, without limitation as to rate or amount, for the payment of its obligations under the Guarantee Ordinance.
In the event any Municipality fails to make a Basic Loan Payment and/or Basic Rent payment to the Trustee on any Loan Payment Date and/or Lease Payment Date and the Municipality has failed to cure such nonpayment on a date which is thirty (30) days prior to the Interest Payment Date and Principal Installment Date, as applicable, to which such Basic Loan Payment and/or Basic Rent applies, and the amount on deposit in the Municipality's respective Municipal Account within the Debt Service Fund is insufficient to pay such Municipality's allocable share of Debt Service on the Bonds due on such Interest Payment Date and Principal Installment Date, as applicable, then, pursuant to the County Guarantee, the County is required to pay to the Trustee not later than two (2) Business Days prior to such Interest Payment Date and Principal Installment Date, as applicable, the amount of such deficiency for application by the Trustee to the payment of principal of and interest due on the Bonds on such immediately succeeding Interest Payment Date and Principal Installment Date, as applicable. So long as the County makes such debt service payment to the Trustee, the Bonds will not be in default under the Bond Resolution.
Pursuant to the Guarantee Agreement and the Bond Resolution, to the extent any payment is made by the County under or with respect to the County Guarantee for application by the Trustee to the payment of Debt Service on the Bonds, the County shall be reimbursed from any delinquent Basic Loan Payments and/or Basic Rent payments received by the Trustee from such defaulting Municipality subsequent to the Interest Payment Date and Principal Installment Date, as applicable, to which such Basic Loan Payment and/or Basic Rent payment was due and owing by the Municipality, to the extent the County has made payment and remains unreimbursed therefor. The County also has the option of determining whether such delinquent Basic Loan Payments and/or Basic Rent payments will be applied toward succeeding Basic Loan Payments and/or Basic Rent payments of the defaulting Municipality. The County shall be subrogated to the rights of Bondholders with respect to any such delinquent Basic Loan Payments and/or Basic Rent payments. All interest earned or gain realized in each of the Municipal Accounts in the Acquisition and Improvement Fund, Debt Service Fund and Proceeds Fund which is held
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for the benefit of each of the Municipal Accounts in the Proceeds Fund shall be paid by the Trustee to the County from the Municipal Account of the defaulting Municipality to the extent the County remains unreimbursed for or has otherwise incurred County Guarantee Costs on behalf of such Municipality or shall be applied as a credit toward the Basic Loan Payments and/or Basic Rent payments of the defaulting Municipality on the next succeeding Interest Payment Date and Principal Installment Date, as applicable, which determination shall be made at the complete and sole discretion of the County. Finally, to the extent that (i) the County has incurred any County Guarantee Costs, (ii) the County remains unreimbursed by the Municipality for such County Guarantee Costs, (iii) there are moneys remaining and available in any of the funds and accounts created and held under the Bond Resolution, and (iv) the Bonds no longer remain Outstanding, then to the extent the County remains unreimbursed for any such County Guarantee Costs, the moneys remaining in such funds and accounts shall be paid to the County by the Trustee free and clear of the lien and the pledge of the Bond Resolution to the extent required to reimburse the County therefor. The foregoing is a brief summary of the pertinent provisions of the Guarantee Ordinance and the Guarantee Agreement. For a more complete description of the provisions of the Guarantee Ordinance and Guarantee Agreement, reference is made to the "COPY OF THE GUARANTEE ORDINANCE AND FORM OF THE GUARANTEE AGREEMENT" included as Appendix D attached hereto. For certain information regarding the County, reference is made to Appendix A attached hereto.
DESCRIPTION OF THE BONDS
General
The Bonds are to be issued in the aggregate principal amount shown on the front cover page of this Official Statement. The Bonds shall be dated and bear interest from their date of delivery, and such interest shall be payable semiannually on each March 15 and September 15, commencing March 15, 2015, at the rates per annum as set forth on the inside front cover page of this Official Statement. Principal on the Bonds will be paid in annual installments, as set forth on the inside front cover page of this Official Statement. The Bonds will be issued as fully registered book-entry bonds, and registered in the name of Cede & Co. ("Cede"), as nominee for The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Bonds under its book-entry only system ("DTC Book-Entry Only System"). An individual purchaser may purchase a Bond in book-entry only form, without certificates, in denominations of $5,000 or any integral multiple thereof. Provided DTC, or its nominee Cede, is the registered owner of the Bonds, the principal of and interest on the Bonds will be paid to DTC or Cede, as its nominee. See "Book-Entry Only System" herein. In the event the Bonds are no longer subject to the DTC Book-Entry Only System, the principal of the Bonds will be payable upon surrender of the respective Bonds at the principal corporate trust office of TD Bank, National Association, with its principal corporate trust office located in Cherry Hill, New Jersey, as Paying Agent ("Paying Agent"), or at any other place which may be provided for such payment by the appointment of any other Paying Agent or Paying Agents as permitted by the Bond Resolution. The interest on the Bonds will be payable by check mailed on March 15 and September 15 in each year (or, if any such date is not a Business Day, on the next succeeding Business Day), commencing on March 15, 2015 (each an "Interest Payment Date"), to each owner thereof in whose name the Bond is registered upon the registration books maintained by the Trustee, at its principal corporate trust office in Cherry Hill, New Jersey, as of the close of business on the first day of March and September (whether or not a Business Day) next preceding any Interest Payment Date ("Record Date"); provided, however, an owner of $1,000,000 or more in principal amount of Bonds shall be entitled, upon five (5) Business Days' written notice to the Trustee in advance of the applicable Record Date, to receive interest payments by wire transfer of immediately available funds. Under the Bond Resolution, the Trustee has been appointed Trustee, Bond Registrar and Paying Agent.
The Bonds are not subject to redemption prior to their stated maturity dates.
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Book-Entry Only System1
The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such issue, and will be deposited with DTC.
DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and 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 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
1 Source: The Depository Trust Company
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Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority or Paying Agent as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds and distributions on the 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 detail information from the Authority or 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, Paying Agent, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds and distributions to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Authority or Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered.
The Authority may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC.
The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Authority believes to be reliable, but neither the Authority nor the Underwriter take any responsibility for the accuracy thereof.
THE AUTHORITY, THE PAYING AGENT AND THE TRUSTEE CANNOT AND DO NOT GIVE ANY ASSURANCES THAT DTC, THE DTC DIRECT PARTICIPANTS OR THE INDIRECT PARTICIPANTS WILL DISTRIBUTE TO THE BENEFICIAL OWNERS OF THE BONDS (i) PAYMENTS OF PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS, (ii) CONFIRMATION OF OWNERSHIP INTERESTS IN THE BONDS, OR (iii) REDEMPTION OR OTHER NOTICES SENT TO DTC OR CEDE & CO., ITS NOMINEE, AS THE REGISTERED OWNER OF THE BONDS, OR THAT THEY WILL DO SO ON A TIMELY BASIS OR THAT DTC, DTC DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE CURRENT "RULES" APPLICABLE TO DTC ARE ON FILE WITH THE SECURITIES AND
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EXCHANGE COMMISSION, AND THE CURRENT "PROCEDURES" OF DTC TO BE FOLLOWED IN DEALING WITH DTC DIRECT PARTICIPANTS ARE ON FILE WITH DTC.
THE AUTHORITY, THE PAYING AGENT AND THE TRUSTEE WILL HAVE NO RESPONSIBILITY OR OBLIGATION TO ANY DTC DIRECT PARTICIPANT, INDIRECT PARTICIPANT OR BENEFICIAL OWNER OF THE BONDS OR ANY OTHER PERSON WITH RESPECT TO: (i) THE BONDS; (ii) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC DIRECT PARTICIPANT OR INDIRECT PARTICIPANT; (iii) THE PAYMENT BY DTC OR ANY DTC DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS; (iv) THE DELIVERY BY DTC OR ANY DTC DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE INDENTURE TO BE GIVEN TO BONDHOLDERS; (v) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF BONDS; OR (vi) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS BONDHOLDER.
SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE BONDHOLDERS OR REGISTERED OWNERS OF THE BONDS (OTHER THAN UNDER THE CAPTION "TAX EXEMPTION") SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE BONDS.
Discontinuance of Book-Entry Only System
In the event that the book-entry system is discontinued and the Beneficial Owners become registered owners of the Bonds, the following provisions would apply: (i) the Bonds may be exchanged for an equal aggregate principal amount of Bonds in other authorized denominations, of the same maturity, upon surrender thereof at the principal corporate trust office of the Paying Agent; (ii) the transfer of any Bonds may be registered on the books maintained by the Paying Agent for such purpose only upon the surrender thereof to the Paying Agent together with the duly executed assignment in form satisfactory to the Authority and the Paying Agent; and (iii) for every exchange or registration of transfer of Bonds, the Paying Agent may make a charge sufficient to reimburse for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer of the Bonds. Interest on the Bonds will be payable by check or draft mailed on each Interest Payment Date to the registered owners thereof as of the close of business on the first (1st) day of the calendar month containing an Interest Payment Date.
If the Authority, in its sole discretion, determines that DTC is not capable of discharging its duties, or if DTC discontinues providing its services with respect to the Bonds at any time, the Authority will attempt to locate another qualified Securities Depository. If the Authority fails to find such Securities Depository, or the Authority determines, in its sole discretion, that it is in the best interest of the Authority or that the interest of the Beneficial Owners might be adversely affected if the book-entry only system of transfer is continued (the Authority undertakes no obligation to make an investigation to determine the occurrence of any events that would permit it to make such determination) the Authority shall notify DTC of the termination of the book-entry only system.
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Additional Bonds
The Authority may not issue additional bonds (other than Refunding Bonds as described below) under the Bond Resolution for any purpose.
Refunding Bonds
One or more Series of Refunding Bonds ("Refunding Bonds") may be authenticated and delivered upon original issuance to refund all or any portion (as determined by the Authority) of any Outstanding Bonds or one or more maturities within such Series of Bonds upon compliance with certain terms and conditions set forth in the Bond Resolution, including the written consent of the County. All Refunding Bonds shall be issued as County-guaranteed obligations. Refunding Bonds shall be issued in a principal amount sufficient, together with other moneys available therefor, to accomplish such refunding. Upon the defeasance of any Bonds being refunded, the refunded Bonds shall no longer be entitled to the benefit of the County Guarantee for the refunded Bonds and such County Guarantee shall be released and extinguished thereon.
THE AUTHORITY
General
The Authority is a public body politic and corporate constituting a political subdivision of the State, and an instrumentality of the County, that was created pursuant to the Act by resolution of the Board of Chosen Freeholders of the County on September 6, 1990. The Authority was established for the purpose of provision of public facilities, transportation facilities, the acquisition of equipment and the acquisition of property owned by the federal government. Subsequent amendments to the Act permit the Authority to provide for the construction of convention halls, solid waste disposal facilities, recreation/entertainment centers, low and moderate income housing, to serve as a redevelopment agency and to provide financing on behalf of certain non-profit entities under certain circumstances.
Specific purposes under the Act, specifically N.J.S.A. 40:37A-54, for which the Authority may act include the following or any combination of the following: (1) Provision within the County or any beneficiary county ("Beneficiary County") of public facilities, including equipment, for use by the State, the County or any Beneficiary County, or any municipality in any such county, or any two or more or any subdivisions, departments, agencies or instrumentalities of any of the foregoing for any of their respective governmental purposes; (2) Provision within the County or any Beneficiary County of public facilities for use as convention halls, or the rehabilitation, improvement or enlargement of any convention hall, including appropriate and desirable appurtenances, located within the convention hall or near, adjacent to or over it within boundaries determined at the discretion of the Authority, including but not limited to office facilities, commercial facilities, community service facilities, parking facilities, hotel facilities and other facilities for the accommodation and entertainment of tourists and visitors; (3) Provision within the County or any Beneficiary County of structures, franchises, equipment and facilities for operation of public transportation or for terminal purposes, including development and improvement of port terminal structures, facilities and equipment for public use in counties in, along or through which a navigable river flows;
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(4) Provision within the County or any Beneficiary County of structures or other facilities used or operated by the Authority or any governmental unit in connection with, or relative to development and improvement of, aviation for military or civilian purposes, including research in connection therewith, and including structures or other facilities for the accommodation of passengers; (5) Provision within the County or any Beneficiary County of a public facility for a combination of governmental and nongovernmental uses; provided that not more than fifty percent (50%) of the usable space in any such facility shall be made available for nongovernmental use under a lease or other agreement by or with the Authority; (6) Acquisition of any real property within the County or any Beneficiary County, with or without the improvements thereof or thereon or personal property appurtenant or incidental thereto, from the United States of America or any department, agency or instrumentality heretofore or hereafter created, designated or established by or for it; and the clearance, development or redevelopment, improvement, use or disposition of the acquired lands and premises in accordance with the provisions and for the purposes stated in the Act, including the construction, reconstruction, demolition, rehabilitation, conversion, repair or alteration of improvements on or to said lands and premises, and structures and facilities incidental to the foregoing as may be necessary, convenient or desirable; (7) Acquisition, construction, maintenance and operation of garbage and solid waste disposal systems for the purpose of collecting and disposing of garbage, solid waste or refuse matter, whether owned or operated by any person, the Authority or any other governmental unit, within or without the County or any Beneficiary County; (8) The improvement, furtherance and promotion of the tourist industries and recreational attractiveness of the County or any Beneficiary County through the planning, acquisition, construction, improvement, maintenance and operation of facilities for the recreation and entertainment of the public, which facilities may include, without being limited to, a center for the performing and visual arts; (9) Provision of loans and other financial assistance and technical assistance for the construction, reconstruction, demolition, rehabilitation, conversion, repair or alteration of buildings or facilities designed to provide decent, safe and sanitary dwelling units for persons of low and moderate income in need of housing, including the acquisition of land, equipment or other real or personal properties which the Authority determines to be necessary, convenient or desirable appurtenances, all in accordance with the provisions of the Act, as amended and supplemented; (10) Planning, initiating and carrying out redevelopment projects for the elimination, and for the prevention of the development or spread of blighted, deteriorated or deteriorating areas and the disposition, for uses in accordance with objectives of the redevelopment project, of any property or part thereof acquired in the area of such project; (11) Any combination or combinations of the foregoing or following; (12) Subject to the prior approval of the Local Finance Board, the planning, design, acquisition, construction, improvement, renovation, installation, maintenance and operation of facilities or any other type of real or personal property within the County for a corporation or other person organized for any one or more of the purposes described in subsection "a" of N.J.S.A. 15A:2-1, except those facilities or any other type of real or personal property which can be financed pursuant to the provisions of P.L. 1972, c.29 (C.26:2I-1 et seq.) as amended; and
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(13) Pooling of loans for any local governmental units within the County or any Beneficiary County that are refunding bonds in order to achieve more favorable interest rates and terms for those local governmental units. The Authority Board
The Authority consists of five (5) members appointed by the Board of Chosen Freeholders of the County.The present members of the Authority are as follows:
Members Title or Position Present Term Leonard J. Roseman Chairman 2/01/11-1/31/16 Robert J. Mantz Vice-Chairman 2/01/12-1/31/17 Jacque Eaker Secretary-Treasurer 2/01/13-1/31/18 Anthony Raczynski Member 2/01/14-1/31/19 Camille Fernicola Member 2/01/10-1/31/15
Authority Professional Staff
Mr. Richard Pucci has served as Executive Director of the Authority since 1991, and currently serves pursuant to an agreement. Mr. Pucci is also the Mayor of the Township of Monroe, in the County. Mr. Pucci has extensive experience in the administration of municipal government as he has served as Business Administrator for the following municipalities: the Borough of Spotswood, New Jersey from June 1986 to December 1987; the City of Orange, New Jersey from August 1980 to June 1984; and the City of Perth Amboy, New Jersey from July 1976 to July 1980. In addition, from July 1970 to June 1972, Mr. Pucci served as Deputy Commissioner of the Department of Parks and Public Property for the City of Perth Amboy. Mr. Pucci holds a Masters Degree in Public Administration from Rider University, Lawrenceville, New Jersey and a Bachelor of Arts Degree in Communications from the University of Miami, Coral Gables, Florida.
Scope of Powers of the Authority
The Authority exercises public and essential governmental functions to provide for the public convenience, benefit and welfare and shall have perpetual succession and, for the effectuation of its purposes, it has the following additional powers (subject to the provisions of the Act), including but not limited to the following:
(a) To adopt and have a common seal and to alter the same at pleasure;
(b) To sue and be sued;
(c) To acquire, hold, use and dispose of its facility charges and other revenues and other moneys;
(d) To acquire, rent, hold, use and dispose of other personal property for the purposes of the Authority;
(e) Subject to the provisions of Section 26 of the Act, to acquire by purchase, gift, condemnation or otherwise, or lease as lessee, real property and easements or interests therein necessary or useful and convenient for the purposes of the Authority, whether subject to mortgages, deeds of trust or other liens or otherwise, and to hold and to use the same, and to dispose of property so acquired no longer necessary for the purposes of the Authority; provided that the Authority may dispose of such property at
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any time to any governmental unit or person if the Authority shall receive a leasehold interest in the property for such term as the Authority deems appropriate to fulfill its purposes;
(f) Subject to the provisions of Section 13 of the Act, to lease to any governmental unit or person, all or any part of any public facility for such consideration and for such period or periods of time and upon such other terms and conditions as it may fix and agree upon;
(g) To enter into agreements to lease, as lessee, public facilities for such term and under such conditions as the Authority may deem necessary and desirable to fulfill its purposes, and to agree, pursuant thereto, to be unconditionally obligated to make payments for the term of the lease, without set- off or counterclaim, whether or not the public facility is completed, operating or operable, and notwithstanding the destruction of, damage to, or suspension, interruption, interference, reduction or curtailment of the availability or output of the public facility to which the agreement applies;
(h) To extend credit or make loans to any governmental unit or person for the planning, design, acquisition, construction, equipping and furnishing of a public facility, upon the terms and conditions that the loans be secured by loan and security agreements, mortgages, leases and other instruments, the payments on which shall be sufficient to pay the principal of and interest on any bonds issued for the purpose by the Authority, and upon such other terms and conditions as the Authority shall deem reasonable;
(i) Subject to the provisions of Section 13 of the Act, to make agreements of any kind with any governmental unit or person for the use or operation of all or any part of any public facility for such consideration and for such period or periods of time and upon such other terms and conditions as it may fix and agree upon;
(j) To borrow money and issue negotiable bonds or notes or other obligations and provide for and secure the payment of any bonds and the rights of the holders thereof, and to purchase, hold and dispose of any bonds;
(k) To apply for and to accept gifts or grants of real or personal property, money, material, labor or supplies for the purposes of the Authority from any governmental unit or person, and to make and perform agreements and contracts and to do any and all things necessary or useful and convenient in connection with the procuring, acceptance or disposition of such gifts or grants;
(l) To determine the location, type and character of any public facility and all other matters in connection with all or any part of any public facility which it is authorized to own, construct, establish, effectuate or control;
(m) To make and enforce bylaws or rules and regulations for the management and regulation of its business and affairs and for the use, maintenance and operation of any public facility, and to amend the same;
(n) To do and perform any acts and things authorized by the Act under, through or by means of its own officers, agents and employees, or by contract with any governmental unit or person;
(o) To acquire, purchase, construct, lease, operate, maintain and undertake any project and to fix and collect facility charges for the use thereof;
(p) To mortgage, pledge or assign or otherwise encumber all or any portion of its revenues and other income, real and personal property, projects and facilities for the purpose of securing its bonds, notes and other obligations or otherwise in furtherance of the purpose of the Act;
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(q) To extend credit or make loans to redevelopers for the planning, designing, acquiring, constructing, reconstructing, improving, equipping and furnishing any redevelopment project or redevelopment work;
(r) To conduct examinations and investigations, hear testimony and take proof, under oath at public or private hearings of any material matter, require the attendance of witnesses and the production of books and papers and issue commissions for the examination of witnesses who are out of the State, unable to attend, or excused from attendance;
(s) To authorize a committee designated by it consisting of one or more members, or counsel, or any officer or employee to conduct any such investigation or examination, in which case such committee, counsel, officer or employee shall have power to administer oaths, take affidavits and issue subpoenas or commissions;
(t) To enter into any and all agreements or contracts, execute any and all instruments, and do and perform any and all acts or things necessary, convenient or desirable for the purposes of the Authority or to carry out any power expressly given in the Act subject to P.L. 1971, c.198, "Local Public Contracts Law", N.J.S.A. 40A:11-1 et seq; and
(u) To pool loans for any local governmental units within the County or any Beneficiary County that are refunding bonds and do and perform any and all acts or things necessary, convenient or desirable for the purpose of the Authority to achieve more favorable interest rates and terms for those local governmental units.
DEBT SERVICE REQUIREMENTS
The following table shows the principal payment and interest requirements during the term of the Bonds:
Bond Year (September 15) Principal Payment Interest Annual Debt Service 2015 $3,330,000.00 $416,587.50 $3,746,587.50 2016 3,360,000.00 384,750.00 3,744,750.00 2017 3,425,000.00 317,550.00 3,742,550.00 2018 3,530,000.00 214,800.00 3,744,800.00 2019 3,630,000.00 108,900.00 3,738,900.00 Total $17,275,000.00 $1,442,587.50 $18,717,587.50
LEGALITY FOR INVESTMENT
Notwithstanding any restriction contained in any other law, under the Act, the Bonds are securities in which the State and all public officers, municipalities, counties, political subdivisions and public bodies, and agencies thereof, all banks, trust companies, savings banks and institutions, building and loan associations, savings and loan associations, investment companies, and other persons carrying on a banking business, all insurance companies, insurance associations and other persons carrying on an insurance business, and all executors, administrators, guardians, trustees and other fiduciaries; may legally invest any sinking funds, moneys or other funds belonging to them or within their control, in the Bonds, and said Bonds are securities which are authorized as security for any and all public deposits.
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PLEDGE OF THE STATE NOT TO LIMIT POWER OF AUTHORITY OR RIGHTS OF BONDHOLDERS
The Act sets forth the pledge, covenant and agreement of the State that it will not limit or alter the rights vested by the Act in the Authority to, inter alia, fix, establish, charge and collect its facility charges and to perform and fulfill the terms of any agreements made with holders of bonds or other obligations of the Authority so as to in any way impair the rights and remedies of such holders, and will not modify in any way the exemption from taxation provided for in the Act, until such bonds or other obligations, together with interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceedings by or on behalf of such holders, are fully met and discharged or provided for.
MUNICIPAL BANKRUPTCY
The undertakings of the Authority, the Municipalities and the County should be considered with reference to 11 U.S.C. §101 et seq., as amended and supplemented ("Bankruptcy Code"), and other bankruptcy laws affecting creditors' rights and governmental units in general. The Bankruptcy Code permits a municipality, a political subdivision or a public agency or instrumentality of the State that is insolvent or unable to meet its debts to commence a voluntary bankruptcy case by filing a petition with a bankruptcy court for the purpose of effecting a plan to adjust its debts; directs such a petitioner to file with the court a list of the petitioner's creditors; provides that a petition filed under this chapter shall operate as a stay of the commencement or continuation of any judicial or other proceeding against the petitioner, grants priority to certain debts owed; and provides that the plan must be accepted in writing by or on behalf of creditors holding at least two-thirds in amount and more than one half in number of the allowed claims of at least one (1) impaired class. The Bankruptcy Code specifically does not limit or impair the power of a state to control by legislation or otherwise, the procedures that a local unit must follow in order to take advantage of the provisions of the Bankruptcy Code.
The Bankruptcy Code provides that special revenue acquired by the debtor after the commencement of the case shall remain subject to any lien resulting from any security agreement entered into by such debtor before the commencement of such bankruptcy case. However, special revenues acquired by the debtor after commencement of the case shall continue to be available to pay debt service secured by those revenues. Furthermore, the Bankruptcy Code provides that a transfer of property of a debtor to or for the benefit of any holder of a bond or note, may not be avoided pursuant to certain preferential transfer provisions set forth in such code.
Reference should also be made to N.J.S.A. 52:27-40 et seq. which provides that a local unit, including the Authority, the Municipalities and the County, has the power to file a petition in bankruptcy with any United States Court or court in bankruptcy under the provisions of the Bankruptcy Code, for the purpose of effecting a plan of readjustment of its debts or for the composition of its debts, provided, however the approval of the Local Finance Board, as successor to the Municipal Finance Commission, must be obtained.
THE ABOVE REFERENCES TO THE BANKRUPTCY CODE ARE NOT TO BE CONSTRUED AS AN INDICATION THAT THE AUTHORITY, ANY MUNICIPALITY OR THE COUNTY EXPECTS TO RESORT TO THE PROVISIONS OF SUCH BANKRUPTCY CODE OR THAT, IF IT DID, SUCH ACTION WOULD BE APPROVED BY THE LOCAL FINANCE BOARD, OR THAT ANY PROPOSED PLAN WOULD INCLUDE A DILUTION OF THE SOURCES OF PAYMENT OF AND SECURITY FOR THE BONDS, OR THAT THE BANKRUPTCY CODE COULD NOT BE AMENDED AFTER THE DATE HEREOF.
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NEGOTIABILITY OF THE BONDS
Section 24 of the Act, N.J.S.A. 40:37A-67, provides that any bond or obligation issued pursuant to the Act, including the Bonds, shall be fully negotiable within the meaning and for all purposes of the negotiable instruments law of the State and each holder or owner of such bond or other obligation, including the Bonds or of any coupon appurtenant thereto, by accepting such bond or coupon shall be conclusively deemed to have agreed that such bond, obligation or coupon is and shall be fully negotiable within the meaning and for all purposes of said negotiable instruments law.
LITIGATION
The Authority
The Authority has several lawsuits and/or actions pending against it. There are several lawsuits pending and/or threatened for injuries or damages allegedly resulting from the use of equipment that is leased by the Authority to various municipalities under capital equipment lease programs of the Authority. The municipalities (including the County) involved as lessees are required to defend, hold harmless and indemnify the Authority for these matters.
The Authority also has various actions pending concerning operations of the Authority, including Roosevelt Care Center. The Authority is the license holder and the operator of Roosevelt Care Center at Edison and Roosevelt Care Center at Old Bridge, long-term care facilities.
As of the date hereof, there is no controversy or litigation of any nature now pending or threatened against the Authority, including the matters described above, restraining or enjoining the authorization, sale, execution, issuance or delivery of the Bonds, or in any way contesting or affecting the validity of the Bonds, or any proceedings of the Authority taken with respect to the authorization, sale, execution, issuance or delivery thereof, or the pledge or application of any moneys or security provided for the payment of the Bonds, or the existence or powers of the Authority related to the authorization, issuance, sale, execution or delivery of the Bonds. There is no litigation pending or, to the knowledge of the Authority, threatened in any court wherein an adverse decision would have a material adverse impact on the financial position of the Authority or its ability to provide for the payment of the Bonds.
The County
There is no controversy or litigation of any nature now pending or threatened against the County restraining or enjoining the adoption of the Guarantee Ordinance or the authorization, execution or delivery by the County of the County Guarantee or the Guarantee Agreement, or in any way contesting or affecting the validity of the County Guarantee, or any proceedings of the County taken with respect to the Guarantee Ordinance or the authorization, execution or delivery thereof, or the existence or powers of the County related to the authorization, execution and delivery of the County Guarantee. There is no litigation pending or, to the knowledge of the County, threatened against the County in any court wherein an adverse decision would have a material adverse impact on the financial position of the County or its ability to pay, or to provide for payment to be made by it under, the County Guarantee or the Guarantee Agreement.
The Municipalities
There is no controversy or litigation of any nature now pending or threatened against any Municipality, including the County, restraining or enjoining the authorization, execution or delivery by such Municipality of its respective Loan Agreement and/or Lease, or in any way contesting or affecting the validity of such Loan Agreement and/or Lease, or any proceedings of such Municipality taken with
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respect to the authorization, execution or delivery thereof, the adoption of its Loan Ordinance and/or its Lease Ordinance or the existence or powers of such Municipality related to the authorization, execution and delivery of such Loan Agreement and/or Lease. Except as specifically stated below, there is no litigation pending or, to the knowledge of any Municipality, threatened, in any court wherein an adverse decision would have a material adverse impact on the financial position of such Municipality or its ability to pay, or to provide for payment under, such Loan Agreement and/or Lease.
The Township of Old Bridge is a party to certain litigation entitled NL Industries v. Old Bridge Township, et al., Civil Case No.: 3:13-cv-03493-MAS-TJB, which is currently being defended in Federal District Court, Trenton Vicinage. Should the litigation be decided adversely against the Township, damages resulting therefrom could have a material impact on the financial condition of the Township.
BONDS NOT A DEBT OF THE STATE OF NEW JERSEY
The Bonds shall not in any way be a debt or liability of the State or of any political subdivision thereof other than the Authority and do not and shall not create or constitute any indebtedness, liability or obligation of the State or of any political subdivision thereof, other than (a) the limited obligations of the Authority, which has no taxing power, and (b) the County which, to the extent that other funds of the County are insufficient, has pledged its full faith and credit and will be obligated to levy ad valorem taxes on all taxable property in the County in an amount sufficient to provide for payment under the County Guarantee and the Guarantee Agreement, as is needed to pay the principal of and interest on the Bonds (but not redemption premium, if any).
TAX EXEMPTION
Federal Income Taxation
The Internal Revenue Code of 1986, as amended ("Code"), establishes certain requirements which must be met at the time of, and on a continuing basis subsequent to, the issuance of the Bonds in order for the interest on the Bonds to be and remain excluded from gross income for Federal income tax purposes under Section 103 of the Code. Noncompliance with such requirements could cause the interest on the Bonds to be included in gross income for Federal income tax purposes retroactive to the date of issuance of the Bonds. The Authority has covenanted in the Bond Resolution and will represent in its tax certificate relating to the Bonds and each of the Municipalities have covenanted in each of the respective Loan Agreements and/or Leases that they expect and intend to comply and will comply, to the extent permitted by law, with such requirements.
In the opinion of Wilentz, Goldman & Spitzer, P.A., Bond Counsel, under existing statutes, regulations, rulings and court decisions and assuming continuing compliance by the Authority with the requirements of the Code described above, interest on the Bonds is not includable in gross income for Federal income tax purposes pursuant to Section 103 of the Code. The Bonds are not “specified private activity bonds” within the meaning of Section 57 of the Code and, therefore, the interest on the Bonds will not be treated as a preference item for purposes of computing the Federal alternative minimum tax imposed by Section 55 of the Code. However, the interest on the Bonds owned by corporations will be included in such corporations’ “adjusted current earnings” (as defined in Section 56(g) of the Code) in calculating such corporations’ alternative minimum taxable income for purposes of determining the Federal alternative minimum tax.
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Additional Federal Income Tax Consequences
Prospective purchasers of the Bonds should be aware that ownership of, accrual or receipt of interest on or disposition of tax-exempt obligations, such as the Bonds, may have additional Federal income tax consequences for certain taxpayers, including, without limitation, taxpayers eligible for the earned income credit, recipients of certain Social Security and Railroad Retirement benefits, taxpayers that may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, financial institutions, property and casualty insurance companies, foreign corporations and certain S corporations. Prospective purchasers of the Bonds should also consult with their tax advisors with respect to the need to furnish certain taxpayer information in order to avoid backup withholding.
State Taxation
Bond Counsel is further of the opinion that, under existing laws of the State, interest on the Bonds and any gain realized on the sale of the Bonds are not includable in gross income under the New Jersey Gross Income Tax Act, as amended.
Prospective Tax Law Changes
Federal, state or local legislation, administrative pronouncements or court decisions may affect the tax-exempt status of interest on the Bonds, gain from the sale or other disposition of the Bonds, the market value of the Bonds or the marketability of the Bonds. The effect of any legislation, administrative pronouncements or court decisions cannot be predicted. Prospective purchasers of the Bonds should consult their own tax advisors regarding such matters.
Other Tax Consequences
Except as described above, Bond Counsel expresses no opinion with respect to any Federal, state, local or foreign tax consequences of ownership of the Bonds. Bond Counsel renders its opinion under existing statutes, regulations, rulings and court decisions as of the date of delivery of the Bonds and assumes no obligation to update its opinion after such date to reflect any future action, fact, circumstance, change in law or interpretation, or otherwise. Bond Counsel expresses no opinion as to the effect, if any, on the tax status of the interest paid or to be paid on the Bonds as a result of any action hereafter taken or not taken in reliance upon an opinion of other counsel.
ALL POTENTIAL PURCHASERS OF THE BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS WITH RESPECT TO THE FEDERAL, STATE, LOCAL OR FOREIGN TAX CONSEQUENCES (INCLUDING BUT NOT LIMITED TO THOSE DESCRIBED ABOVE) OF THE OWNERSHIP OF THE BONDS.
See Appendix B for the complete text of the proposed form of Bond Counsel's legal opinion with respect to the Bonds.
APPROVAL OF LEGALITY The issuance and the delivery of the Bonds are subject to the approving legal opinion of Wilentz, Goldman & Spitzer, P.A., Woodbridge, New Jersey, Bond Counsel to the Authority. Certain legal matters will be passed upon for the Authority by Venezia & Nolan, P.C., Woodbridge, New Jersey, Counsel to the Authority, for the Underwriter (as hereinafter defined) by Parker McCay P.A., Mount Laurel, New Jersey, Counsel to the Underwriter, and for the County by Thomas F. Kelso, Esquire, New Brunswick, New Jersey, County Counsel.
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The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or the future performance of parties to the transaction, nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction.
UNDERWRITING
The Bonds are being purchased for re-offering by NW Capital Markets Inc. ("Underwriter"). The Bond Purchase Contract ("Purchase Contract") entered into between the Authority and the Underwriter provides that all of the Bonds will be purchased if any are purchased. The Purchase Contract further provides that the purchase price for the Bonds is $18,101,749.70 (representing the principal amount of the Bonds, plus an original issue premium in the amount of $939,037.20, and less the Underwriter's discount in the amount of $112,287.50).
The Underwriter intends to offer the Bonds to the public initially at the offering yields set forth on the inside front cover page of this Official Statement, which may subsequently change without any requirement of prior notice. The Underwriter reserves the right to join with dealers and other underwriters in offering the Bonds to the public. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) at yields higher than the public offering yields set forth on the inside front cover page, and such public offering yields may be changed, from time to time, by the Underwriter without prior notice.
SECONDARY MARKET DISCLOSURE
In accordance with the provisions of Rule 15c2-12, as amended ("Rule"), promulgated by the Securities and Exchange Commission, pursuant to the Securities Exchange Act of 1934, as amended, the County (an "Obligated Municipality") will, prior to the issuance of the Bonds, enter into an agreement ("Disclosure Agreement") with TD Bank, National Association, with its principal corporate trust office located in Cherry Hill, New Jersey, as dissemination agent, substantially in the form set forth in Appendix G. Except as noted below, as of the date of this Official Statement, the County has made the filings required to comply with all of its respective previous undertakings under the Rule.
While the County has filed its financial information in each of the past five (5) years as required by the Rule, that information was not always filed on a timely basis and was not filed for every one of the County’s obligations through the Authority. Additionally, the County inadvertently filed its 2009, 2010 and 2011 Annual Reports with the Nationally Recognized Municipal Securities Information Repositories designated under its prior undertakings and failed to file such Annual Reports with the Electronic Municipal Market Access (“EMMA”) system, a website created by the MSRB that has been approved by the SEC. The County also did not timely file a Notice of Material Event when its bond and lease obligation credit ratings were each downgraded in 2011 by Moody's Investors Service. The County has now filed all required notices, and related late filing notice, under the Rule, and has taken steps to ensure timely Annual Report filings on a going-forward basis. As of the date hereof, the County’s 2009, 2010 and 2011 Annual Reports have been filed with EMMA and the County is now in compliance with all existing continuing disclosure agreements in all material respects. This covenant is being made by the County to assist the purchasers of the Bonds in complying with the Rule.
The Obligated Municipalities are any Municipality which is scheduled to make lease or loan payments in any calendar year which equal or exceed ten percent (10%) of the Debt Service scheduled to be paid with respect to the Bonds in such calendar year. The County is the only such Obligated
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Municipality. Certain financial and general information concerning the County is set forth in Appendix A. RATING Standard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC business ("Rating Agency") has assigned the Bonds a rating of "AAA". Explanations of the significance of the rating may be obtained from the Rating Agency at 55 Water Street, New York, New York 10041. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies, and assumptions of its own. Such rating reflects only the views of the Rating Agency. There is no assurance that the rating will continue for any period of time or that it will not be revised or withdrawn entirely by the Rating Agency, if in the judgment of the Rating Agency, circumstances so warrant. Any revision or withdrawal of the rating may have an adverse effect on the market price of the Bonds. Neither the Authority (except to the extent as may be set forth in the Disclosure Agreement), Bond Counsel, the Financial Advisor, nor the Underwriter have agreed to take any action with respect to any proposed rating change or to bring such rating change, if any, to the attention of the owners of the Bonds.
FINANCIAL ADVISOR Phoenix Advisors, LLC, Bordentown, New Jersey ("Financial Advisor"), serves as financial advisor to the Authority with respect to the issuance of the Bonds and has assisted in matters relating to the planning, structuring and issuance of the Bonds. However, the Financial Advisor is not obligated to undertake, and has not undertaken, either to make an independent verification of, or to assume responsibility for, the accuracy, completeness or fairness of the information in this Official Statement and the Appendices hereto and, accordingly, expresses no opinion or other assurance with respect thereto. The Financial Advisor is an independent firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities.
APPENDICES Appendix A to this Official Statement consists of certain financial and general information concerning the County which has been provided by the County, respectively, from public documents of the County and from other public or official documents or publications which are referred to therein. The balance sheets of the various funds of the County as of December 31, 2013 and the statement of operations, together with the Notes to the Financial Statements for the years then ended, are also presented in Appendix A to this Official Statement. The financial statements referred to above have been audited by Hodulik & Morrison, P.A., Independent Auditors, as stated in their report appearing in Appendix A. Neither the Authority, Bond Counsel, the Financial Advisor nor the Underwriter has confirmed the accuracy or completeness of the information set forth in Appendix A, and the Authority and the Underwriter each do not guarantee the accuracy or completeness thereof. Appendix B to this Official Statement consists of the proposed form of Bond Counsel Opinion.
Appendix C to this Official Statement consists of the copy of the Bond Resolution.
Appendix D to this Official Statement consists of a copy of the Guarantee Ordinance and the form of the Guarantee Agreement.
Appendix E to this Official Statement consists of the form of copy of the Loan and Security Agreement.
Appendix F to this Official Statement consists of the form of the Lease and Agreement.
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Appendix G to this Official Statement consists of the form of the Continuing Disclosure Agreement.
Appendix H to this Official Statement consists of the list of Improvements and/or Items of Equipment to be financed with the Bonds.
MISCELLANEOUS
Certain portions of the information herein are summaries of certain portions of the Bond Resolution, the Guarantee Ordinance and the Guarantee Agreement, the Loan Agreement and the Lease. Such summaries not purporting to be quoted in full are descriptions of certain provisions and are in all respects subject to and qualified in their entirety by express reference to the provisions of the complete documents in their final form, the forms of which are included in Appendices C, D, E and F, respectively, and will be on file and available for examination at the offices of the Authority and the Trustee.
All information, estimates and assumptions herein have been obtained from officials of the Authority, the County and the Municipalities (but not including the County) other governmental bodies, trade and statistical services and other sources which are believed to be reliable, but no representations whatsoever are made that such estimates or assumptions are correct or will be realized.
This Official Statement is not to be construed as a contract or agreement between the Authority and the Underwriter or the purchaser or holder of any of the Bonds. Any statements made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinions and not as representations of fact. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Municipalities (but not including the County), the County or the Authority since the date hereof. The information contained in the Official Statement is not guaranteed as to accuracy or completeness, and is not to be construed as a representation of the same by the Underwriter.
The Authority has authorized the preparation of a final Official Statement containing pertinent information relative to the Bonds, and said Official Statement is deemed to be the "Final Official Statement" as required by the Rule. The Authority shall, not later than seven (7) business days after the date of such award, provide without cost to the Underwriter to which the Bonds are awarded as its agent, for purposes of distribution, copies of such Final Official Statement. The Underwriter agrees that (i) it shall accept such designation and (ii) it shall assure the distribution of the Final Official Statement.
The execution and delivery of this Official Statement has been approved and authorized by the Authority.
MIDDLESEX COUNTY IMPROVEMENT AUTHORITY
By: /s/ LEONARD J. ROSEMAN LEONARD J. ROSEMAN, Chairman
Dated: September 16, 2014
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APPENDIX A
GENERAL AND FINANCIAL INFORMATION CONCERNING THE COUNTY
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COUNTY OF MIDDLESEX, NEW JERSEY GENERAL AND FINANCIAL INFORMATION
Introduction
The County of Middlesex, State of New Jersey (“County”) was one of the first four counties into which the Province of East Jersey was divided by an Act of the Assembly in 1682. Located in central northeastern New Jersey astride a major transportation corridor, the County is accessible to New York City and Philadelphia.
Governmental Structure
A seven (7) member Board of Chosen Freeholders (“Board of Chosen Freeholders” or “Board”), elected for staggered terms of three (3) years, governs the County. The Board of Chosen Freeholders operates under the commission form on a committee system. Professional department heads in County government are appointed by the Board of Chosen Freeholders and are responsible to the chairman and the committee charged with the specific operation. The County follows the Civil Service merit system of employment, and the Board of Chosen Freeholders abides by the regulations of the State Merit System Board.
The County also established an Office of Administration under the direction of a County Administrator. The County Administrator is a statutory position for a term, authorized by N.J.S.A. 40A:9-42. The County Administrator shall report directly to the Board of Chosen Freeholders on policy matters (i.e., all matters affecting the citizens of the County), and act as its chief executive and administrative officer on all matters involving County Government and have administrative responsibility for all County matters. The County Administrator oversees the preparation of the County's annual operating and capital budgets and may perform other executive or administrative duties as are necessary to ensure the effective functioning of County operations and the efficient use of County resources. The County Administrator shall also perform such other duties as are assigned by the Board of Chosen Freeholders pursuant to N.J.S.A. 40A:9-42. 2012.
Governmental Services
Health and Hospitals. The County provides certain medical, health and extended-care services to residents through the George J. Otlowski Sr. Center for Mental Health, numerous public health clinics and the extended- care facilities at Roosevelt Care Center in Edison and Roosevelt Care Center at Old Bridge. As the historic Edison building of Roosevelt Care Center aged, having originally been designed as a tuberculosis sanitarium with an emphasis on isolation, it had been impossible to operate as a skilled-nursing facility with an efficient staff-to-resident ratio.
In order to address the significant operating inefficiencies at the existing facility, the Board of Chosen Freeholders authorized in 2001 construction of a 180-bed, state of-the-art, long-term care facility across from the historic building. Today the facility operates efficiently: Operating subsidies have been reduced. In October 2011, Roosevelt Care Center at Old Bridge opened its doors. Constructed to LEED Gold standards, the building is the first long-term care facility of its kind in the State to take such stringent measures to limit its ecological imprint. These efforts include an extensive recycling protocol, a nearly paperless operation and automated utility system for maximum energy conservation. Embracing the latest innovations, staff utilize handheld computers for daily communication, employ digital records with regularity and access any number of the A-1
building’s other contemporary amenities, including complete wireless internet capabilities. These measures further reduce the facility’s overall day-to-day operational costs.
Both 180-bed facilities, which in addition to providing quality long-term care, offer a full range of rehabilitative, dementia, and sub-acute services. They are able to operate with staffing costs that are significantly lower than those required by the original building. The construction of these facilities and the operating efficiencies they have brought, are intended to lower the cost of operating the care facilities while continuing to offer the highest level of care to County residents.
Education. The Middlesex County Vocational and Technical School System is acclaimed as one of the finest in the nation. The system provides pre-employment training in approximately 43 vocational and technical skilled areas to high school and adult students. Approximately 3,833 full- and part-time students are served annually. The system, serving industry and labor, contributes greatly to the industrial growth and stability of the County. The mission statement of the County Vocational and Technical Schools is: “To prepare students for employment in the competitive labor force and for life-long learning by providing a program that stresses the expectation that all students achieve the New Jersey Core Curriculum Content Standards (NJCCCS) at all grade levels; work ethic; technology; industry driven occupational skills competency; broadly transferable academic thinking, problem solving and communication skills; diversity and equity behavior; and the rights and responsibilities of citizenship.”
Middlesex County College, established by the Board of Chosen Freeholders in 1964, has an enrollment of more than 13,000 students. The college prepares students for transfer to some of the nation’s most prestigious universities. The College also offers career programs in which graduates directly enter the workplace. The institution has a tremendous positive effect on the local economy. Rutgers, the State University, including Douglass, Cook, Livingston, Busch and Rutgers campuses, is located within the County, as well as Rutgers School of Biomedical and Health Sciences (which has been merged with the former University of Medicine and Dentistry of New Jersey), Princeton University – Forrestal Campus and DeVry University.
Parks and Recreation. The Middlesex County Office of Parks & Recreation currently manages 10,545 acres of parkland for the enjoyment of County residents. Eighteen (18) County Parks and Recreation Facilities totaling 2,916 acres provide recreational and cultural activities with extensive facilities for summer and winter sports, theater and concert programs. Thirty-one (31) Conservation Areas and Preserves, totaling 7,629 acres, offer passive recreation opportunities including hiking along nearly 30 miles of marked trails, bird watching, photography and nature study, while providing important protection to pristine and ecologically sensitive habitat. In addition, three (3) golf facilities are operated and leased by the Middlesex County Improvement Authority (MCIA): Tamarack Golf Course (36 holes); The Meadows at Middlesex (18 holes); and Raritan Landing Golf Course (18-hole executive course). The County has been investing in parks and recreation to add to its long-term livability and its socioeconomic stability. The Open Space and Recreation and Farmland and Historic Preservation Trust Fund was established in 1996. Through this fund, the County has acquired over 7,464 acres of open space either directly by the County or in partnership with its municipalities. This Trust Fund has also been used to develop County and municipal recreational facilities through a grant program focusing on development and redevelopment of municipal parks.
The County is currently pursuing an active program of facility improvements and renovations in existing parks. The County recently completed renovations of Merrill Park in Woodbridge that separates vehicular and pedestrian traffic within the park provides additional parking for recreational events and the construction of new pedestrian paths and two (2) new footbridges connecting core areas of the park. The County also plans to complete a new maintenance facility in Davidson’s Mill Pond Park in South Brunswick Township and renovations to the college soccer field in Thomas A. Edison Park, Edison Township this year. New projects in 2014 include upgrades to the tennis and basketball facilities at Roosevelt Park in Edison with new surfaces and improved lighting, and resurfacing nearly 2 miles of paved walking paths in Thomas Edison Park. The total purchase of development easements through 2013 has brought the County’s preserved farmland to 4,817 acres. A-2
Transportation. The County is one of the most heavily traveled regions in New Jersey. Located at the crossroads of the Northeast Corridor, the County is traversed by the New Jersey Turnpike, the Garden State Parkway, Interstate 287 and U.S. Routes 1, 9, and 130. There are also other arterial roads, including State Routes 18, 27, 28, 32, 33, 34, and 35, in addition to 600 County routes which traverse the County and provide access to numerous residential, shopping, educational, medical, and recreational facilities. The Northeast Corridor rail line provides both Amtrak and NJ Transit commuter rail service (five stops within the County), and there also is regular NJ Transit service on both the North Jersey Coast Line (four stops within the County) and the Raritan Valley line which has a stop in Dunellen. Intercity rail service is also provided by Amtrak. These routes run through the County and have regular stops at either New Brunswick or Metropark. The Acela Express and Northeast Regional operate between Boston and Washington D.C., as the Keystone operates between Harrisburg, Pennsylvania and New York Penn Station.
Commuter bus service is available through NJ Transit, Suburban Transit – Coach USA, and Academy Bus Lines along parts of Routes 1, 9, 18, 27, 34, 130, the Garden State Parkway, and some secondary roads, and includes regular service to New York. Some of these commuter bus routes also serve regional destinations north and south of the County such as Newark, Jersey City, Elizabeth, Lakewood, Jackson, Freehold, Toms River, and Seaside Heights during seasonal times. Local bus service to various parts of the county is available through the NJ Transit 800 routes and the Middlesex County Area Transit (MCAT) shuttle route. Funding for improvements and maintenance of this extensive transportation system comes from Federal, State, County, local and private sources. Additionally, the New Brunswick-Piscataway corridor is served by the Rutgers University inter-campus bus system, which is among the largest in the nation carrying over 6.7 million passengers per year.
Funding sources include Federal Highway Administration funding for eligible roads and bridges, and State aid funds, through the New Jersey Department of Transportation, for State, County, and eligible municipal roads. Funding is also available through local capital improvement programs for County and municipal roads. The Federal Transit Administration and New Jersey Transit provide funding for public transit systems. Funding by private industry for transportation improvements is also possible when private development impacts on transportation facilities. The County’s transportation management association, Keep Middlesex Moving, Inc., works to reduce traffic congestion on existing roads through various management strategies, such as car and van pooling, ride-matching, staggered hours, compressed work schedules, and telecommuting. Pedestrian and bicycle mobility service for transportation and recreation needs are available in certain areas and are being expanded through State, County, and municipal initiatives. Major bicycling facilities within the County include the Johnson Park Bikeway, the Middlesex Greenway, parts of the East Coast Greenway and D&R Canal Towpath, as well as the New Brunswick Bikeway to be constructed in 2014. Bike lanes and bike routes have also been placed on many County and municipal roads throughout the County.
The County’s Division of Transportation under the Department of Community Services, Office of Aging and Disabled Services operates an area-wide transit service for citizens in addition to the MCAT shuttle routes that provide important linkages and support to the County’s regional and local rail and bus system. MCAT also coordinates transit services between municipalities and major job and activity centers; provides various fixed- route bus shuttle services that supplement the NJ Transit bus services; and provides special transportation services for senior and disabled residents.
Economy
The County has been a leader in new construction for many years. According to the December 2013 issue of the New Jersey Department of Community Affairs’ Construction Reporter, the County, with $1,104,977,010 in total dollar amount of Construction Authorized by Building Permits, is second (of the 21 counties) in the State overall; fifth in Residential Construction Authorized by Building Permits with $428,716,639 and first in the Nonresidential Construction Authorized by Building Permits with $676,260,371. The same report ranks the County second in Office Square Feet Authorized by Building Permits (1,011,038 sq. ft), fourth in Residential A-3
Construction Authorized by Building Permits (1,651 units) and first in Retail Square Feet by Square Footage (706,991 sq. ft). Building Permits issued for retail square footage in the County represented 31% of the total permits issued in New Jersey in 2013. The Office Square Feet Certified for the County in 2013 is first in the State at 1,386,043. The County’s 2012 median household income was $77,407. The State’s median household income was $66,950 in 2012. The median household income for the United States was $50,157 for 2012.
Highlights of the December 2013 report included several from the County:
The Township of Woodbridge had 22.1 million dollar amount of construction authorized by building permits in December 2013. The modernization of an existing distribution warehouse for Federal Express was one of the bigger projects. The City of New Brunswick led all localities in the State with 283 authorized dwellings in December 2013. All are part of a 126-store, mixed use building with apartments, retail space and a health club. With the County’s 42,863 businesses, employment was the second highest in the state with 343,400 workers. New Jersey’s three largest counties, including the County, accounted for 91.1% of the total employment in the State.
Pension Information
Those County employees who are eligible for pension coverage are enrolled in the State of New Jersey pension system. The two State-administered pension funds are the Police and Firemen’s Retirement System (N.J.S.A. §43:16A-1 et. seq.) and the Public Employees’ Retirement System (N.J.S.A.§43:15A-7 et. seq.). Benefits, contributions, means of funding and the manner of administration are determined by State Legislation. The Division of Pensions within the Treasury Department of the State of New Jersey is the administrator of the funds.
This Division annually charges counties and other government units for their respective contributions. State law requires that these systems be subject to actuarial valuation every year and actuarial investigation every three (3) years.
Employees
The County provides services through approximately 1,851 employees. County employees are represented by twenty-four (24) labor organizations recognized by the County under the Public Employees Relations Act of 1968 (P.E.R.C.).
All labor units have been settled through 2016. The County considers relations with its unions to be good.
A-4
TWENTY PRINCIPAL TAXPAYERS IN MIDDLESEX COUNTY, NEW JERSEY
ASSESSED TAXPAYER LOCATION VALUATION
E R Squibb Plainsboro, North Brunswick $298,917,500
Isaac Heller Edison, South Brunswick 194,437,500
Keystone Properties (Various) Carteret, Cranbury 144,348,500
Shopping Center Assoc (Menlo Park) Edison 143,882,400
Center Realty/ Fed Storage Whse Edison 143,618,500
Prologis Cranb., Edison, Monroe, Sayr., S. Bruns. 140,844,100
Cedar Brook Corporate Center Cranbury 120,872,200
Buckeye/ Chevron Oil Previously Perth Amboy 119,122,867
AG-Candlebrook Plainsboro 118,656,000
Harbortown Perth Amboy 112,921,100
Forsgate Jamesburg, South Brunswick 110,223,000
GATX Kinder-Morgan Carteret 108,000,000
Morris Perth Amboy Associates Perth Amboy 106,090,200
Firemenich, Inc. Plainsboro 95,000,000
KTR Carteret, Edison 93,028,600
800 Scudders (Merrill Lynch) Plainsboro 90,000,000
Garden State Bldgs/ Raritan Plaza Edison 86,339,800
HVP Ravens Crest II, LLC Plainsboro 85,184,000
Kinder Morgan Liquids Terminal Perth Amboy 83,099,800
Atlantic Realty Woodbridge 81,415,500
______
A-5
MAJOR EMPLOYERS LOCATED IN MIDDLESEX COUNTY, NEW JERSEY
COMPANY NUMBER OF EMPLOYEES
1. Robert Wood Johnson University Hospital 5,000 – 5,249 2. Novo Nordisk 4,500 – 4,749 3. Wakefern Food Corp. 3,500 – 3,749 4. Bristol-Myers Squibb 3,000 – 3,249 5. St. Peter’s University Hospital 2,750 – 2,999 6. J.F.K. Medical Center 2,500 – 2,749 7. Silverline Building Products 2,250 – 2,299 8. Johnson & Johnson 2,000 – 2,249 9. Raritan Bay Medical Center 2,000 – 2,249 10. Home Depot 1,750 – 1,999 11. United Parcel Service 1,750 – 1,999 12. Amerada Hess Corporation 1,500 – 1,749 13. Walmart Stores Inc. 1,250 – 1,499 14. Prudential Insurance Company 1,000 – 1,249 15. Aetna/US Healthcare 1,000 – 1,249 16. BASF Catalyst, LLC 1,000 – 1,249 17. Colgate-Palmolive 1,000 – 1,249 18. Dow Jones & Company 1,000 – 1,249 19. Ericson 750 – 1,000 20. White Rose, Inc. 750 – 1,000
______Source: Middlesex County Department of Economic Development, April 2014.
A-6
MIDDLESEX COUNTY, NEW JERSEY LABOR FORCE
County New Jersey Nationwide Unemployment Unemployment Unemployment Year Labor Force Employment Unemployment Rate Rate Rate 2000 411,155 398,485 12,670 3.1% 3.8% 4.0% 2001 413,674 398,518 15,156 3.7 4.2 4.8 2002 424,300 403,300 21,000 4.9 5.4 5.8 2003 418,300 395,800 22,500 5.4 5.9 6.0 2004 421,057 402,657 18,400 4.3 4.9 5.5 2005 418,600 401,400 17,200 4.1 4.4 5.1 2006 425,900 407,000 18,800 4.4 4.8 4.6 2007 420,000 401,500 18,500 4.4 5.1 4.8 2008 425,000 403,700 21,400 5.0 5.5 5.8 2009 426,799 389,700 37,000 8.7 9.2 9.3 2010 422,900 386,200 36,700 8.7 9.5 9.6 2011 436,200 399,500 36,200 8.8 9.3 8.9 2012 438,700 404,000 34,800 7.9 9.3 7.6 2013 443,800 410,900 32,900 7.4 8.2 7.4 ______Source: New Jersey Department of Labor (based upon U.S. Department of Labor methodology) and U.S. Dept. of Labor Nationwide unemployment rate.
MIDDLESEX COUNTY, NEW JERSEY RETAIL SALES ($000 omitted) Year Middlesex County Percent Change 1994 $6,644,103 14.4% 1995 7,137,733 7.4 1996 7,578,704 6.2 1997 7,786,334 2.7 1998 8,242,514 5.9 1999 N/A N/A 2000 5,943,534 -2.8 2001 8,110,364 36.5 2002 8,150,589 0.5 2003 N/A N/A 2004 8,874,629 8.9 2005 8,869,354 -0.1 2012 8,702,769 -1.9 2013 10,843,308 24.6
______Source: Sales & Marketing Management Magazine 1993 – 2005. ESHI Retail Market Place Profile 2013.
A-7
MIDDLESEX COUNTY, NEW JERSEY POPULATION
Year Middlesex County New Jersey United States 1970 583,813 7,171,112 203,302,031 1980 596,169 7,364,158 226,504,825 1990 671,712 7,747,750 248,790,925 1994 690,810 7,918,796 260,327,021 1995 696,677 7,965,523 262,803,276 1996 701,797 8,009,624 265,228,572 1997 707,589 8,054,178 267,783,607 1998 712,638 8,095,542 270,248,003 1999 717,949 8,143,412 272,690,813 2000 750,162 8,414,350 282,165,844 2001 764,971 8,511,116 285,049,647 2002 775,549 8,590,300 287,745,630 2003 780,995 8,638,396 290,242,027 2004 785,095 8,698,879 292,936,109 2005 789,516 8,717,925 295,618,454 2006 786,971 8,724,560 298,431,771 2007 788,629 8,685,920 301,393,632 2008 789,102 8,685,920 304,177,401 2009 790,738 8,707,739 306,656,290 2010 809,858 8,791,894 309,050,816 2011 814,217 8,821,155 311,591,917 2012 815,917 8,864,590 313,914,010 2013 828,918 8,899,339 317,135,349
______Sources: 1970 through 1990 and 2000 - U.S. Bureau of the Census; 1994 through 2013 – U.S. Bureau of Census and N.J. Department of Labor.
A-8
MIDDLESEX COUNTY, NEW JERSEY NEW BUILDING PERMITS AUTHORIZED
One & Two Multi-Family/Mixed Total Housing Year Family Use Units 2000 1,850 610 3,102 2001 1,533 351 1,884 2002 1,623 376 1,999 2003 1,808 498 2,306 2004 1,899 723 2,622 2005 1,773 1,375 3,148 2006 1,118 1,154 2,272 2007 897 714 1,611 2008 622 18 640 2009 639 293 932 2010 790 861 1,651 2013 817 769 1,587
______Sources: U.S. Bureau of Census and N.J. Department of Labor (1995-2002). N.J. Department of Community Affairs (2013).
MIDDLESEX COUNTY, NEW JERSEY HOUSING PROFILE HOUSING UNITS BY OCCUPANCY, STATUS, AND TENURE Census 2010 2012 Number Percent Number Percent TOTAL UNITS 294,800 100.0% 297,644 100.0% Occupied 281,186 95.4% 284,432 95.6% Owner 187,147 63.5% 185,274 62.2% Renter 94,039 31.9% 99,081 33.3% Vacant 13,614 4.6% 13,212 4.4%
OWNER OCCUPIED HOUSING UNITS BY VALUE 2012 Number Percent
Less than $50,000 352 0.2% $50,000-$99,999 3,244 1.8% $100,000-$149,999 10,490 5.7% $150,000-$199,999 19,036 10.3% $200,000-$249,999 27,941 15.1% $250,000-$299,999 34,741 18.8% $300,000-$399,999 47,490 25.6% $400,000-$499,999 21,787 11.8% $500,000-$749,999 17,168 9.3% $750,000-$999,999 2,457 1.3% $1,000,000 and above 519 0.3% TOTAL 185,225 100.0%
Median Value $295,407 Average Value $327,652
______Source: U.S. Bureau of Census, Decennial Census 1939 – 2013. N.J. Department of Labor – Building Permits Authorized: 2005-2013 Table 6. A-9
MIDDLESEX COUNTY, NEW JERSEY STATUTORY DEBT AS OF DECEMBER 31, 20131 (UNAUDITED) GROSS DEBT:
Issued and Outstanding: Bonds 2 …….………………………………………… $386,502,000 Notes: Dated June 06, 2013 due June 06, 2014 799,600 Notes: Dated June 06, 2013 due June 06, 2014 34,200,400 Total Notes …… ..……………………………………. 35,000,000 421,502,000 Authorized but not Issued ……………………………...... 267,461,374 County Loans from MCIA ………………………………. 28,273,258 Green Acres Trust Program Loans ……………………… 5,719,455 Subtotal 722,416,087 Less: County College Bonds payable by State of New Jersey ………………………….………. 14,220,500 Accounts Receivable from MCIA Loans ……………… 2,172,982 Accounts Receivable from Heldrich Loan ………….... 2,400,000 Accounts Receivable from S.E.R.A. Loan ………….. 799,600
STATUTORY NET DEBT (includes Authorized but not Issued) 3 $702,823,005
______Source: County of Middlesex accounting records. l In accordance with the Local Bond Law, the County is required to include all authorized capital appropriations in its statutory debt statement. 2 See Subsequent Events at page A-13. 3 Does not include County-Guaranteed Revenue Bonds issued by the Middlesex County Improvement Authority (MCIA) as detailed on page A-11. In addition, does not include lease payments/loan payment obligations of the County pursuant to various lease-purchase/loan agreements as detailed on page A-12.
MIDDLESEX COUNTY, NEW JERSEY STATUTORY DEBT LIMIT AS OF DECEMBER 31, 2013 (UNAUDITED)
Three Year Average Equalization Basis (2011,2012,2013) $ 97,897,271,748 Statutory Borrowing Capacity (2% of Equalized Basis)…. $1,957,945,435 Statutory Net Debt l …………………………………… 702,823,005 Remaining Borrowing Capacity ………………………. $1,255,122,430 Percentage of Net Debt to Equalized Valuation Basis 0.72%
______Sources: Division of Local Government Services, N.J. Department of Community Affairs and County of Middlesex accounting records. 1 Does not include County-Guaranteed Lease Revenue Bonds issued by the Middlesex County Improvement Authority (MCIA) as detailed on page A-11. In addition, does not include lease payments/loan payment obligations of the County pursuant to various lease-purchase/loan agreements as detailed on page A-12.
A-10
MIDDLESEX COUNTY, NEW JERSEY COUNTY-GUARANTEED BONDS ISSUED BY MCIA AS OF DECEMBER 31, 2013 (UNAUDITED)
ISSUE ORIGINAL GUARANTEE SERIES DESCRIPTION DATE ISSUE AMT. BALANCE 1
2004 Golf Courses (Ref. Bonds) June 1, 2004 15,265,000 500,000 2004 Capital Equipment Lease Revenue July 15, 2004 12,370,000 75,000 Education Services Comm. Project 2004 (Refunding) Aug. 1, 2004 14,010,000 11,230,000 2005 Capital Equipment Lease Revenue Aug. 15, 2005 15,705,000 240,000 2006 Capital Equipment Lease Revenue July 15, 2006 7,985,000 555,000 2007 Heldrich Bond Issue June 13, 2007 3,000,000 2,400,000 2008 Capital Equipment Lease Revenue Dec. 12, 2008 13,100,000 1,535,000 2008 Open Space (Refunded Bonds) June 19, 2008 29,545,000 17,315,000
2008 Education Services Comm. Project Nov. 18, 2008 40,000,000 35,170,000 2009 Capital Equipment Lease Revenue Sept. 30, 2009 13,115,000 4,470,000 2009 Refunding Golf Course Centers Dec. 18, 2009 4,755,000 4,055,000 2009 Open Space Bonds Dec. 23, 2009 40,000,000 34,265,000 2010 Capital Equipment Lease Revenue Sept. 30, 2010 14,075,000 6,310,000 Education Services Comm. Project 2010 (Refunding) July 8, 2010 5,300,000 3,515,000 2011 Open Space (Refunded Bonds) Sept. 21, 2011 46,830,000 46,830,000 2011 Capital Equipment Lease Revenue Sept. 15, 2011 9,595,000 5,895,000 2011 Capital Improvement Revenue (Refunding) June 15, 2011 2,120,000 545,000 2012 Capital Equipment Lease Revenue Sept. 15, 2012 11,815,000 9,840,000 2013 Capital Equipment Lease Revenue Oct. 15,2013 13,840,000 13,840,000 2013 Refunding Golf Course Centers June 06, 2013 11,875,000 11,875,000
______Source: Middlesex County Comptroller's Office from financial records of the County. 1 County-Guaranteed Bonds do not represent debt of the County. To the extent that revenues from the respective projects are sufficient to pay the debt service on such bonds, the County may take a deduction from its gross debt for the principal amount of bonds outstanding and so guaranteed.
A-11
MIDDLESEX COUNTY, NEW JERSEY OTHER COUNTY LEASE/LOAN OBLIGATIONS AS OF DECEMBER 31, 2013 (UNAUDITED) COUNTY LEASE-PURCHASE/LOAN DESCRIPTION AMOUNT 1
1998 Civic Square II Certificates of Participation 5,375,000.00 1998 Civic Square III Certificates of Participation 17,155,000.00 1998 Refunding of Certificates of Participation (BSS) 10,965,000.00 2005 Capital Equipment Lease Revenue 95,683.00 2006 Capital Equipment Lease Revenue 104,552.00 2008 County Loan From MCIA (Net) 220,828.00 2008 Open Space Trust Fund Revenue 17,315,000.00 2 2009 Capital Equipment Lease Revenue 128,452.00 2009 County Loan From MCIA (Net) 1,558,792.00 2009 Open Space Trust Fund Revenue 34,265,000.00 2 2010 Capital Equipment Lease Revenue 370,040.00 2010 County Loan From MCIA (Net) 5,678,948.00 2010 Youth Detention Center (Refunding) 3,605,000.00 2011 Capital Equipment Lease Revenue 586,627.00 2011 Capital Equipment Refunded Bonds 1999 Series 545,000.00 2011 County Loan From MCIA (Net) 4,410,336.00 2011 Open Space Trust Fund Rev. Refunded Bonds 2003 Series 46,830,000.00 2 2011 Civic Square II (Refunding) COP 37,345,000.00 2012 Capital Equipment Lease Revenue 720,901.00 2012 Civic Square IV (Refunding) COP 35,415,000.00 2012 County Loan From MCIA (Net) 5,798,758.00 2013 Capital Equipment Lease Revenue 1,399,383.00 2013 County Loan From MCIA (Net) 8,432,614.00
______Source: Middlesex County Comptroller's Office from financial records of the County. 1 Lease purchase/loan payment obligations of the County as a participant in various financings. These lease payments/loan payments are not included in the gross debt calculation of the County. 2 The debt service on the Open Space bonds is paid by monies deposited in the Open Space Trust Fund from the Open Space tax levy.
A-12
MIDDLESEX COUNTY SUBSEQUENT EVENTS
For January 1, 2013 – August 21, 2014 see “Subsequent Events on page 69 in the Middlesex County Audit for the year ended December 31, 2013 and 2012.
- August 21, 2014 –
The Board of Chosen Freeholders finally adopted a Loan Ordinance of the County of Middlesex, State of New Jersey approving and authorizing the entering into, execution and delivery of a loan and security agreement with the Middlesex County Improvement Authority for the undertaking of various 2014 capital improvements and the acquisition and installation, as applicable, of various equipment with an estimated cost of $13,251,404, the cost of such improvements and equipment to be financed through the issuance of County-Guaranteed capital equipment and improvement revenue bonds, Series 2013 of the Middlesex County improvement authority.
The Board of Chosen Freeholders finally adopted an Ordinance approving and authorizing the entering into, execution and delivery of a lease and agreement with the Middlesex County Improvement Authority for the purchase of vehicles with an estimated cost of $1,365,793, the cost of such vehicles to be financed through the issuance of County –Guaranteed capital equipment Improvement revenue bonds, Series 2014 of the Middlesex County improvement authority.
The Board of Chosen Freeholders finally adopted an Ordinance authorizing the guaranty by the County of Middlesex, State of New Jersey of the payment of principal of and interest on the County-Guaranteed capital equipment and improvement revenue bonds, issued by the Middlesex County Improvement authority in an aggregate principal amount not to exceed $18,000,000.
A-13
Debt History And Bonded Debt Ratios
The following table shows certain ratios relating to the County's gross and net debt authorized and authorized but not issued at the end of each of the last five (5) years:
MIDDLESEX COUNTY, NEW JERSEY HISTORY OF DEBT RATIOS (UNAUDITED)
Percentage Percentage Gross Debt To Net Debt to Equalized Gross Debt Equalized Net Debt Equalized Year Valuation December 31 Valuation December 31 Valuation
2009 $110,526,972,630 $886,241,746 0.8018 % $607,439,232 0.5496 % 2010 $109,546,597,397 $915,414,439 0.8356 % $639,968,209 0.5842 % 2011 $106.498,536,955 $918,033,099 0.8620 % $661,870,515 0.6215 % 2012 $101,673,177,816 $894,743,318 0.8800 % $652,464,901 0.6417 % 2013 $ 97,897,271,748 $932,876,087 0.9529 % $702,823,005 0.7179 %
______Source: County of Middlesex - Annual Debt Statements for the years presented.
A-16
MIDDLESEX COUNTY, NEW JERSEY SCHEDULE OF GROSS DEBT SERVICE ON OUTSTANDING BONDS AS OF MAY 31, 2014 (UNAUDITED) Total Year Principal 1,2 Interest 3 Debt Service 4 2014 $ 43,915,000.00 $ 13,188,362.55 $ 57,103,362.55 2015 45,150,000.00 11,094,662.76 56,244,662.76 2016 45,121,000.00 9,676,739.13 54,797,739.13 2017 36,125,000.00 8,319,325.51 44,444,325.51 2018 33,620,000.00 7,171,625.63 40,791,625.63 2019 34,050,000.00 6,012,746.92 40,062,746.92 2020 34,190,000.00 4,788,533.02 38,978,533.02 2021 30,335,000.00 3,618,627.02 33,953,627.02 2022 18,380,000.00 2,722,091.12 21,102,091.12 2023 13,785,000.00 2,172,916.15 15,957,916.15 2024 11,775,000.00 1,727,044.26 13,502,044.26 2025 8,532,000.00 1,373,974.88 9,905,974.88 2026 7,440,000.00 1,094,161.50 8,534,161.50 2027 7,450,000.00 829,473.50 8,279,473.50 2028 6,444,000.00 574,681.50 7,018,681.50 2029 3,455,000.00 375,248.50 3,830,248.50 2030 2,770,000.00 233,194.00 3,003,194.00 2031 2,785,000.00 104,886.00 2,889,886.00 2032 205,000.00 35,887.00 240,887.00 2033 225,000.00 25,925.00 250,925.00 2034 100,000.00 14,875.00 114,875.00 2035 100,000.00 10,625.00 110,625.00 2036 100,000.00 6,375.00 106,375.00 2037 100,000.00 2,125.00 102,125.00
$ 386,152,000.00 $ 75,174,105.95 $ 461,326,105.95
______Source: County Comptroller's Office Debt Amortization Schedules. 1 Does not include County-Guaranteed Revenue Bonds issued by the Middlesex County Improvement Authority (MCIA) as detailed on page A-11. In addition, does not include lease payments/loan payments pursuant to various lease-purchase/loan agreements as detailed on page A-12. 2 Includes State share of principal of County College Bonds in the amount of $12,755,500.00. 3 Includes State share of interest on County College Bonds in the amount of $2,660,920.00. 4 2014 principal and interest have been appropriated in the County's 2014 budget.
A-17
MIDDLESEX COUNTY, NEW JERSEY SCHEDULE OF NET DEBT SERVICE ON OUTSTANDING BONDS AS OF MAY 31, 2014 (UNAUDITED) Total 1,2 3 4 Year Principal Interest Debt Service
2014 $ 42,450,000.00 $ 12,746,420.66 $ 55,196,420.66 2015 43,612,500.00 10,707,842.14 54,320,342.14 2016 43,650,500.00 9,339,108.51 52,989,608.51 2017 35,000,000.00 8,022,344.25 43,022,344.25 2018 32,797,500.00 6,901,969.39 39,699,469.39 2019 33,220,000.00 5,765,196.92 38,985,196.92 2020 33,350,000.00 4,564,689.26 37,914,689.26 2021 29,550,000.00 3,418,677.02 32,968,677.02 2022 17,577,500.00 2,545,892.69 20,123,392.69 2023 12,977,500.00 2,021,833.33 14,999,333.33 2024 10,967,500.00 1,602,388.01 12,569,888.01 2025 7,724,500.00 1,276,399.88 9,000,899.88 2026 6,730,000.00 1,022,992.75 7,752,992.75 2027 6,740,000.00 784,042.25 7,524,042.25 2028 6,094,000.00 550,400.25 6,644,400.25 2029 3,105,000.00 367,154.75 3,472,154.75 2030 2,770,000.00 233,194.00 3,003,194.00 2031 2,785,000.00 104,886.00 2,889,886.00 2032 205,000.00 35,887.00 240,887.00 2033 225,000.00 25,925.00 250,925.00 2034 100,000.00 14,875.00 114,875.00 2035 100,000.00 10,625.00 110,625.00 2036 100,000.00 6,375.00 106,375.00 2037 100,000.00 2,125.00 102,125.00 - $ 371,931,500.00 $ 72,071,244.06 $ 444,002,744.06
______Source: County Comptroller's Office Debt Amortization Schedules 1 Does not include County-Guaranteed Revenue Bonds issued by the Middlesex County Improvement Authority (MCIA) as detailed on page A-11. In addition, does not include lease payments/loan payments pursuant to various lease-purchase/loan agreements as detailed on page A-12. 2 Includes State share of principal of County College Bonds in the amount of $12,755,500.00. 3 Includes State share of interest on County College Bonds in the amount of $2,660,920.00. 4 2014 principal and interest have been appropriated in the County's 2014 budget. A-18
MIDDLESEX COUNTY, NEW JERSEY ASSESSED AND EQUALIZED VALUATIONS AND EQUALIZED TAX RATES
Aggregate Assessed County Valuation of Ratio of Assessed Equalized Equalized Taxable Property to True Value of Valuation Tax Rate Year (in dollars) Taxable Property (in dollars) Per $100
1994 $34,872,636,510 80.69% $43,215,367,798 0.4340 1995 34,740,494,081 79.33% 43,789,765,947 0.4220 1996 34,963,986,653 79.17% 44,162,888,646 0.4153 1997 35,248,052,013 79.99% 44,066,106,649 0.4133 1998 35,531,433,594 80.34% 44,225,094,332 0.4145 1999 37,326,447,349 81.45% 45,829,883,730 0.3958 2000 38,061,095,408 80.62% 47,208,625,187 0.3938 2001 38,898,927,566 77.98% 49,883,627,182 0.3861 2002 39,631,942,950 72.23% 54,865,648,386 0.3746 2003 40,319,659,553 66.21% 60,895,121,729 0.3546 2004 40,745,446,402 59.23% 68,792,498,386 0.3268 2005 43,857,896,282 55.87% 78,500,681,269 0.2860 2006 46,563,111,315 51.84% 89,813,697,834 0.2666 2007 48,392,649,994 47.23% 102,454,666,939 0.2571 2008 48,544,253,040 44.13% 109,995,053,068 0.2565 2009 48,574,338,147 43.19% 112,462,305,214 0.2654 2010 48,466,561,786 43.36% 111,769,673,139 0.2776 2011 47,618,803,973 45.18% 105,403,227,977 0.3064 2012 48,006,036,353 47.00% 102,138,329,763 0.3267 2013 47,603,930,913 49.31% 96,531,068,015 0.3529
______Source: Middlesex County Board of Taxation, Abstract of Ratables.
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MIDDLESEX COUNTY, NEW JERSEY ASSESSED VALUATION COUNTY-WIDE BY PROPERTY CLASSIFICATION (in dollars)
Year Vacant Land Residential Farm Commercial Industrial Apartments Total
1995 1,022,725,700 21,140,413,590 122,820,800 4,899,203,500 5,495,963,070 1,702,570,796 34,383,697,456
1996 1,005,507,100 21,535,368,559 120,880,400 4,899,245,600 5,343,759,030 1,723,483,150 34,628,243,839
1997 990,268,900 22,005,126,190 110,569,300 4,982,744,400 5,119,855,430 1,719,682,800 34,928,247,020
1998 1,013,820,500 22,300,696,490 107,752,800 5,035,199,300 4,985,098,730 1,739,706,800 35,182,274,620
1999 1,108,786,150 23,325,695,196 105,363,100 5,429,299,200 5,215,014,100 1,843,710,200 37,027,867,946
2000 1,053,012,900 23,865,077,696 105,946,400 5,686,989,300 5,266,816,900 1,899,884,400 37,877,727,596
A 2001 1,015,863,200 24,431,190,000 110,518,900 5,876,835,891 5,325,533,200 1,951,968,600 38,711,909,791 -2 2002 989,085,800 24,944,505,000 103,997,800 5,941,101,500 5,440,087,700 2,025,834,500 39,444,612,300 0 2003 958,682,600 25,514,638,700 108,104,400 5,931,275,400 5,571,656,600 2,059,586,300 40,143,944,000
2004 953,196,615 25,954,290,165 111,064,700 5,928,429,000 5,570,658,700 2,076,822,400 40,594,461,580
2005 1,147,502,967 28,406,777,500 109,994,400 6,394,492,800 5,493,593,975 2,169,100,600 43,721,462,242
2006 1,250,954,652 30,153,650,965 105,088,300 6,777,136,700 5,796,772,275 2,361,316,600 46,444,919,492
2007 1,175,083,302 31,507,082,624 122,361,900 6,859,196,400 6,291,600,000 2,325,318,800 48,280,643,026
2008 1,083,251,936 31,867,355,624 123,154,600 6,821,770,400 6,213,478,100 2,323,338,900 48,432,349,560
2009 1,005,136,984 32,136,854,499 125,122,900 6,836,054,130 6,053,111,500 2,304,872,400 48,461,152,413
2010 923,290,684 32,241,740,385 120,142,300 6,822,262,730 5,909,522,638 2,324,664,100 48,341,622,837
2011 857,839,384 32,154,718,299 116,738,200 6,630,596,000 5,435,518,468 2,299,450,200 47,494,860,551
2012 820,194,904 32,451,375,450 113,763,100 6,617,036,000 5,506,628,700 2,370,030,000 47,879,028,154
2013 800,665,400 32,348,491,290 117,880,800 6,467,578,936 5,380,121,351 2,370,560,300 47,485,298,077
Source: Middlesex County Board of Taxation.
MIDDLESEX COUNTY, NEW JERSEY DEBT ANALYSIS DECEMBER 31, 2013 (UNAUDITED)
Full Valuation Per Capita 1 $116,453.18
2 County Net Debt ($ 661,870,515) 0.718% County Net Debt per Capita 1 $847.87
2 Municipal Net Debt ($ 988,318,826) 0.972% Municipal Net Debt per Capita 1 $1,211.29
2 Combined Direct Net Debt 1.727% Combined Direct Net Debt per Capita 1 $2,040.16
______Source: County financial records for County Debt and Local Municipalities for Municipal Debt. l Based upon year 2013 Population of 828,926 and 2013 Aggregate True Value of $96,531,068,015 per the 2013 Equalization Table prepared by the Middlesex County Board of Taxation. 2 Percentage based on State of New Jersey calculations of three (3) year average equalized valuations of $97,897,271,748 (for years 2011, 2012, and 2013). ______Note: Net debt figures include all school and general bonds and notes issued, reduced by funds on hand for debt service and exclude all self-liquidating debt (including debt of all local authorities and utilities). 2013 Aggregate True Value, year 2013 Population and December 31, 2012 and June 30, 2012 Municipal Debt were used in calculations unless otherwise noted.
STATEMENT OF OVERLAPPING DEBT
The County’s twenty-five (25) municipalities are, in general, serviced by local public authorities and utilities for water and sewerage service and, in some cases, parking. The debt of these public authorities and utilities is typically paid from user service charges and connection fees. The Middlesex County Utilities Authority ("MCUA"), which is located in the northern, most populated portion of the County, provides secondary treatment and disposal of effluent for eighteen (18) municipalities and one (1) authority. As of December 31, 2013, the MCUA had $190,877,965 aggregate principal amount of debt outstanding relating to the Waste Water Division Component and $55,152,385 aggregate principal amount of debt outstanding relating to the Solid Waste Division Component. No actual or contingent liability for the payment of any such indebtedness exists on the part of the County.
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MIDDLESEX COUNTY, NEW JERSEY EQUALIZED VALUE OF PROPERTY BY CONSTITUENT MUNICIPALITIES
2013 General* Tax Rate 2013 Per $100 Percent of Municipality 2010 2011 2012 2013 2014 Valuation Collection **
Carteret Boro$ 2,845,888,104 $ 2,664,858,458 $ 2,141,651,516 $ 2,073,387,003 $ 1,960,746,661 $2.94 98.260 Cranbury Twp 1,704,948,271 1,629,928,334 1,610,737,319 1,494,986,311 1,561,888,554 1.83 99.370 Dunellen Boro 680,482,726 643,137,863 604,454,438 569,449,462 553,084,033 11.77 97.850 East Brunswick Twp 8,232,562,681 7,826,659,879 7,550,387,396 7,229,007,150 7,243,291,908 9.60 98.850 Edison Twp 16,118,778,759 15,388,152,301 14,798,010,782 14,020,673,249 14,154,869,738 4.58 99.850 Helmetta Boro 253,472,551 248,380,915 214,981,021 217,727,608 204,530,949 2.76 97.850 Highland Park Boro 1,506,701,132 1,441,721,627 1,363,570,689 1,376,634,775 1,293,534,693 7.17 100.000 Jamesburg Boro 533,494,563 523,738,354 500,052,840 453,969,523 432,680,593 5.48 98.300 Metuchen Boro 2,345,197,193 2,298,237,066 2,223,377,407 2,154,613,252 2,121,701,671 5.39 98.750 Middlesex Boro 1,701,530,610 1,662,848,676 1,582,931,710 1,457,045,103 1,409,619,504 7.80 97.570 Milltown Boro 1,035,802,184 984,825,625 937,193,977 912,984,761 865,099,041 4.87 98.460 A Monroe Twp 7,865,019,985 6,957,329,654 6,989,065,251 6,646,836,680 6,719,653,264 4.13 99.300
- New Brunswick City 3,496,302,341 3,248,691,573 3,168,119,378 3,120,578,536 3,173,887,778 5.58 99.940
2 North Brunswick Twp 4,965,300,393 4,830,087,720 4,761,894,445 4,387,321,020 4,573,448,641 5.10 99.710
2 Old Bridge Twp 7,854,796,311 7,562,460,359 7,344,890,242 6,908,904,819 6,807,582,255 4.42 99.710 Perth Amboy City 4,018,115,198 3,667,914,289 3,733,773,818 3,154,144,153 3,204,095,668 2.84 99.350 Piscataway Twp 6,860,691,226 6,566,091,793 6,325,985,629 6,203,124,488 6,158,768,621 6.63 98.460 Plainsboro Twp 3,840,773,813 3,816,979,462 3,883,970,960 3,857,587,632 3,793,949,572 2.43 99.800 Sayreville Boro 5,398,243,762 5,250,732,026 5,074,295,921 4,764,465,916 4,441,520,316 4.59 98.230 South Amboy City 1,018,072,952 973,463,224 907,144,470 873,326,595 836,937,513 2.50 99.260 South Brunswick Twp 8,379,296,100 8,227,877,146 8,167,554,842 7,701,483,648 7,857,568,028 4.53 98.740 South Plainfield Boro 4,161,660,001 4,073,891,820 3,960,742,778 3,653,543,945 3,714,283,185 5.39 98.230 South River Boro 1,620,353,673 1,559,875,073 1,442,951,849 1,331,956,265 1,319,732,478 6.91 97.480 Spotswood Boro 930,015,574 894,373,672 842,996,884 788,651,678 763,687,429 2.87 98.320 Woodbridge Twp 14,402,173,036 12,460,971,068 12,007,594,201 11,178,664,443 10,754,813,319 9.39 99.940
Totals$ 111,769,673,139 $ 105,403,227,977 $ 102,138,329,763 $ 96,531,068,015 $ 95,920,975,412
* Includes Municipal, School and County Taxes
** Each Municipality is required to pay to the County Treasurer 100% of its share of the County Purpose Tax from the first taxes collected.
Source: Middlesex County Board of Taxation for Equalization Values and Tax Rates: Municipalities for 2013 Percentage of Collection.
MIDDLESEX COUNTY, NEW JERSEY GROSS AND STATUTORY DEBT OF CONSTITUENT MUNICIPALITIES DECEMBER 31, 2012 1
Gross Debt Statutory Deductions 2 Averaged % of Equalized Net Municipality School Self-Liquidating General School Self-Liquidating General Net Debt Valuations Debt Carteret 1,370,000.00 - 80,204,497.66 1,370,000.00 - 57,443,280.48 22,761,217.00 2,674,006,327.00 0.91 Cranbury 4,660,000.00 - 24,761,996.00 4,660,000.00 - 7,443,500.00 17,318,496.00 1,620,401,855.00 1.13 Dunellen 9,305,000.00 - 4,530,247.05 9,305,000.00 - 77,557.48 4,452,689.57 597,083,897.00 0.81 East Brunswick 91,771,480.00 41,723,773.00 50,876,964.00 91,771,480.00 41,723,773.00 13,134,000.00 37,742,964.00 7,652,225,179.00 0.52 Edison 7,230,000.00 7,562,465.00 80,603,594.00 7,230,000.00 3,350,746.80 849,585.86 83,965,726.70 14,878,302,517.00 0.56 Helmetta - 1,286,494.60 1,590,000.00 - 1,286,494.60 - 1,590,000.00 232,777,808.00 0.72 Highland Park 24,895,000.00 3,993,019.42 14,952,980.96 24,895,000.00 3,993,019.42 - 14,952,980.96 1,382,424,966.00 1.05 Jamesburg 3,185,000.00 - - 3,185,000.00 - - - 491,022,626.00 - Metuchen 27,610,000.00 268,800.00 33,141,355.00 27,610,000.00 268,800.00 10,950,000.00 22,191,355.00 2,211,211,500.00 0.96 Middlesex 4,315,000.00 250,000.00 18,707,912.59 4,315,000.00 250,000.00 12,588.76 18,695,323.83 1,556,959,501.00 1.07 Milltown 6,657,000.00 21,827,123.44 5,864,071.59 6,657,000.00 21,827,123.44 50,313.52 5,813,758.07 982,559,088.00 0.68
A Monroe 144,075,000.00 40,440,770.01 73,298,350.28 144,075,000.00 40,440,770.01 9,723,727.00 63,574,623.28 6,943,628,789.00 0.93
- New Brunswick 28,600,000.00 44,452,988.65 287,897,686.31 28,600,000.00 44,452,988.65 256,988,662.38 30,909,023.93 3,142,090,064.00 0.96
2 North Brunswick 51,976,000.00 57,095,785.53 78,812,769.00 51,976,000.00 57,095,785.53 14,816,079.55 63,996,689.45 4,842,813,026.00 1.38
3 Old Bridge 38,855,000.00 340,000.00 45,407,842.82 38,855,000.00 - - 45,747,842.82 7,251,509,936.00 0.66 Perth Amboy 11,015,000.00 82,543,137.45 122,186,653.61 11,015,000.00 82,543,137.45 723,803.76 121,462,849.85 3,563,020,522.00 3.17 Piscataway 27,280,000.00 9,366,621.70 93,535,000.00 27,280,000.00 9,366,621.70 - 93,535,000.00 6,303,319,577.00 1.44 Plainsboro - 27,123,616.21 49,072,895.27 - 27,123,616.21 1,577,957.71 47,494,937.56 3,862,927,824.00 1.27 Sayreville 49,020,000.00 24,732,993.39 31,983,573.41 49,020,000.00 24,732,993.39 2,074,000.00 29,909,573.41 4,957,651,853.00 0.53 South Amboy 155,000.00 - 23,972,784.00 155,000.00 - - 23,972,784.00 924,952,849.00 2.22 South Brunswick 77,967,000.00 52,528,250.00 64,440,956.39 77,967,000.00 52,528,250.00 - 64,440,956.39 8,180,563,654.00 0.83 South Plainfield 8,195,000.00 1,088,000.00 14,634,278.91 8,195,000.00 885,000.00 23,194.14 14,814,084.77 3,886,706,851.00 0.36 South River 13,094,000.00 35,477,618.68 22,504,399.71 13,094,000.00 35,477,618.68 - 22,504,399.71 1,451,000,973.00 1.67 Spotswood 9,405,000.00 5,155,000.00 4,690,639.34 9,405,000.00 1,643,960.00 - 8,201,679.34 830,202,326.00 0.88 Woodbridge 75,367,238.00 80,639,772.00 150,072,939.00 75,367,238.00 80,639,772.00 2,097,987 147,974,952.00 12,856,442,260.00 1.05
716,002,718.00 537,896,229.08 1,377,744,386.90 716,002,718.00 529,630,470.88 377,986,237.64 1,008,023,907.64 103,275,805,768.00 ______Source: Constituent Municipalities. 1 Statutory Deductions are utilized to reflect that portion which is not included in calculating the allowable statutory borrowing capacity of the local unit. It is not intended to reflect that such debt is payable from a source other than the local unit. However, certain statutory deductions consist of amounts such as proceeds of refunding bonds and other funds which can only be applied to debt service repayment.
MIDDLESEX COUNTY, NEW JERSEY 2013 AND 2014 BUDGETS
The Board of Chosen Freeholders introduced its 2013 County Budget on February 7, 2013. The 2013 Budget, as required by law, includes required payments of principal and interest on all outstanding bonds or notes of the County, including any lease payments/loan payments owed by the County.
SUMMARY OF 2013 AND 2014 BUDGETS 2013 2014 Budget Budget Revenues: (As Amended)
Surplus Anticipated $ - $ - State Aid, State Refunds, State Share of Costs & Federal Grants 56,115,540 18,800,031 Miscellaneous Fees, Rentals, Charges Earned by County 41,972,051 40,324,817 Interest on Investments and Deposits 74,383 74,300 Added and Omitted Taxes 1,017,731 371,183 Open Space Trust Fund 13,640,742 13,614,615 Amount to be Raised by Taxation-County Purpose Tax 336,685,000 348,338,454
TOTAL $449,505,447 $421,523,400
Appropriations:
General Government $99,750,410 $103,345,497 Utilities and Bulk Purchases 7,632,982 7,647,244 Judiciary 751,270 735,770 Regulation 28,305,088 26,242,335 Roads and Bridges 2,714,985 8,263,279 Correctional and Penal 40,819,658 40,334,588 Health and Welfare: Hospitals, Mental Health, Aged, etc. 30,379,923 30,203,318 Welfare Assistance and Administration 16,010,915 16,209,899 Education 42,932,525 43,480,317 Recreation 7,208,398 8,254,974 Unclassified 26,572,995 28,155,440 Other Local State & Federal Aid Programs 51,141,988 12,536,660 Contingent Fund 500,232 500,569 Capital Improvements 1,000,000 1,250,000 Debt Service 67,897,375 68,317,769 Deferred Charges and Statutory Expenditures 25,886,703 26,045,741 $449,505,447 $421,523,400
A-24
MIDDLESEX COUNTY, NEW JERSEY COMPARATIVE STATEMENT OF CURRENT FUND OPERATIONS AND CHANGE IN CURRENT FUND BALANCE
AS OF DECEMBER 31,
Audited Audited Unaudited 2011 2012 2013
Fund Balance January 1st $ 15,090,923 $ 18,084,247 $ 21,087,369
CURRENT REVENUE ON A CASH BASIS:
Current Taxes 320,093,000 328,466,000 336,685,000
Other Revenues and Additions to Income 105,965,012 106,245,936 119,395,070
Total Funds 441,148,935 452,796,183 477,167,439
EXPENDITURES AND TAX REQUIREMENTS:
Total Expenditures and Tax Requirements 423,064,688 431,708,814 449,505,447
FUND BALANCE DECEMBER 31st $ 18,084,247 $ 21,087,369 $ 27,661,992
______Source: Middlesex County 2011, 2012, and 2013 unaudited Financial Statements.
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MIDDLESEX COUNTY, NEW JERSEY 2013
CAPITAL BUDGET (Improvements and Equipment)
Project Title Amount Administration $6,926,000 Roads - Engineering 9,300,000 Bridges - Engineering 1,700,000 Road - Improvements 6,000,000 Parks 835,000 Education 8,300,000
TOTAL $ 33,061,000
______Source: County of Middlesex – 2014 Capital Budget.
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COUNTY OF MIDDLESEX, NEW JERSEY
PART I
INDEPENDENT AUDITOR'S REPORTS AND FINANCIAL STATEMENTS- REGULATORY BA_SIS
-1- HODULIK & MORRISON,P.A. CERTIFIED PUBLIC ACCOUNTANTS REGISTERED MUNICIPAL ACCOUNTANTS PUBLIC SCHOOL ACCOUNT ANTS 1102 RARITAN AVENUE, P.O. BOX 1450 HIGHLAND PARK, NJ 08904 (732) 393-1000 (732) 393-1196 (FAX)
ANDREW G. HODULIK, CPA, RMA, PSA MEMBERS OF: ROBERTS. MORRISON, CPA, RMA, PSA AMERICAN INSTITUTE OF CPA'S NEW JERSEY SOCIETY OF CPA'S REGISTERED MUNICIPAL ACCOUNTANTS OF N.J. JOANN BOOS, CPA, PSA
INDEPENDENT AUDITOR'S REPORT
Honorable Director and Members ofthe Board of Chosen Freeholders County ofMiddlesex New Brunswick, New Jersey 08903
Report on the Financial Statements
We have audited the accompanying balance sheets - regulatory basis of the various funds and governmental fixed assets of the County of Middlesex, New Jersey, as of and for the years ended December 31, 2013 and 2012 and the related statements of operations and changes in fund balance - regulatory basis for the years then ended and the related statement of revenues - regulatory basis and statement of expenditures - regulatory basis for the year ended December 31, 2013 and the related notes to the financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with the financial reporting provisions of the Division ofLocal Government Services, Department of Community Affairs, State of New Jersey. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to error or fraud.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and the audit requirements prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. _ 2 _ We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles
As described in Note 2, these financial statements were prepared in conformity with accounting practices prescribed or permitted by the Division of Local Government Services, Department of Community Affairs, State of New Jersey, United States of America, that demonstrate compliance with the modified accrual basis, with certain exceptions, and the budget laws of New Jersey, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. These prescribed principles are designed primarily for determining compliance with legal provisions and budgetary restrictions, and as a means of reporting on the stewardship of public officials with respect to public funds. Accordingly, the accompanying financial statements - regulatory basis are not intended to present financial position and results of operations in accordance with accounting principles generally accepted in the United States of America. The effect on the financial statements between these regulatory accounting practices and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.
Adverse Opinion on U.S. Generally Accepted Accounting Principles
In our opinion, because of the significance of the matter discussed in the "Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles" paragraph, the financial statements referred to in the first paragraph do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial positions ofthe County ofMiddlesex, New Jersey, as of December 31, 2013 and 2012, the changes in its financial position, or, where applicable, its cash flows for the year then ended.
Opinion on Regulatory Basis of Accounting
In our opinion, the financial statements - regulatory basis referred to above present fairly, in all material respects, the financial position - regulatory basis of the various funds and governmental fixed assets of the County of Middlesex, New Jersey as of December 31, 2013 and 2012 and the results of operations and changes in fund balance - regulatory basis for the year then ended and the related statements of revenues - regulatory basis and statements of expenditures - regulatory basis of the various funds for the year ended December 31, 2013, on the basis of accounting described in Note 2.
Other Matters
Other Information
Our audit was made for the purpose of forming an opinion on the financial statements of the County of Middlesex, New Jersey. The information included in Part II - Supplementary Schedules and Part III - Supplementary Data, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the financial statements of the County of Middlesex, New Jersey. The Part II - Supplementary Schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements, or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America, and in our opinion, the information is fairly stated, in all material respects, in relation to the financial statements - regulatory basis taken as a whole. The schedules and information contained in Part III - Supplementary Data have not been subjected to auditing procedures applied in the audit of the financial statements and, accordingly we do not express an opinion, or provide any assurance on them.
-3- Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report dated June 27, 2014 on our consideration of the County's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over fmancial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Accounting Standards and should be considered in asse~sing the results of our audit.
HODULIK & MORRISON, P.A. Certified Public Accountants Registered Municipal Accountants
Andrew G. Hodulik Registered Municipal Accountant No. 406
Highland Park, New Jersey June 27, 2014
-4- HODULIK & MORRISON, P .A. CERTIFIED PUBLIC ACCOUNTANTS REGISTERED MUNICIPAL ACCOUNTANTS PUBLIC SCHOOL ACCOUNTANTS 1102RARITAN AVENUE, P.O. BOX 1450 HIGHLAND PARK, NJ 08904 (732) 393-1000 (732) 393-1196 (FAX)
ANDREW G. HODUUK, CPA, RMA, PSA MEMBERS OF: ROBERTS. MORRISON, CPA, RMA, PSA AMERICAN INSTITliTE OF CPA'S NEW JERSEY SOCIEIT OF CPA'S REGISTERED MUNICIPAL ACCOUNTANTS OF NJ. JOANN BOOS, CPA. PSA
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Director and Members ofthe Board of Chosen Freeholders County of Middlesex New Brunswick, New Jersey 08903
We have audited, in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and audit requirements as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey, the financial statements -regulatory basis, of the County of Middlesex as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise the County of Middlesex's financial statements and have issued our report thereon dated June 27, 2014. Our report was modified because of the departure from accounting principles generally accepted in the United States of America as disclosed in Note 2 and was unqualified based upon the Other Comprehensive Basis of Accounting financial statements presentation.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the County of Middlesex's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the County of Middlesex's internal control. Accordingly, we do not express an opinion on the effectiveness of the County ofMiddlesex's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
-5- Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the County of Middlesex's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and audit requirements as prescribed by the Division of Local Government Services, Department of Community Affairs, State ofNew Jersey.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance, Accordingly, this communication is not suitable for any other purpose.
HODULIK & MORRISON, P.A. Certified Public Accountants Public School Accountants
Highland Park, New Jersey June 27,2014
-6- COUNTY OF MIDDLESEX, NEW JERSEY
FINANCIAL STATEMENTS- REGULATORY BASIS
-7- EXHIBIT A COUNTY OF MIDDLESEX, NEW JERSEY CURRENT FUND COMPARATIVE BALANCE SHEET- REGULATORY BASIS DECEMBER 31,2013 AND DECEMBER 31,2012
As of December 31, REF. 2013 2012 ASSETS
Regular Fund: Cash and Investments A-4 $ 76,166,067 $ 63,943,479 Cash - Change Fund Reserve 600 600 Local Grants Receivable A- 5 103,166 115,918 State and Federal Grants Receivable A-6 54,453,739 47,277,220
Total Regular Fund Assets 130,723,572 111 ,337,217
Receivables and Other Assets with Full Reserves: Inventory A-7 1,575,345 1,549,701 Added & Omitted Taxes Receivable A- 8 371,184 1,018,012 Revenue Accounts Receivable A- 9 557,779 308,027
Total Receivables and Other Assets with Full Reserves 2,504,308 2,875,740
Total Assets $ 133,227,880 $ 114,212,957
LIABILITlES, RESERVES AND FUND BALANCE
Regular Fund: Liabilities: Appropriation Reserves A-3,A-10 $ 11,286,415 $ 6,802,840 Reserve for Encumbrances A-ll 20,210,561 22,728,326 Accounts Payable A- 12 1,028,828 171,087 Payroll Deductions A-13 1,170,922 1,661,167 Unappropriated Reserves A- 15 164,881 182,919 Reserve for Local Grants: Appropriated A-14 3,280,565 2,467,513 Unappropriated A- 18 632,066 321,880 Reserve for Federal & State Grants: Appropriated A- 16 63,808,419 54,575,729 Unappropriated A- 17 1,175,436 1,338,386
Total Liabilities and Reserve for Grants 102,758,093 90,249,847
Reserve for Receivables Reserve 2,504,308 2,875,740 Fund Balance A- I 27,965,479 21,087,370
Total Liabilities, Reserves and Fund Balance $ 133,227,880 $ 114,212,957
See accompanying notes.
-8- EXHIBITA-1 COUNTY OF MIDDLESEX, NEW JERSEY CURRENT FUND COMPARATIVE STATEMENT OF OPERATIONS AND CHANGES IN FUND BALANCE- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
For the year ended December 31, REF. 2013 2012
Revenues: Miscellaneous Revenue Anticipated A- 2 $ 114,845,319 $ 102,547,965 Receipts from Current Taxes A- 2 336,685,000 328,466,000 Receipts from Added and Omitted Taxes A-2 1,407,959 910,477 Miscellaneous Revenues Not Anticipated A-2 2,743,848 1,839,228 Other Credits to Income: Unexpended Balance of Appropriation Reserves A- 10 210,000 889,064 Accounts Payable Cancelled A- 12 57,974 Federal & State Grants Appropriated- Cancellations (Net) A-16 94,418
Total Income 455,950,100 434,747,152
Expenditures: Budget Appropriations: Salaries and Wages A- 3 107,792,800 105,210,530 Other Expenses A- 3 195,261,273 186,660,731 Public and Private Programs A- 3 51,141,986 44,245,811 Debt Service A- 3 67,897,374 67,157,601 Capital Improvements A- 3 1,000,000 1,500,000 Deferred Charges and Statutory Expenditures A- 3 25,886,703 26,934,141 Other Debits to Income: Return of Prior Year Revenue A-4 30,632 Local Grants Receivable- Cancellations (Net) A- 5 35,215 Federal & State Grants Receivable- Cancellations (Net) A- 6 61,223
Total Expenditures 449,071,991 431,744,029
Excess in Revenue 6,878,109 3,003,123
Fund Balance, January 1 A 21,087,370 18,084,247
Fund Balance, December 31, A $ 27,965,479 $ 21,087,370
See accompanying notes.
-9- COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-2 CURRENT FUND PAGE 1 OF 7 STATEMENT OF REVENUES-REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2013
ADOPTED SPECIAL EXCESS REF. BUDGET N.J.S.40A:4-87 REALIZED (DEFICIT) Miscellaneous Revenues: Local Revenues: County Clerk A-9 $ 7,686,100 $ 8,639,445 $ 953,345 Surrogate A-9 645,200 480,652 (164,548) Sheriff A-9 748,600 747,822 (778) Fines A-9 288,900 241,079 (47,821) Interest on Invests. and Deposits A-9 141,510 74,389 (67,121) Mental Health Clinics: Medical Examiner- Shared Services A-9 185,700 283,703 98,003 State Share of Costs A-9 818,100 364,897 (453,203) Other Revenue A-9 1,576,200 1,576,200 Adult Correction Facility- Work Release Fees A-9 2,900 3,450 550 Adult Correction Facility Inmate Medical Co-Pay A-9 15,600 10,045 (5,555) Adult Correction Facility Inmate Processing Fees A-9 297,500 277,794 (19,706) Adult Correction Facility SSA Inmate Finders Fee A-9 37,200 47,800 10,600 Archives and Records Management Service Fees A-9 43,100 48,451 5,351 I A-9 211,000 399,732 188,732 ...... Bail Bond Forfeitures 0 Commissions Earned on Public Telephones in County Buildings A-9 507,500 480,662 (26,838) County Auction A-9 183,700 242,000 58,300 Custody Charges - State Inmates in County Institutions A-9 150,500 62,304 (88, 196) Discovery Fees and Reproduction Costs A-9 167,000 24,784 (142,216) Fire Academy Fees A-9 266,600 249,286 (17,314) MCIA Skating Rink A-9 123,500 96,115 (27,385) Microfilm and Printing Fees A-9 64,300 64,612 312 Municipal School District Share of Election Expense A-9 378,200 427,019 48,819 N.J. Department of Education-Child Nutrition Program A-9 70,900 58,008 (12,892) Parks Department- Fees and Permits A-9 361,300 328,018 (33,282) Plays in the Park Admissions A-9 183,700 148,748 (34,952) Property Rentals A-9 402,300 401,695 (605) Road Opening Fees A-9 87,400 116,084 28,684 Sale of Plans and Specifications A-9 29,200 34,239 5,039 Subdivision and Site Plan Review Fees A-9 374,100 517,100 143,000
State Aid: County College Bonds (N.J.S.A. 18:64A-22.6) A-9 1,795,440 1,795,440
State Assumption of Costs: Social and Welfare Services (C. 66, P.L. 1990): Supplemental Social Security Income A-9 1,352,596 1,294,745 (57,851) Psychiatric Facilities (C. 73, P.L. 1990); Board of County Patients in State and Other Institutions A-9 9,750 11,295 1,545 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBITA-2 CURRENT FUND PAGE 2 OF 7 STATEMENT OF REVENUES-REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2013
ADOPTED SPECIAL EXCESS REF. BUDGET N.J.S.40A:4-87 REAIJZED (DEFICIT) Federal and State Revenues Offset with Appropriations: Workforce - DHS A-6 $ 7,659,444 7,659,444
U.S. Department of Health and Human Services: Area Plan Grant - Program on Aging - Title III Federal A-6 2,869,841 2,169,034 5,038,875 HIV Emergency Relief Program A-6 2,567,313 2,567,313 Childhood Lead Poisoning Prevention A-6 130,000 130,000 Comprehensive Cancer A-6 142,800 142,800 FDA Voluntary Retail Food A-6 2,500 2,500
U.S. Department of Homeland Security: Advanced HazMat Training A-6 59,771 59,771 HazMat Emergency-Hazmat Training A-6 12,753 12,753 Interoperable Emergency Communications A-6 95,000 95,000 Buffer Zone Protection A-6 24,000 24,000
U.S. Department of Housing and Urban Development: """"' HMIS Housing & Urban A-6 185,748 185,748 """"' U.S. Department of Transportation: Subregional Transportation Planning A-6 150,960 150,960 Job Access Reverse Commute A-6 456,786 456,786
N.J. Department of Law & Public Safety: Division of Criminal Justice: ARRA Stop Violence Act A-6 33,482 33,482 Body Armor Replacement Program - Sheriff A-6 42,393 42,393 Delinquency Prev. Through Evidence Based Soc. Education A-6 83,145 83,145 Middlesex Cty Victim Assistance Program A-6 216,206 216,206 Victim Witness Advocacy - Supplement A-6 35,579 35,579
Division of Highway and Traffic Safety: New Freedom Grant A-6 387,517 387,517 Move Over Law Program A-6 74,850 74,850
Juvenile Justice Commission: Family Court Services A-6 253,853 253,853 Juvenile Assistance Incentive Block Grant A-6 24,074 24,074 Juvenile Detention Alt. (JDAI) A-6 120,000 120,000 Juvenile Education A-6 274,500 274,500 NJ Community Partnership Grant Program A-6 465,154 465,154 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-2 CURRENT FUND PAGE 3 OF7 STATEMENT OF REVENUES-REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2013
ADOPTED SPECIAL EXCESS REF. BUDGET N.J.S.40A:4-87 REALIZED (DEFICIT) Federal and State Revenues Offset with Appropriations (continued): Division of State Police: Don't Drink and Drive A-6 15,435 15,435 Edward Byrne Memorial A-6 18,082 18,082 Homeland Security- 13UASI A-6 721,956 721,956 Homeland Security Grant A-6 447,269 447,269 Insurance Fraud Reimb. A-6 133,040 133,040 Multi Jurisdictional NARC Task Force A-6 86,312 86,312 SART/SANE Project A-6 88,434 88,434 Sexual Assault Advocacy A-6 8,425 8,425
N.J. Department of Military & Veterans Affairs: Transport Disabled Veterans A-6 46,000 46,000
N.J. Department of Community Affairs: Recreation - Individuals with Disabilities A-6 20,000 20,000 Sexual Assault, Abuse and Rape A-6 138,967 138,967 1-' N N.J. Department of Education: North Brunswick -Title I Funds Compensatory Education A-6 248,462 248,462 Governor's Council on Alcoholism & Drug Abuse: Alliance to Prevent Alcohol & Drug Abuse A-6 745,452 372,726 1,118,178
N.J. Department of Environmental Protection: Clean Communities Program A-6 89,181 89,181 Environmental Health Act A-6 263,730 263,730 Recycling Enhancement Act - Interest A-6 462,238 462,238
N.J. Department of Health & Senior Services: Breast & Cervical Cancer Education & Early Detection A-6 834,000 834,000 CCPED Medical Waiver A-6 50,000 50,000 Home Care Services - Respite Program A-6 362,164 362,164 MC Area Wide S.H.I.P. Grant A-6 30,000 30,000 MC Medical Reserve Corp. A-6 4,000 4,000 Preparedness & Response for Bioterrorism A-6 479,402 479,402 Public Health Priority Funding - 1977 A-6 233,252 233,252 Special Child Early Intervention A-6 181,240 181,240 Tuberculosis Program A-6 189,846 189,846 Tuberculosis Program - State A-6 219,121 219,121 Worker and Community Right-to-Know Act A-6 18,119 18,119 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-2 CURRENT FUND PAGE40F7 STATEMENT OF REVENUES-REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2013
ADOPTED SPECIAL EXCESS REF. BUDGET N.J.S.40A:4-87 REALIZED (DEFICIT) N.J. Department of Human Services: Area Wide Transportation Grant A-6 195,000 195,000 DH & SS Caregiver Assistance Program A-6 100,000 195,000 295,000 DYFS -Community-Based Program- JINS A-6 798,894 798,894 DYFS - Residential Treatment Services A-6 700,000 700,000 DYFS - Services to the Homeless A-6 593,588 7,245,140 7,838,728 Human Services Council A-6 377,261 377,261 Personal Attendant Demonstration Project A-6 78,000 78,000 Senior Meals - SIBA A-6 52,000 52,000 Youth Incentive Program A-6 47,550 47,550
N.J. Transit Corporation: Senior Citizens & Disabled Res. Transportation Ass. A-6 1,758,329 19,860 1 ,778,189 NJ- Shuttle South Amboy A-6 227,634 227,634
N.J. Department of State- Division of Elections: Special Elections A-6 2,164,915 2,164,915 1-' CJ.J N.J. Department of Transportation: FY'l3 Federal Aid Highway A-6 7,833,956 7,833,956
N.J. Council on the Arts: Folk Art Program A-6 17,353 17,353 Local Arts Program A-6 163,864 163,864 N.J. Historical Commission Service A-6 134,591 134,591
Local Revenues Offset with Appropriations: Miscellaneous: Cranbury Brainerd Dam A-5 765,027 765,027 Fares, Donation & Adv. Transportation A-5 110,000 230,000 340,000 Interlocal Service Trans. Sayreville A-5 198,398 198,398 Interlocal Service Trans. Woodbridge A-5 366,983 366,983 Johnson & Johnson, New Brunswick A-5 33,000 33,000 MC Nutrition Client Fee A-5 50,000 190,000 240,000 MCUA- Solid Waste Mgmt Svcs. A-5 102,673 102,673 MCUA - Environmental Health A-5 329,460 329,460 Medicare County Multi Assist Cost Share Program A-5 36,000 65,000 101,000 North Brunswick Board of Education: Middlefields Program A-5 58,500 58,500 Plainfield Ave to J Field Ct. A-5 48,750 48,750 Respite Cost Share Program A-5 6,600 28,900 35,500 MC PetSmart Charities A-5 1,000 1,000 Hoes Sutphen - Piscataway A-5 57,000 57,000 Rte. 287 to Netherwood Ave. A-5 55,000 55,000 Wheaton - Puerto Rican Art A-5 4,250 4,250 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-2 CURRENT FUND PAGES OF7 STATEMENT OF REVENUES-REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2013
ADOPTED SPECIAL EXCESS REF. BUDGET N.J.S.40A:4-87 REALIZED (DEFICIT)
Miscellaneous Revenues: Open Space Trust Fund A-9 12,937,142 12,937,142 Lease Purchase BSS Building A-9 1,978,828 1,978,828
Other Special Items: Child Support Enforcement Program IV-D - Federal Aid: Courts and County Clerk A-9 420,100 434,982 14,882 Health Aid - Municipalities A-9 2,199,188 2,242,522 43,334 Intoxicated Driver Resource Center Fees A-9 313,000 313,000 Open Space Trust Fund - County Bonds A-9 703,600 703,600 Sheriff A-9 308,500 367,426 58,926 Added and Omitted Taxes A-8 1,017,731 1,018,012 281 Additional Revenue - County Clerk A-9 1,802,900 2,026,536 223,636 Additional Revenue - Sheriff A-9 520,200 519,673 (527) Additional Revenue - Surrogate A-9 506,900 377,655 (129,245) Capital Surplus A-9 34,448 34,448 1--' Capital Surplus- '97, '01& '02 MCIA Closeout A-9 355,739 355,739 """ Central Inventory Control A-9 3,500,000 3,295,357 (204,643) Civic Square II Lease I Purchase -New Brunswick Share A-9 861,228 861,228 Civic Square IV Refinancing Savings A-9 782,000 782,000 County Comm. Notification System A-9 30,000 (30,000) Debt Service- ER 1&2 MCC, Vo Tech and Mosquito Commission A-9 335,034 335,034 Division of Development Disabilities A-9 86,816 178,555 91,739 Extension Service - General Revenue A-9 27,000 20,612 (6,388) Extension Service - Solar Panels Revenue A-9 3,796 3,251 (545) Fire Marshall - Fire Prevention A-9 159,440 214,351 54,911 Fringe Benefits & Indirect Costs - State and Federal Grants A-9 1,900,600 1,836,426 (64,174) Office on Aging- State ofN.J. Grant A-9 20,000 20,000 Heidrich Conference Center Debt Service Reimbursement A-9 219,805 219,805 Long Term Management Agreement with M.C.I.A. Tamarack Golf Course A-9 250,000 250,000 MCIA Reimbursement- IT Services A-9 70,000 70,000 MCUA Franchise Fee A-9 3,500,000 3,500,000 Medicare - Part D A-9 516,408 462,241 (54,167) Mercer County- Youth Services A-9 1,686,069 2,231,150 545,081 Monmouth County Youth Detention A-9 2,611,044 2,513,127 (97,917) Municipal Agreements for Road Paving A-9 174,600 1,557,637 1,383,037 Premium on Bonds & BAN A-9 232,742 232,742 Prosecutor Salary (State Mandated) A-9 65,000 22,260 (42,740) COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-2 CURRENT FUND PAGE60F7 STATEMENT OF REVENUES-REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31,2013
ADOPTED SPECIAL EXCESS REF. BUDGET N.J.S.40A:4-87 REALIZED {DEFICIT) Other Special Items (continued): RBMHC - Partial Care Program A-9 49,712 46,578 (3,134) RBMHC - Raritan Bay Mental Health A-9 216,800 136,633 (80, 167) RCC Share of2006 MCIALease/Purchase A-9 119,584 119,584 RCC Share of2008 MCIA Lease/Purchase A-9 451,600 451,600 Shari Borden Annuity Remittance A-9 218,311 218,311 Somerset Cty Debt Service Share - Juvenile Detention Center A-9 511,954 511,954 Somerset Cty Share of Operations - Juvenile Detention Center A-9 597,948 620,253 22,305 State of N.J. Poll Worker Reimbursement A-9 610,608 612,681 2,073 Union County Shared Services - Health A-9 43,703 (43,703) State Criminal Alien Assistance Program (SCAAP) A-15 181,741 181,741
Total Miscellaneous Revenues A-1 74,276,000 38,544,447 114,845,319 2,024,872
Amount to be Raised by Taxation: County Purpose Tax A-l,A-8 336,685,000 336,685,000 .....I (J1 Budget Totals 410,961,000 38,544,447 451,530,319 2,024,872
Non-Budget Revenue: Added and Omitted Taxes A-l,A-8 1,407,959 1,407,959 Miscellaneous Revenue Not Anticipated A-l,A-2 2,743,848 2,743,848
Total Revenue $ 410,961,000 $ 38,544,447 $ 455,682,126 $ 6,176,679 = REF. A-3 A-3 A-1 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-2 CURRENT FUND PAGE 70F7 STATEMENT OF REVENUES-REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2013
ADOPTED SPECIAL EXCESS REF. BUDGET N.J.S.40A:4-87 REALIZED (DEFICIT) Non-Budget Revenue: Miscellaneous Revenue Not Anticipated: Other Fees: Garnishees $ 4,405 Autopsy Reports 8,617 Appeal Fees 2,100 Community Labor Fees -Adult Correction 11,625 Ranger User Fees 10,225 Copies 1,229 Vending Machines 11,036 Office on Aging 38,000 Health & Inspection Fees 115,364 Plan Performance Guarantee Retirement Fees 27,508 Sheriffs New Financial System 191,988 MCIA Rollerblade Rink 11,955 Misc. Other Fees 11,555 ,..... Reimbursements: 0\ 2012 Cam Charges Refund 10,860 County Fire Reimbursement 7,800 Hurricane Sandy 1,027,588 Misc. Other Reimbursement 3,066 Shared Services: NBHA New Brunswick Bus Transportation 131,926 Various Settlements: Presription Claim Litigation 340,925 Other Misc. Revenue not Anticipated: Prior Year Voids 8,470 TD Bank M.C. Tax Exempt GO Bonds 75,943 Administrative Office ofthe Courts 57,588 Payment in Lieu of Taxes 104,617 Close Various Accounts: Alcoholism Grants Write-off 54,916 M CIA Accounts 54,959 Drainage Accounts 293,491 Other Misc. Receipts 126,092
Miscellaneous Revenues Not Anticipated A-l,A-4 $ 2,743,848
See accompanying notes. COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-3 CURRENT FUND PAGE I OF 13 STATEMENT OF EXPENDITURES -REGULATORY BASIS FOR THEYEARENDEDDECEMBER31,2013
APPROPRIATIONS EXPENDED 2013 ADOPTED BUDGET AFTER BUDGET MODIFICATION EXPENDED ENCUMBERED RESERVED CANCELLED
GENERAL GOVERNMENT ADMINISTRATION AND EXECUTIVE: Board of Chosen Freeholders: Salaries and Wages $ 150,000 $ 143,100 $ 143,100 Other Expenses 28,320 3,120 2,254 $ 17 $ 849 County Administrator: Salaries and Wages 327,000 242,817 230,586 12,231 Other Expenses 26,505 25,805 24,008 492 1,305 Office of the Communication: Salaries and Wages 150,000 160,800 152,299 8,501 Other Expenses 5,000 2,300 336 309 1,655 Secretarial Help: Salaries and Wages 106,000 94,800 89,751 5,049 Advertising 2,000 2,000 764 103 1,133 Audit 88,000 88,000 88,000 Information Technology: 1-' Salaries and Wages 1,056,000 1,167,056 1,070,735 96,321 'l Other Expenses 2,023,733 2,485,933 1,567,053 517,309 401,571 Department of Real Estate: Salaries and Wages 387,000 379,982 360,469 19,513 Other Expenses 4,023,104 3,990,704 3,888,759 5,073 96,872 Department of Insurance: Salaries and Wages 86,000 88,314 81,556 6,758 Other Expenses 405 405 108 297 Department of Finance: Salaries and Wages 340,000 367,791 349,071 18,720 County Treasurer's Office: Salaries and Wages 452,000 459,636 441,900 17,736 Other Expenses 4,967 4,567 3,877 39 651 County Comptroller's Office: Salaries and Wages 955,000 1,007,523 941,351 66,172 Other Expenses 226,591 301,591 268,146 26,842 6,603 Legal Department: County Counsel: Salaries and Wages 910,000 933,672 886,221 47,451 Other Expenses 179,950 166,650 115,832 17,478 33,340 County Adjuster's Office: Salaries and Wages 344,000 367,002 345,476 21,526 Other Expenses 39,890 39,890 29,944 8,166 1,780 Clerk of the Board: Salaries and Wages 177,000 187,020 177,283 9,737 Other Expenses 50,150 49,750 14,124 35,222 404 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-3 CURRENT FUND PAGE2 OF 13 STATEMENT OF EXPENDITURES -REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31,2013
APPROPRIATIONS EXPENDED 2013 ADOPTED BUDGET AFTER BUDGET MODIFICATION EXPENDED ENCUMBERED RESERVED CANCELLED
GENERAL GOVERNMENT ADMINISTRATION AND EXECUTIVE (continued): Personnel Department: Salaries and Wages 611,000 646,479 612,842 33,637 Other Expenses 155,000 143,400 115,731 18,688 8,981 County Clerk: Salaries and Wages 1,487,000 1,547,973 1,459,775 88,198 Other Expenses 37,575 37,575 34,269 3,244 62 Prosecutor's Office: Salaries and Wages 17,120,000 16,669,200 15,796,005 873,195 Other Expenses 635,000 597,800 429,997 111,101 56,702 Purchasing Department: Salaries and Wages 1,041,000 977,600 929,678 47,922 Other Expenses 17,893 16,693 12,519 2,517 1,657 Public Property Salaries and Wages 1,516,000 1,434,527 1,360,920 73,607 f-" Other Expenses 3,254,760 3,369,760 3,338,487 27,532 3,741 00 Central Vehicle Maintenance and Repair: Salaries and Wages 432,000 757,514 649,218 108,296 Other Expenses 253,230 239,230 121,355 117,875 Parking Facilities Other Expenses 1,970,928 1,970,928 1,725,473 245,455 Office of Economic Development Salaries and Wages 185,000 213,100 199,831 13,269 Other Expenses 38,390 28,590 15,213 10,980 2,397 Economic Commissioner Other Expenses 9,800 Central Mail, and Reproduction: Salaries and Wages 637,000 649,705 614,818 34,887 Other Expenses 597,420 633,420 616,841 12,487 4,092 Div. Of Archives & Record Mgt. Salaries and Wages 451,000 467,884 443,054 24,830 Other Expenses 69,890 46,690 27,984 8,802 9,904 Insurance: Group Insurance Plan for Employees 50,882,016 50,882,016 48,718,294 1,702,019 $ 461,703 Worker's Compensation 3,916,235 3,741,235 3,741,235 Surety Bond Premiums 14,400 14,400 12,654 1,746 Other Insurance Premiums 2,514,500 1,414,500 1,404,729 9,771 Temporary Disability Insurance 150,000 150,000 140,705 9,295 State Unemployment Insurance 340,000 340,000 339,851 149
TOTAL GENERAL GOVERNMENT 100,475,652 99,750,447 94,046,481 934,047 4,308,216 461,703 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-3 CURRENT FUND PAGE30F 13 STATEMENT OF EXPENDITURES- REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31,2013
APPROPRIATIONS EXPENDED 2013 ADOPTED BUDGET AFTER BUDGET MODIFICATION EXPENDED ENCUMBERED RESERVED CANCELLED
JUDICIARY County Surrogate: Salaries and Wages 601,000 648,112 614,209 33,903 Other Expenses 24,908 24,908 21,911 956 2,041 Psychiatric and Legal Counsel Fees for Involuntary Civil Commitments (Admin. Office of the Court Rules 4:74-7): Salaries and Wages Other Expenses 56,250 ?§.~@_ .... !)4,~QQ_ 15,800 8,250
TOTAL JUDICIARY 682,158 751,270 690,320 16,756 44,194
UTILITIES & BULK PURCHASES Utilities 4,982,982 4,482,982 4,232,476 250,506 . Central Inventory Control 3,500,000 3,150,000 3,023,147 126,853 1-" \0 TOTAL UTILITIES & BULK PURCHASES 8,482,982 7,632,982 7,255,623 - 377,359
REGULATION Sheriffs Office: Salaries and Wages 18,203,000 18,785,000 17,723,369 1,061,631 Other Expenses 344,855 385,855 286,060 93,486 6,309 Weights and Measures Department: Salaries and Wages 63,000 103,079 64,787 38,292 Other Expenses 9,410 9,410 9,320 90 Board ofTaxation: Salaries and Wages 313,000 329,041 311,837 17,204 Other Expenses 10,585 10,585 9,828 595 162 County Medical Examiner: Salaries and Wages 1,180,000 1,385,796 1,298,626 87,170 Other Expenses 289,329 300,329 243,468 46,227 10,634 Board of Elections: Salaries and Wages 1,160,000 1,412,500 1,312,213 100,287 Other Expenses 1,506,600 2,864,315 2,606,903 158,892 98,520 Elections (County Clerk) Salaries and Wages 159,000 191,564 180,610 10,954 Other Expenses 607,950 948,650 847,448 7,114 94,088
Office of Emergency Management: Salaries and Wages 110,000 119,722 113,684 6,038 Other Expenses 17,420 14,220 7,833 1,019 5,368 COUNTY OF MIDDLESEX, NEW JERSEY EXHJBITA-3 CURRENT FUND PAGE40F 13 STATEMENT OF EXPENDITURES -REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2013
APPROPRIATIONS EXPENDED 2013 ADOPTED BUDGET AFTER BUDGET MODIFICATION EXPENDED ENCUMBERED RESERVED CANCELLED
REGULATION (continued): County Planning Board (R.S. 40:27-3) Salaries and Wages 1,344,000 1,409,902 1,308,171 101,731 Other Expenses 32,970 32,970 23,562 4,385 5,023 Construction Board ofAppeals Other Expenses 3,850 2,150 821 626 703
TOTAL REGULATION ~ 25,354,969 28,305,088 26,348,540 312,434 1,644,114
ROADS AND BRIDGES Highways and Bridges: Salaries and Wages 1,215,000 1,433,564 1,086,000 347,564 Other Expenses 773,793 733,793 692,002 41,537 254 Lighting of Highways and Bridges 70,000 70,000 59,117 10,883 Engineering Department: Salaries and Wages 303,000 429,400 263,892 165,508 Other Expenses 43,980 43,980 31,573 5,239 7,168 N 0 Bridge Maintenance: Other Expenses 4,248 4,248 3,781 467
TOTAL ROADS AND BRIDGES 2,410,021 2,714,985 2,136,365 46,776 531,844
CORRECTIONAL AND PENAL Adult Correction and Facility: Salaries and Wages 24,643,000 25,923,989 24,601,640 1,322,349 Other Expenses 8,507,450 8,207,450 6,829,483 1,243,817 134,150 Juvenile Detention Center: Salaries and Wages 5,515,000 5,476,686 4,863,577 613,109 Other Expenses 920,454 870,454 672,125 166,861 31,468 Office of Consumer Affairs Salaries and Wages 319,000 339,889 321,889 18,000 Other Expenses 1,190 1,190 1,021 68 101
TOTAL CORRECTIONAL AND PENAL 39,906,094 40,819,658 37,289,735 1,410,746 2,119,177 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBITA-3 CURRENT FUND PAGES OF 13 STATEMENT OF EXPENDITURES -REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31,2013
APPROPRIATIONS EXPENDED 2013 ADOPTED BUDGET AFTER BUDGET MODIFICATION EXPENDED ENCUMBERED RESERVED CANCELLED
HEALTH AND WELFARE Dept. of Public Safety & Health: Salaries and Wages 144,000 148,091 140,213 7,878 Other Expenses 7,350 2,250 257 1,993 Public Health Service - Interlocal Agreement: Salaries and Wages 2,731,000 2,934,620 2,692,102 242,518 Other Expenses 20,040 20,040 10,852 1,209 7,979 Environmental Health Act (CH. 443, P.L. I 977): Salaries and Wages 109,000 203,002 189,836 13,166 Other Expenses 33,800 33,800 29,943 3,857 Specially Challenged Children Salaries and Wages 978,000 1,001,591 947,268 54,323 Environmental Health Salaries and Wages 576,000 634,875 590,114 44,761 Other Expenses 58,570 52,570 37,225 11,920 3,425 Dept. of Community Services Salaries and Wages 204,000 141,500 131,700 9,800 N ..... Other Expenses 14,986 12,386 1,426 8,711 2,249 Haz Mat Division Salaries and Wages 950,000 1,003,300 911,317 91,983 Other Expenses 43,350 59,350 58,224 1,126 Raritan Bay Mental Health Clinic (N.J.S.A. 40:5-2.9): Salaries and Wages 4,795,000 4,894,075 4,470,592 423,483 Other Expenses 602,844 590,744 499,523 17,316 73,905 Raritan Bay Mental Health Center - Partial Care Program 40,375 40,375 31,426 8,782 167 Alcohol Services Other Expenses 152,494 152,494 109,623 32,733 10,138 Roosevelt Care Center: Other Expenses 7,500,000 7,500,000 7,500,000 Mental Health Administrator: Other Expenses 579,869 579,869 385,222 194,647 Aid to Middlesex County Unit- N.J. Association for Retarded Children (N.J.S.A. 40:23-8.11) 18,444 18,444 13.833 4,611 Social Hygiene Clinic: Salaries and Wages (7,720) 7,720 Other Expenses 15,050 15,050 8,417 3,460 3,173
Board of Social Services: Administration 13,577,197 13,577,197 13,577,197 Services 587,Q92 587,092 587,092 Assistance to Supplemental Security Income Recipients 1,352,596 1,352,596 1,352,596 Temporary Assistance for Needy Families 494,030 494,030 494,030 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-3 CURRENT FUND PAGE60F 13 STATEMENT OF EXPENDITURES -REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2013
APPROPRIATIONS EXPENDED2013 ADOPTED BUDGET AFTER BUDGET MODIFICATION EXPENDED ENCUMBERED RESERVED CANCELLED
HEALTH AND WELFARE (continued): War Veterans Burial and Grave Decorations: Other Expenses 41,033 41,033 41,033 MC Mid School After School 50,000 50,000 50,000 Department of Human Services: Salaries and Wages 778,000 843,714 787,306 56,408 Other Expenses 256,653 256,653 209,979 44,043 2,631 Home Care for the Elderly (N.J.S.A. 30:4D-3) Salaries and Wages 42,000 117,654 112,730 4,924 Other Expenses 1,308,760 1,308,760 993,915 298,101 16,744 Aid to Family and Children's Services of Central NJ, Inc. - Mosquito Extermination Commission (N.J.S.A. 26:9-13 et seq.) 2,450,399 2,450,399 2,450,399 Maintenance of Patients in State Institutions for Mental Diseases Local Share 3,308,406 3,308,406 3,308,406 MC Indigent Res. -Other County 400,000 900,000 799,276 100,724 Aid to Kiddie Keep Well Camp (N.J.S.A. 40:23-8.17) 88,215 88,215 66,161 22,054 Aid to New Brunswick Day Care Council, Inc. - N 65,028 65,028 48,771 16,257 N (N.J.S.A. 40:23-8.14) Aid to South County Day Care Center (N.J.S.A. 40:23-8.14) 12,074 12,074 6,037 6,037 Aid to Cerebral Palsy Association (N.J. S .A. 40:23-8 .II) 105,162 105,162 78,871 26,291 Bus Service- Board of Social Services Clients- Contractual Salaries and Wages 142,000 150,200 141,985 8,215 Other Expenses 28,000 28,000 28,000 Aid to South Brunswick Center for Independent Living 8,379 8,379 6,284 2,095 Aid to Women Aware Inc. (N.J.S.A. 40:23-8.14) 72,450 72,450 54,337 18,113 Aid to Middlesex Cty. Legal Services Corp. (N.J.S.A. 44:12-2) 85,145 85,145 63,858 21,287 Aid toMIPH 9,780 9,780 7,335 2,445 Aid to Edison Sheltered Workshop (N.J.S.A. 40:23-8.11) 21,980 21,980 16,485 5,495 Aid to Puerto Rican Action Bd. (N.J.S.A. 40:23-8.14) 93,963 93,963 68,905 25,058 Aid to Puerto Rican Association for Human Development (N.J.S.A. 40:23-8.14) 27,211 27,211 20,408 6,803 Aid to Child Assault Prevention Program 9,040 9,040 6,780 2,260 Aid to Jewish Family Service of Middlesex Cty. - (N.J.S.A. 40:5-2.9) 26,744 26,744 20,058 6,686 Aid to Anshe Emeth CDC 12,001 12,001 9,000 3,001 Big Brother Big Sister 12,500 12,500 9,375 3,125 Aid to Elijah's Promise 14,670 14,670 11,002 3,668 Laurel House 20,900 20,900 15,675 5,225 AidtoMCC 15,879 15,879 11,908 3,971 Aid to Salvation Army - Perth Amboy 29,335 29,335 22,001 7,334 Aid to Catholic Charity Diocese of Metuchen 95,271 95,271 71,454 23,817 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-3 CURRENT FUND PAGE 7 OF 13 STATEMENT OF EXPENDITURES ·REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31,2013
APPROPRIATIONS EXPENDED 2013 ADOPTED BUDGET AFTER BUDGET MODIFICATION EXPENDED ENCUMBERED RESERVED CANCELLED
HEALTH AND WELFARE (continued}: Interfaith Network Care 23,245 23,245 17,434 5,811 FISH Hospitality Program Inc. 19,669 19,669 14,751 4,918 Monarch Housing Association 18,000 18,000 13,500 4,500
TOTAL HEALTH AND WELFARE - 45,276,979 46,390,801 44,295,727 902,910 1,192,164 EDUCATION Office of County Superintendent ofSchoo1s: Salaries and Wages 286,000 302,522 286,725 15,797 Other Expenses 9,050 9,050 5,952 1,401 1,697 Vocational School 23,564,136 23,564,136 23,564,136 County Extension Services· Farm and Home Demonstrations: Salaries and Wages 415,000 462,672 437,307 ·• 25,365 Other Expenses 84,200 71,100 32,324 35,080 3,696 Middlesex County College 15,914,662 15,914,662 15,914,662 N C;J Reimbursement for Residents Attending Out-Of-County, Two-Year Colleges (N.J.S.A. 18A:64A-23) 325,000 325,000 122,356 202,644 Reimbursement for Residents Attending Out-Of-County, Vocational Schools (N.J.S.A. 18A:64A-23.4) 1,000 1,000 1,000 Middlesex County Heritage Commission (N.J.S.A. 40:33A-6): Salaries and Wages 488,000 521,466 490,097 31,369 Other Expenses 94,493 94,493 82,391 9,446 2,656 Fire Inspection Bureau: Salaries and Wages 120,000 156,226 146,359 9,867 Other Expenses 7,600 7,600 5,171 2,064 365 Fire Training Academy: Salaries and Wages 726,000 874,017 824,882 49,135 Other Expenses 347,185 333,285 274,760 51,963 6,562 East Jersey Olde Towns: Salaries and Wages 231,000 252,992 237,868 15,124 Other Expenses 42.~Q!L 42,305 . 29A.6:L 10,599 2,243
TOTAL EDUCATION 42,655,631 42,932,526 42,454,453 110,553 366,520 1,000
RECREATION County Parks Departroent: Salaries and Wages 5,791,000 6,055,322 5,544,772 510,550 Other Expenses 1,027,077 1,153,077 88M.!!!L 237,559 31,929
TOTAL RECREATION 6,818,077 7,208,399 6,428,361 237,559 542,479 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBITA-3 CURRENT FUND PAGES OF 13 STATEMENT OF EXPENDITURES - REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2013
APPROPRIATIONS EXPENDED 2013 ADOPTED BUDGET AFTER BUDGET MODIFICATION EXPENDED ENCUMBERED RESERVED CANCELLED
UNCLASSIFIED Solid Waste Management · Salaries and Wages (12,147) 12,147 Other Expenses 8,359 8,359 5,921 18 2,420 Garbage and Trash Removal (Contractual) 108,902 108,902 93,538 9,004 6,360 Aid to New Jersey Association of Correction (N.J.S.A. 40:23-8.19) 34,794 34,794 26,096 8,698 Matching Fund for Grants ~ 75,500 10,000 10,000 Cornelius Low House Museum 28,301 28,301 22,475 5,389 437 Supplemental Compensation at Retirement 500,000 500,000 500,000 Life Support Program - New Brunswick - Contractual 53,000 53,000 53,000 Intoxicated Driver Resource Center Fees 354,872 354,872 269,265 13,869 71,738 Employee Child Care 83,000 79,600 79,546 54 Aid to Keep Middlesex Moving, Inc. 14,500 Civic Square Ill Lease I Purchase 1,549,794 1,549,794 1,549,794 Civic Square II Lease I Purchase 1,484,863 1,484,863 1,484,862 COP Lease Purchase BBS Building 1,978,829 1,978,829 1,965,740 13,088 N ~ M.C. Improvement Authority- Capital Lease Purchase 3,393,584 3,393,584 3,356,064 37,519 Open Space Trust Bonds 12,937,142 12,937,142 12,937,142 Salaries and Wages 284,000 143,222 136,288 6,934 Other Expenses 91,474 91,474 86,773 3,383 1,318 Salary & Wage Adjustment 1,300,000 Civic Square IV Lease I Purchase 3,042,925 3,042,925 3,040,925 2,000 MCIA!Recycling Operation 773,334 773,334 773,334 -
TOTAL UNCLASSIFIED ~097,173 26,572,995 26,368,616 40,361 101,411 62,607
PUBLIC AND PRIVATE PROGRAMS OFFSET BY REVENUES Work Force Investment Act 2,887,325 2,887,325 Work first REDI Grant 159,013 159,013 Work first - NJ Grants 2,177,406 2,177,406 Work first- Transportation Services 211,890 211,890 Dislocated Workers 2,223,810 2,223,810
U.S. Dept. of Homeland Security & Preparedness FEMA: Buffer Zone Protection Program 24,000 24,000 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-3 CURRENT FUND PAGE90F 13 STATEMENT OF EXPENDITURES -REGULATORY BASIS. FOR THE YEAR ENDED DECEMBER 31, 2013
APPROPRIATIONS EXPENDED 2013 ADOPTED BUDGET AFTER BUDGET MODIFICATION EXPENDED ENCUMBERED RESERVED CANCELLED
PUBLIC AND PRIVATE PROGRAMS OFFSET BY REVENUES (continued): U.S. Dept. of Housing & Urban Development: Middlesex County HMIS 185,748 185,748
U.S. Dept. of Health and Human Services: Comprehensive Cancer Control 130,800 130,800 Chronic Disease Self Management 12,000 12,000 Middlesex County Medical Reserve Corp. 4,000 4,000 FDA Voluntary Retail Food Program Standards Initiative 2,500 2,500 Senior Meals of Middlesex County 1,605,192 2,376,904 2,376,904 Area Plan Grant for Program on Aging - Title III 2,231,586 3,628,908 3,628,908 HIV Emergency Relief Program 2,567,313 2,567,313 Childhood Lead Poisoning Prevention 130,000 130,000
U.S. Dept. ofTransportation: Sub Regional Transportation Planning 150,960 150,960 150,960 Job Access Reverse Commute 456,786 456,786 ~ N.J. Dept of Law and Public Safety: Division of Highway and Traffic Safety: Don't Drink and Drive 15,435 15,435 SART/SANE Project 74,796 74,796 MC Comprehensive Traffic Safety 74,850 74,850
Division of Criminal Justice: Body Armor Replacement Program - Corrections 21,341 21,341 21,341
Body Armor Replacement Program - Prosecutors 6,717 6,717 6,717 Body Armor Program - Sheriff 14,335 14,335 14,335 Victim Assistance Project 216,206 216,206 216,206 Victim Witness Advocacy - Supplement 35,579 35,579 35,579 ARRA Stop Violence Grant 33,482 33,482 Interoperable Emergency Comm. 95,000 95,000 Delinquency Prev. Through Evidence Based Sic. Learning 83,145 83,145 83,145
Juvenile Justice Commission: Juv. Justice Detention Education 531,000 531,000 531,000 State/Community Partnership Grant Program 465,154 465,154 465,154 Family Court Service 253,853 253,853 253,853 Juvenile Incentive Block Program 26,749 26,749 26,749
Homeland Security Grant 447,269 447,269 Urban Area Homeland Security FY 08 721,956 721,956 HazMat Emergency-Hazmat Training 12,753 12,753 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-3 CURRENT FUND PAGE lOOF 13 STATEMENT OF EXPENDITURES -REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2013
APPROPRIATIONS EXPENDED 2013 ADOPTED BUDGETAFTER BUDGET MODIFICATION EXPENDED ENCUMBERED RESERVED CANCELLED
PUBLIC AND PRIVATE PROGRAMS OFFSET BY REVENUES (continued): Division of State Police: Advanced HazMat Training 59,771 59,771 ARRA - Stop Violence 13,638 13,638 Edward Byrne Memorial Justice Assistance Grant 18,082 18,082 Insurance Fraud Reimb. 133,040 133,040 Multi Jurisdictional NARC Task Force 86,312 86,312 Sexual Assault Advocacy 8,425 8,425
N.J. Department of Community Affairs: MC Youth Services Title I 248,462 248,462 248,462
N.J. Department of Community Affairs: Sexual Assault, Abuse and Rape 138,967 138,967 Recreation - Individuals with Disabilities 27,000 27,000 Juvenile Detention Alternative (JDAI) 120,000 120,000 120,000
N.J. Department of Environmental Protection: ~ Clean Communities Program 89,181 89,181 Solid Waste Service Fund 462,000 462,000 Recycling Enhancement Act - Interest 238 238 Environmental Health Act 740,930 740,930 740,930
N.J. Department of Health & Senior Services: Tuberculosis Program 189,846 189,846 189,846 MC Area Wide S.H.I.P. Grant 30,000 30,000 PH-Preparation & Response - Bioterror 479,402 479,402 Area Wide Transportation Grant 1,194,312 1,194,312 1,194,312 DYFS- Services to the Homeless 593,588 7,838,728 7,838,728 Public Health Priority Funding 233,252 233,252 233,252 DYFS- Home Care Services- Respite Program 362,164 362,164 362,164 DYFS -Residential Treatment Services 700,000 700,000 700,000 DH & SS Caregiver Assistance Program 100,000 295,000 295,000 Worker and Community Right to Know Act 18,119 18,119 18,119 Breast & Cervical Cancer Education & Early Detection 834,000 834,000 DYFS - Maintenance ofChildren in Institutions - JINS 798,894 798,894 798,894 Youth Incentive Program 47,550 47,550 47,550 Human Services Council 433,006 433,006 433,006 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBITA-3 CURRENT FUND PAGE 11 OF 13 STATEMENT OF EXPENDITURES -REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2013
APPROPRIATIONS EXPENDED 2013 ADOPTED BUDGET AFTER BUDGET MODIFICATION EXPENDED ENCUMBERED RESERVED CANCELLED
PUBLIC AND PRIVATE PROGRAMS OFFSET BY REVENUES (continued): N.J. Department of Health & Senior Services (continued): Personal Attendant Demonstration Project 78,000 78,000 78,000 JACC- Program 50,000 50,000 Early Intervention Service Coordination 181,240 181,240 Senior Meals - SffiA 52,000 52,000 Tuberculosis Control Program 219,121 219,121
Governor's Council on Alcoholism and Drug Abuse: Drug Enforcement Demand Reduction Fund 745,452 1 ,118,178 1,118,178
N.J. Transit: Comprehensive Traffic Safety Program Senior Citizens & Disabled Res. Transportation Ass. 1,758,329 1,778,189 1,778,189
N.J. Department of Transportation New Freedom Grant 227,634 227,634 t:ij FY' 13 Federal Aide Highway - New Brunswick Bikeway 7,833,956 7,833,956 New Freedom Grant 387,517 387,517
N.J. Council on the Arts: Local Arts Program 208,864 208,864 Folk Art Program 22,353 22,353 N.J. Historical Commission Service 143,091 143,091
N.J. Department of Defense: Transport Disabled Veterans 46,000 46,000
Local Revenue Miscellaneous: Johnson & Johnson, New Brunswick 33,000 33,000 Plainfield Ave to John Field Court 48,750 48,750 Fares, Donation & Adv. Transportation 110,000 340,000 340,000 MCIA- Paint Recycling Program 102,673 102,673 102,673 Respite Cost Share Program 765,027 765,027 Wheaton- Puerto Rican.Folk Arts 4,250 4,250 North Brunswick Board of Education Middlefield's Program 58,500 58,500 58,500 Middlesex Cty Multi-Assist Cost Share Program 36,000 101,000 101,000 Respite Cost Share Program 6,600 35,500 35,500 MCUA- Environmental Health 329,460 329,460 329,460 MC Nutrition Client Fee 50,000 240,000 240,000 Interlocal Service Trans. Sayreville 198,398 198,398 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-3 CURRENT FUND PAGE 120F 13 STATEMENT OF EXPENDITURES -REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2013
APPROPRIATIONS EXPENDED 2013 ADOPTED BUDGET AFTER BUDGET MODIFICATION EXPENDED ENCUMBERED RESERVED CANCELLED
PUBLIC AND PRIVATE PROGRAMS OFFSET BY REVENUES (continued}: Local Revenue Miscellaneous (continued): Interlocal Service Trans. Woodbridge 366,983 366,983 Improvements to River Rd. {Hoes Lane to Sutphen} 57,000 57,000 Improvements to Rt. 287 to Netherwood Ave. 55,000 55,000 PetS mart Charities for Middlesex County 1,000 1,000
~ TOTAL PUBLIC AND PRIVATE PROG. OFFSET BY REVENUES 14,696,95,i_ 51,141,986 51,141,986
Total Operations 314,856,690 354,221,137 338,456,207 4,012,142 11,227,478 525,310
Contingent 500,232 500,232 360,861 132,528 6,843
Total Operations Including Contingent 315,356,922 354,721,369 338,817,068 4,144,670 11,234,321 525,310
N Detail: 00 Salaries & Wages 105,138,000 107,792,800 100,600,037 7,192,763 Other Expenses (Including Contingent) 210,218,922 246,928,569 238,217,031 4,144,670 4,041,558 525,310
CAPITAL IMPROVEMENTS Capital Improvement Fund 1,000,000 1,000,000 1,000,000
TOTAL CAPITAL IMPROVEMENTS 1,000,000 1,000,000 1,000,000
COUNTY DEBT SERVICE Payment of Bond Principal: County College Bonds 4,790,000 4,790,000 4,790,000 State Aid-County College Bonds (N.J.S. 18A:64A-22.6) 1,305,000 1,305,000 1,305,000 Vocational School Bonds 3,860,000 3,860,000 3,860,000 Open Space Bonds 605,000 605,000 605,000 Other Bonds 32,705,000 32,705,000 32,705,000 MCIA Bond Principal 9,001,799 9,001,799 9,001,799 Payment of Refunding Notes Principal: Interest on Bonds: County College Bonds 1,040,091 1,040,091 1,040,091 State Aid-County College Bonds (N.J.S. 18A:64A-22.6) 490,441 490,441 490,441 Vocational School Bonds 965,645 965,645 965,645 Other Bonds 11,258,551 11,258,551 11,258,551 Open Space Bonds 98,600 98,600 98,600 MCIA Bond Interest 849,191 849,191 849,191
Interest on Notes 259,120 259,120 259,120 Paydown on Notes 604,000 604,000 604,000 COUNTY OF MIDDLESEX, NEW JERSEY EXHIBIT A-3 CURRENT FUND PAGE 13 OF 13 STATEMENT OF EXPENDITURES -REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31,2013
APPROPRIATIONS EXPENDED 2013 ADOPTED BUDGET AFTER BUDGET MODIFICATION EXPENDED ENCUMBERED RESERVED CANCELLED
COUNTY DEBT SERVICE (continued}: Green Trust Loan Program: Loan Repayment for Principal and Interest 64,937 64,937 64,936
TOTAL COUNTY DEBT SERVICE 67,897,375 67,897,375 67,897,374
DEFERRED CHARGES Prior Year Bills: 279,536 279,536 279,536
STATUTORY EXPENDITURES Contributions To: Defined Contribution Retirement Plan 13,000 13,000 12,712 288 Public Employees' Retirement System 7,926,913 7,926,913 7,926,913 Social Security System (O.A.S.I.) 10,000,000 9,180,000 9,128,194 ·- 51,806 Police and Firemen's Retirement System 8,487,254 8,487,254 8,487,254 I N \0 TOTAL DEFERRED CHARGES AND STATUTORY EXPENDITURES 26,706,703 25,886,703 25,834,609 - 52,094
TOTAL GENERAL APPROPRIATIONS $ 410,961,000 $ 449,505,447 $ 433,549,051 $ 4,144,670 $ 11,286,415 $ 525,311
REF. A-2 A-1 A-I,A-11 A,A-1
REF.
Budget A-2 $ 410,961,000 Added By 40A:4-87 A-2 38,544,447
$ 449,505,447
Cash A-4 $ 382,407,065 Transferred to: Reserve for Federal and State Grants Appropriated A-16 48,405,445 Reserve for Local Grants Appropriated A-14 2,736,541
$ 433,549,051 See accompanying notes. EXHIBITB COUNTY OF MIDDLESEX, NEW JERSEY TRUST FUND COMPARATIVE BALANCE SHEET-REGULATORY BASIS DECEMBER 31,2013 AND DECEMBER 31,2012 As of December 31, REF. 2013 2012 ASSETS Cash and Investments B- 1 $ 60,543,886 $ 58,446,607 Motor Vehicle Fines B- 2 551,598 516,094 Federal Aid Receivable: Housing and Community Development Act 1974 B- 3 8,359,983 4,864,288 Federal Aid Receivable- Section 8 Housing Assistance Payments Pro g. B- 4 3,701 8,416 State Aid Receivable: Alcoholism Rehabilitation Program B- 5 606,416 752,411 Section 8 Housing Assistance Prepayments B- 6 636,665 684,162 Receivable from MCIA Open Space Receipts B- 7 24,467,783 23,639,122 Community Development Block Grant: Urban Housing Preservation Program Loans - Mortgages Receivable B- 28 1,619,851 1,687,152 Open Space Program Receivable B- 33 32,021 94,370 Total Assets $ 96,821,904 $ 90,692!622 LIABILITIES, RESERVES AND FUND BALANCE Reserve for Motor Vehicle Fines Receivable B- 2 $ 551,598 $ 516,094 Motor Vehicle Fines - Road Fund B- 8 1,398,546 35,124 Reserve for Encumbrances B- 9 34,474,695 35,126,075 Performance and Escrow Deposits B- 10 2,783,395 2,679,967 Reserve for Road Drainage Project B-ll 707,007 926,243 Worker's Compensation Self-Insurance Fund B- 12 1,726,830 973,856 Supplemental Compensation at Retirement B -13 143,104 62,042 Unemployment Compensation Fund B- 14 120,569 Reserve for Alcoholism Rehabilitation Program B- 15 30,339 158,099 Reserve for Housing and Community Development Expenditures B- 16 5,010,514 395,299 Reserve for CDBG Funds on Hand B- 17 227,246 222,727 Rental Rehabilitation Program B- 18 26,812 26,812 Reserve for Section 8 Housing Assistance Payments Program B- 19 538,005 721,288 Road Opening Bonds B- 21 1,719,678 1,339,828 Self-Insurance Liability Trust Fund B-22 3,393,926 4,378,392 Miscellaneous Trust Accounts B- 23 7,466,136 8,812,645 Dedicated Revenue by Statute B- 24 934,400 1,013,858 Prosecutor's Office - Dedicated Funds B- 25 2,226,746 2,447,788 State Seized Assets B- 26 2,700,982 2,639,753 Reserve for Debt Service - Open Space and Farmland Preservation B -27 13,614,615 13,640,742 Reserve for Urban Housing & Preservation Program Loans B- 28 1,619,851 1,687,152 Reserve for BSS Building Lease Purchase Payments B- 29 670,388 670,388 Escheated Seized Funds B- 30 7,089 7,089 Reserve for Refundable Consumer Affairs Deposits B- 31 90,536 76,551 Environmental Quality B- 32 492,671 262,814 Reserve for Open Space Program Receivable B- 33 32,021 94,370 Reserve for Open Space and Farmland Preservation B- 34 14,100,592 11,764,013 Reserve for Bonds and Interest Trust Payable B- 35 13,613 13,613 Total Liabilities, Reserves and Fund Balance $ 96,821,904 $ 90,692,622
See accompanying notes.
-30- EXHIBITC COUNTY OF MIDDLESEX, NEW JERSEY GENERAL CAPITAL FUND COMPARATIVE BALANCE SHEET- REGULATORY BASIS DECEMBER 31, 2013 AND DECEMBER 31, 2012
As ofDecember 31, REF. 2013 2012 ASSETS
Cash and Investments C- 2 $ 19,301,906 $ 23,574,625 Leases Receivable C-5 12,568,104 13,339,118 Loans/Other Accounts Receivable C-22 13,009,853 13,677,181 Deferred Charges to Future Taxation: Funded C-6 386,502,000 382,407,000 Funded Loans C-6 33,452,713 34,318,773 Funded - Capital Leases C-6 212,220,638 225,277,430 Unfunded C-7 302,461,375 257,657,545
Total Assets $ 979,516,589 $ 950,251 ,672
LIABILITIES, RESERVES AND FUND BALANCE
General Serial Bonds C-8 $ 318,696,000 $ 310,414,000 General Serial Bonds -M.C.C. E.F.A. C-9 395,000 770,000 County College Bonds C-10 24,710,500 26,370,000 County College Bonds (Ch. 12, P.L. 1971) C-11 14,220,500 14,770,000 Vocational School Bonds C-12 26,620,000 27,618,000 Bond Anticipation Notes C-13 35,000,000 47,281,000 Open Space Bonds C-14 1,860,000 2,465,000 Capital Leases Payable C-21 212,220,638 225,277,430 Green Acres Loan Payable C-20 5,179,455 5,714,322 MCIA Loans Payable C-23 28,273,258 28,604,451 Improvement Authorizations: Funded C-15 41,031,655 40,122,675 Unfunded C-15 167,350,653 112,705,640 Capital Improvement Fund C-16 35,072 35,072 Reserve For: Payment of Debt Service C-4 859,068 1,077,379 Leases Receivable C-5 12,568,104 13,339,118 Bond Issue Costs C-17 496,624 615,756 Encumbrances C-18 76,389,241 77,112,237 Loans/Other Accounts Receivable C-22 13,009,853 13,677,181 Payment of BAN's C-19 877,482 Fund Balance C-1 600,968 1,404,929
Total Liabilities, Reserves and Fund Balance $ 979,516,589 $ 950,251 ,672
Bonds and Notes Authorized but not Issued C-24 $ 267,461,375 $ 210,376,545
See accompanying notes.
-31- EXHIBITC-1 COUNTY OF MIDDLESEX, NEW JERSEY GENERAL CAPITAL FUND STATEMENT OF FUND BALANCE - REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31,2013
Balance- December 31, 2012 c $ 1,404,929
Increased by: Premium on Sale of Bonds and BANs C-2 600,968 MCIA Loan Ordinance Premium C-2 437,541
1,038,509 Total Available 2,443,438
Decreased by: Anticipated Revenue Realized in Current Fund C-2 1,404,929 Transfer to Fund Unfunded Ordinance C-7 437,541 1,842,470
Balance- December 31, 2013 c $ 600,968
See accompanying notes.
-32- EXHIBITD COUNTY OF MIDDLESEX, NEW JERSEY GOVERNMENTAL FIXED ASSET STATEMENT OF GOVERNMENTAL FIXED ASSETS DECEMBER 31, 2013
As ofDecember 31, 2013 GOVERNMENTAL FIXED ASSETS: Land $ 350,768,557 Buildings and Improvements 295,652,395 Machinery and Equipment 26,702,849 Moving Vehicles 32,414,792 MCIA Lease Purchase Agreements Moving Vehicles 6,241,730 MCIA Lease Purchase Agreements 17,703,023 MCIA Capital Improvement/Construction Fund 14 787 545
Total Governmental Fixed Assets $ 744,270,891
Investments in Governmental Fixed Assets $ 744,270,891
See Accompanying Notes
-33- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
1) FORM OF GOVERNMENT
The County ofMiddlesex is governed by a seven member Board of Chosen Freeholders who are elected for terms of three years. The Board operates under the commission form of government. Professional department heads in County government are appointed by the Board and are responsible to the chairperson and the committee charged with the specific operation. The County follows the Civil Service merit system of employment and the Freeholder Board abides by the regulations of the New Jersey Civil Service Commission.
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
GASB Statement No. 14 established the GAAP criteria to be used to determine which component units should be included in the financial statements of the oversight entity. As set forth by the accounting principles and practices prescribed by the Division of Local Government Services, Department of Community Affairs, and State of New Jersey, as noted below, the financial statements of the County of Middlesex are reported separately.
The financial statements of the County of Middlesex includes every board, body, officer or commission supported and maintained wholly or in part by funds appropriated by the County, as required by the provisions of N.J.S.A. 40A: 5-5. The financial statements, however, do not include the operations of Middlesex County Joint Health Insurance Fund, the County College, the Vocational Schools, the Board of Social Services, the Utilities Authority, the Mosquito Commission and the Improvement Authority which are subject to separate examination. Moreover, the assets, liabilities and reserves of the County's constitutional offices and other various departments, including the Office of the County Clerk, Surrogate's Office, Sheriff's Office, Mental Health Clinics, Adult Correction Center and Office of the County Adjuster which result from the specific activity of the individual office or department and are subject to separate audit, are not combined with the financial statements of the County of Middlesex.
Description of Funds
The accounting policies of the County of Middlesex conform to the accounting principles and practices applicable to municipalities and counties which have been prescribed by the Division of Local Government Services, Department of Community Affairs, and State of New Jersey. Such principles and practices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the County of Middlesex accounts for its financial transactions through the following separate funds:
Current Fund Represents resources and expenditures for governmental operations of a general nature, including Federal, State and Local grant funds, except as otherwise noted.
Trust Fund Represents receipts, custodianship and disbursement of funds in accordance with the purpose for which each reserve was created, pursuant to the provisions ofN.J.S.A. 40A: 4-39.
-34- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Description of Funds (cont'd)
General Capital Fund Represents resources, including Federal and State Grants in aid of construction, and expenditures for the acquisition of general capital facilities, other than those acquired through the Current Fund, including the status of bonds and notes authorized for said purposes.
Governmental Fixed Assets Accounts for fixed assets are used in governmental fund type operations for control purposes. All fixed assets are valued at historical cost or estimated historical cost if actual historical cost is not available or any other reasonable basis, provided such basis is adequately disclosed in the financial statements. Donated fixed assets are valued at their estimated fair value on the date of donation. No depreciation is recorded on governmental fixed assets.
The Governmental Accounting Standards Board (GASB) is the accepted standards-setting body for establishing governmental accounting and financial reporting principles. GASB's Codification of Governmental Accounting and Financial Reporting Standards and subsequent GASB pronouncements are recognized as U.S. generally accepted accounting principles (GAAP) for state and local governments. GAAP provides for the issuance of entity-wide financial statements along with the presentation of separate fund financial statements that differ from the organization of funds prescribed under the regulatory basis of accounting utilized by the County. The resultant presentation of financial position and results of operations in the form of financial statements is not intended to present the basic financial statement presentation required by GAAP.
Basis of Accounting
Basis of Accounting and Measurement Focus - The basis of accounting as prescribed by the Division of Local Government Services for its operating funds is generally a modified cash basis for revenue recognition and a modified accrual basis for expenditures. The operating funds utilize a "current financial resources" measurement focus. The accounting principles and practices prescribed for municipalities and counties by the Division differ in certain respects from generally accepted accounting principles (GAAP) applicable to local government units. The most significant is the reporting of entity-wide financial statements, which are not presented in the accounting principles prescribed by the Division. The other more significant differences are as follows:
Revenues Revenues are recorded as received in cash except for statutory reimbursements and grant funds, which are due from other governmental units. Federal and State grants, entitlements and shared revenues received for operating purposes are realized as revenues when anticipated in the County budget. Receivables for property taxes are recorded with offsetting reserves within the Current Fund. Other amounts that are due to the County which are susceptible to accrual are recorded as receivables with offsetting reserves. These reserves are liquidated and revenues are recorded as realized upon receipt of cash. GAAP requires the recognition of revenues for general operations in the accounting period in which they become available and measurable.
-35- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Basis of Accounting (cont'd)
Expenditures
For purposes of financial reporting, expenditures are recorded as "paid or charged" or "appropriation reserves". Paid or charged refers to the County "budgetary" basis of accounting. Generally, these expenditures are recorded when an amount is encumbered for goods or services in conjunction with the encumbrance accounting system. Reserves for unliquidated encumbrances at the close of the year are reported as a cash liability. Encumbrances do not constitute expenditures under GAAP. Appropriation reserves refer to unexpended appropriation balances at the close of the year. Appropriation reserves are automatically created and recorded as a cash liability, except for amounts, which may be cancelled by the governing body. Appropriation reserves are available until lapsed at the close of the succeeding year, to meet specific claims, commitments or contracts incurred and not recorded in the preceding fiscal year. Lapsed appropriation reserves are recorded as income.
Generally, unexpended balances of budget appropriations are not recorded as expenditures under GAAP. For the purpose of calculating the results of Current Fund operations, the regulatory basis of accounting utilized by the County requires that certain expenditures be deferred, and raised as items of appropriation in budgets of succeeding years. These deferred charges include the two general categories of over expenditures and emergency appropriations. Over expenditures occur when expenditures recorded as "paid or charged" exceed available appropriation balances. Emergency appropriations occur when, subsequent to the adoption of a balanced budget, the governing body authorizes the establishment of additional appropriations based on unforeseen circumstances or for other special purposes as defined by statute.
Compensated Absences The County records expenditures for earned, but unused vacation and sick leave in the accounting period that the payments are made to the employee pursuant to established personnel policy procedures. GAAP requires that expenditures be recorded in the governmental (Current) fund in the amount that would normally be liquidated with available financial resources, and that expenditures be recorded in the enterprise fund on a full accrual basis.
Inventories of Supplies The cost of inventories of supplies for all funds is recorded as expenditures at the time individual items are purchased. The cost of inventories is included on the Current Fund balance sheet, for inventory that has been established and reported at year-end with an offsetting reserve. Although the expenditure method of accounting for purchases of supplies is in accordance with GAAP, the cost of inventory on hand at the close of the year should be reported on the balance sheet with an offsetting reserve for conformity with GAAP.
Lease Purchase Agreements The County's participation in lease purchase agreements are reflected by the annual appropriation of minimum lease payments within the County's operating budgets. The terms of the lease, including total future minimum lease payments are disclosed in the Notes to Financial Statements. Capital lease amounts payable are recorded within the General Capital Fund. GAAP requires the value of the lease purchase agreement to be recorded in the Capital Projects Fund and the recording of the non-current lease payments in the Debt Service Fund.
-36- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Basis of Accounting (cont'd)
Self Insurance Reserves Charges to self-insurance reserves are recorded when payments of claims and related expenses are made. Increases to self-insurance reserves are recorded from budgetary appropriations in the accounting period in which budgetary expenditures are recorded. Earnings on investments and miscellaneous reimbursements are credited to reserves when received in cash. GAAP requires that liabilities for incurred claims are recorded as determined actuarially, and that operating transfers to self-insurance funds not exceed the amount determined.
Interfunds Interfund receivables in the Current Fund are recorded with offsetting reserves, which are created by charges to operations. Income is recognized in the year receivables are liquidated. GAAP does not require the establishment of an offsetting reserve. Interfund receivables in the other funds are not offset by reserves.
Fixed Assets Property and equipment acquired by the Current and the General Capital Funds are recorded as expenditures at the time of purchase and are not capitalized in their own respective funds. Such assets are recorded at cost in the Governmental Fixed Assets. The values of County owned assets acquired prior to the implementation of the fixed asset accounting system were recorded at cost, estimated cost, estimated replacement value and assessed valuation for real property. Depreciation is not recorded as an operating expense of the general government (Current Fund).
Governmental Fixed Assets New Jersey Administrative Code 5:30-5.6, previously identified as Technical Accounting Directive No. 85- 2, issued by the Division of Local Government Services, Department of Community Affairs, State ofNew Jersey, established a mandate for fixed asset accounting by municipalities and counties, effective December 31, 1985. Assets acquired through December 31, 1985 were valued based on actual costs, where available and other methods, including current replacement value and estimated historical costs. Assets acquired subsequent to December 31, 1985 were valued based on actual costs. The initial inventory for assets acquired through December 31, 1985 utilized a $1,000 threshold. For all assets acquired subsequent to December 31, 1985, the threshold is $300. Improvements other than buildings, which consist of "infrastructure" fixed assets such as roads, bridges, curbs and gutters, streets, sidewalks, drainage systems, etc., are excluded from the governmental fixed assets. Depreciation is not recorded in the governmental fixed assets. Lease Purchase Agreements have been recorded for amounts authorized and reported and classified in Governmental Fixed Assets under Lease Purchase Agreements (completed and in progress). The Governmental Fixed Assets at December 31, 2013 and 2012 does not include Roosevelt Hospital, as the facility was transferred to the M.C.I.A., Note 19.
Disclosures about Fair Value of Financial Instruments The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
Cash and cash equivalents and short-term investments: The carrying amount approximates fair value because of the short maturity of those instruments and include interest bearing accounts and short term investments with a maturity of three months or less.
Long-term investments: The fair value of long-term investments are estimated based on quoted market prices for those or similar investments. Additional information pertinent to the value of these investments is provided in Note 7.
-37- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Basis of Accounting (cont'd)
Disclosures about Fair Value of Financial Instruments (cont'd.)
Long-term debt: The County's long-term debt is stated at face value. The debt is not traded and it is not practicable to determine its fair value without incurring excessive cost. Additional information pertinent to the County's long-term debt is provided in Notes 4 and 14.
Recent Accounting Standards
GASB issued Statement No. 66, "Technical Corrections-2012-an amendment of GASB Statements No. 10 and No. 62" in March 2012. The objective of this Statement is to improve accounting and financial reporting for a governmental financial reporting entity by resolving conflicting guidance that resulted from the issuance of two pronouncements, Statements No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, and No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. Statement No. 66 is effective for financial statements for periods beginning after December 15, 2012.
GASB issued Statement No. 67, "Financial Reporting for Pension Plans - an amendment of GASB Statement No. 25" in June 2012. The objective of this Statement is to improve financial reporting by state and local governmental pension plans. This Statement results from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for pensions with regard to providing decision-useful information, supporting assessments of accountability and interperiod equity, and creating additional transparency. This Statement replaces the requirements of Statements No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans, and No. 50, Pension Disclosures, as they relate to pension plans that are administered through trusts or equivalent arrangements (hereafter jointly referred to as trusts) that meet certain criteria. The requirements of Statements 25 and 50 remain applicable to pension plans that are not administered through trusts covered by the scope of this Statement and to defined contribution plans that provide postemployment benefits other than pensions.
GASB issued Statement No. 68, "Accounting and Financial Reporting for Pensions- an amendment of GASB Statement No. 27" in June 2012. The primary objective of this Statement is to improve accounting and financial reporting by state and local governments for pensions. It also improves information provided by state and local government~! employers about financial support for pensions that is provided by other entities. This Statement results from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for pensions with regard to providing decision-useful information, supporting assessments of accountability and interperiod equity, and creating additional transparency.
GASB issued Statement No. 69, "Government Combinations and Disposals of Government Operations" in January 2013. This Statement establishes accounting and financial reporting standards related to government combinations and disposals of government operations. As used in this Statement, the term government combinations include a variety of transactions referred to as mergers, acquisitions, and transfers of operations.
GASB issued Statement No. 70, "Accounting and Financial Reporting for Nonexchange Financial Guarantees" in April 2013. Some governments extend financial guarantees for the obligations of another government, a not-for-profit entity, or a private entity without directly receiving equal or approximately equal value in exchange (a nonexchange transaction). As a part of this non exchange financial guarantee, a government commits to indemnizy the holder of the obligation if the entity that issued the obligation does not fulfill its payment requirements. Also, some governments issue obligations that are guaranteed by other entities in a nonexchange transaction. The objective of this Statement is to improve accounting and financial reporting by state and local governments that extend and receive nonexchange financial guarantees. _ 38 _ COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Basis of Accounting (cont'd)
Recent Accounting Standards (cont'd)
GASB issued Statement No. 71, "Pension Transition for Contributions Made Subsequent to the Measurement Date" in November 2013. The objective of this Statement is to address an issue regarding application of the transition provisions of Statement No. 68, Accounting and Financial Reporting for Pensions. The issue relates to amounts associated with contributions, if any, made by a state or local government employer or nonemployer contributing entity to a defined benefit pension plan after the measurement date of the government's beginning net pension liability.
The County does not prepare its financial statements in accordance with generally accepted accounting principles. The adoption of these new standards will not adversely effect the reporting on the County's financial condition.
Comparative Data Comparative total data for the prior year has been presented in order to provide an understanding of changes in the County's financial position and operations. However, comparative data has not been presented in each of the statements since their inclusion would make the statement unduly complex and difficult to read.
Prior Period Adjustments and Reclassifications Certain reclassifications have been made to the 2012 financial statements to conform to classifications in 2013.
3) DEFERRED COMPENSATION TRUST FUND
The County of Middlesex has established a deferred compensation plan pursuant to Section 457 of the Internal Revenue Code and under the provisions ofN.J.S.A. 43:15B-l. The plan includes the employees of Middlesex County, Middlesex County Board of Social Services, and the Middlesex County Mosquito Extermination Commission.
The plan is an arrangement whereby a public employer may establish a plan to permit its employees to voluntarily authorize a portion of their current salary to be withheld and invested in one or more of the types of investments permitted under the governing regulations. The County has engaged three private contractors to administer the plan. Contributions are recognized when received by the administrators, withdrawals and administrative fees when paid by the administrators and earnings when the company with which the funds are invested notifies the administrators.
Statutory and regulatory requirements governing the establishment and operation of deferred compensation plans have been codified in the New Jersey Administrative Code as N.J.A.C. 5:37. The more significant of these provisions include no personal liability to the employer for negative return on investments, retention of assets by the employer, eligible investment types, and the requirement for an independent review of all program funds by a private contractor retained to administer the program.
Pursuant to revisions to the Federal Internal Revenue Code, the State has amended the deferred compensation plan enabling statute. During 1998, the County implemented the required amendments to the Deferred Compensation Plan for compliance with federal and state regulations.
-39- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
4) DEBT, DEBT SERVICE AND STATUTORY DEBT CONDITIONS
Summary of County Debt
Year 2013 Year 2012 Issued: General Bonds and Notes $421,502,000 $429,688,000 Loans 33,452,713 34,318,773
Net Debt Issued 454,954,713 464,006,773
Authorized but not issued: General Bonds and Notes 267,461,375 210,376,545
Bonds and Notes Issued and Authorized but not Issued 722,416,088 674,383,318
Less: Bonds issued and authorized but not Issued- County College CH. 12 14,220,500 14,770,000 MCIA Loans 2,172,982 2,367,417 Accounts Receivable/Redevelopment Bonds 3,199,601 4,781,000
Net Bonds and Notes Issued and Authorized but not issued $702,823,Q05 $652,464,9Q1
-40- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS - REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31, 2013 AND DECEMBER 31, 2012
4) DEBT, DEBT SERVICE AND STATUTORY DEBT CONDITIONS (cont'd)
Summary of Statutory Debt Condition -Annual Debt Statement- Current Year 2013
The summarized statement of debt condition which follows is prepared in accordance with the required method of reporting for the Annual Debt Statement and indicated a statutory net debt of 0.72%.
Gross Debt Deductions Net Debt
General Debt $ 932,876,087 $ 230,053,082 $ 702,823,005
Net Debt of$702,823,005 divided by the Equalized Valuation Basis per N.J.S.A. 40A:2-2 as amended of $97,897,271,748 equals 0.72%.
Equalized Valuation Basis
2011 Equalized Valuation Basis ofReal Property $ 102,315,132,475 2012 Equalized Valuation Basis of Real Property 96,411 ,295,804 2013 Equalized Valuation Basis of Real Property 94,965,386,964
Average Equalized Valuation Basis $ ==9=7=,8=9=7=,2=7=1·=74==8=
Borrowing Power Under N.J.S.A. 40A:2-6 as Amended
2% of Average Equalized Valuation Basis $ 1,957,945,435 Net Debt 702,823,005 Remaining Borrowing Power $ ===1=·2=55=, 1=2=2=,4::;::30=
Schedule of Annual Net Debt Service Principal and Interest or Bonded Debt Issued and Outstanding
Schedule ofDebt Service as ofDecember 31,2013 Total Total Total Year Principal* Interest* Debt Service
2014 $ 43,915,000 $ 13,261,636 $ 57,176,636 2015 45,060,000 11,323,600 56,383,600 2016 45,026,000 9,908,001 54,934,001 2017 36,115,000 8,516,163 44,631,163 2018 33,690,000 7,294,807 40,984,807 2019-2023 131,215,000 19,463,926 150,678,926 2024-2028 41,641,000 5,599,337 47,240,337 2029-2033 9,440,000 775,141 10,215,141 2034-2037 400,000 34,000 434,000
$ 386,502,000 $ 76,176,611 $ 462,678,611
* Excludes $17,323,362 of County College Bonds payable by the State of New Jersey.
-41- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31, 2013 AND DECEMBER 31, 2012
4} DEBT, DEBT SERVICE AND STATUTORY DEBT CONDITIONS (cont'd}
Summary of County Debt for Capital Projects
Summarized below are the County's individual bond and loan issues which were outstanding at December 31, 2013:
Amount Amount Interest Final Bonds Issued Issued Outstanding Rates Maturity
General Improvement Debt ERI-Refunding Bonds of2004 $ 10,315,000 $ 7,290,000 3.54% to 5.44% 2033 Refunding Bonds of 2004 44,305,000 4,790,000 5.00% 2014 Refunding Bonds of2004 50lc 10,650,000 1,615,000 2.60% to 5.00% 2014 General Improvement Bonds of2005 21,622,000 3,050,000 3.25% to 4.00% 2015 General Improvement Bonds of2005 50lc 6,190,000 915,000 3.25% to 3.75% 2015 General Improvement Bonds of2006 51,300,000 31,550,000 4.00% to 4.125% 2021 General Improvement Bonds of2006 35,500,000 23,150,000 4.125% to 4.25% 2022 General Improvement Bonds of2007 19,500,000 12,400,000 3.50% to 4.00% 2021 General Improvement Bonds of2007 43,405,000 28,175,000 4.00% to 4.25% 2021 Heidrich Center Hotel Project 2007 3,000,000 2,400,000 4.00% to 4.25% 2037 General Improvement Bonds of 2008 18,000,000 11,975,000 3.625% to 4.00% 2021 General Improvement Bonds of2008 501c 2,500,000 1,600,000 3.625% to 4.00% 2021 General Improvement Bonds of2008 16,000,000 10,750,000 3.25% to 4.00% 2022 General Improvement Bonds of2009 22,000,000 17,400,000 2.00% to 4.00% 2023 Redev. General Improvement Bonds 2009 9,027,000 7,822,000 2.00% to 4.125% 2025 General Improvement Bonds of2010 41,000,000 34,250,000 2.00% to 3.50% 2024 General Improvement Refunding Bonds of 20 l 0 3,830,000 815,000 2.00% to 4.00% 2016 Genl. Improve. Refunding Taxable Bonds of2010 9,395,000 4,575,000 1.03% to 3.44% 2016 Genl. Oblig. Redev Bonds Series 20 ll 47,440,000 45,290,000 2.00% to 6.25% 2031 Genl. Oblig. Redev Bonds Series 2012 5,120,000 4,075,000 2.00% to 4.00% 2017 General Improvement Bonds of2013 40,839,000 40,839,000 2.00% to 3.00% 2028 Genl. Improve. Refunding Taxable Bonds of2013 3,355,000 3,355,000 0.50% to 1.00% 2016 Genl. Oblig. Refunding Nontaxable Bonds of2013 9,910,000 9,910,000 1.00% to 2.00% 2016 Genl. Improve. Refunding Nontaxable Bonds of2013 8,260,000 8,260,000 2.00% to 4.00% 2020 Genl. Oblig. Refunding Nontaxable Bonds of2013 2,445,000 2 445 000 3.00% to 4.00% 2020
Total General Improvement Debt 318 696 000
Open Space Refunding Bonds 2010 3,065,000 1,860 000 3.00% to 4.00% 2016
Total Open Space Bonds l 860,000
County College Bonds County College Bonds of2003 3,490,000 200,000 2.00% to 3.20% 2015 County College Bonds of2005 9,800,000 2,200,000 3.25% to 4.00% 2015 County College Bonds of2005 749,500 112,500 3.25% to 4.00% 2015 County College Bonds of 2006 3,260,500 1,123,000 4.125% 2016 County College Bonds of2007 2,500,000 1,330,000 3.50% to 4.00% 2019 County College Bonds of 2007 2,000,000 940,000 4.00% 2017 County College Bonds of 2007 2,500,000 1,212,500 4.00% 2017 County College Bonds of2008 2,000,000 875,000 3.25% to 3.50% 2017 County College Bonds of2009 6,500,000 5,425,000 2.00% to 4.625% 2029 County College Bonds of2010 4,000,000 2,800,000 2.00% to 3.00% 2020 County College Bonds of2010 1,176,500 992,500 2.00% to 3.50% 2025 County College Refunding Bonds of 20 l 0 2,550,000 345,000 2.00% to 4.00% 2015 County College Bonds of2012 4,250,000 4,100,000 2.00% to 3.00% 2027 County College Bonds of2013 2,000,000 2,000,000 2.00% to 3.00% 2025 County College Bonds of2013 750,000 750,000 2.00% to 3.00% 2027 County College Bonds of2013 305,000 305 000 2.00% to 3.00% 2020
Total County College Bonds 24 710 500
-42- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31, 2013 AND DECEMBER 31, 2012
4) DEBT, DEBT SERVICE AND STATUTORY DEBT CONDITIONS Ccont'd)
County College Bonds (Ch. 12, P.L. 71) County College Bonds of2003 3,490,000 200,000 2.00% to 3.20% 2015 County College Bonds of2005 749,500 112,500 3.25% to 4.00% 2020 County College Bonds of2006 3,260,500 1,123,000 4.125% 2016 County College Bonds of2007 2,500,000 1,212,500 4.00% 2017 County College Bonds of2009 6,500,000 5,425,000 2.00% to 4.625% 2029 County College Bonds of2010 1,176,500 992,500 2.00% to 3.50% 2025 County College Bonds of2012 4,250,000 4,100,000 2.00% to 3.00% 2027 County College Bonds of2013 750,000 750,000 2.00% to 3.00% 2027 County College Bonds of2013 305,000 305 000 2.00% to 3.00% 2020
Total County College Bonds (Ch. 12, P.L. 71) 14,220,500
County College E.F.A. (Ch. 12, P.L. 71) 4,320,000 395 000 4.85% to 5.25% 2014
Vocational School Bonds Vocational School Bonds of2005 16,888,000 2,450,000 3.25% to 4.00% 2015 Vocational School Bonds of2006 2,000,000 700,000 4.00% to 4.125% 2016 Vocational School Bonds of2007 2,600,000 1,155,000 3.50% to 4.00% 2017 Vocational School Bonds of2007 2,700,000 1,330,000 4.00% 2017 Vocational School Bonds of2008 2,690,000 1,475,000 3.25% to 3.50% 2018 Vocational School Bonds of2010 6,100,000 4,775,000 2.00% to 3.125% 2022 Vocational School Refunding Bonds of2010 6,265,000 3,935,000 2.00% to 4.00% 2017 Vocational School Refunding Bonds of2012 1,140,000 1,050,000 2.00% to 4.00% 2023 Vocational School Bonds of2013 3,100,000 3,100,000 2.00% to 3.00% 2027 Vocational School Refunding Bonds of2013 6,650,000 6 650 000 4.00% 2020
Total Vocational School Bonds 26,620,000
Bond Anticipation Notes Issued Bond Anticipation Notes due 06/06/14 35,000,000 35,000,000 1.00% 2014
Total Bond Anticipation Notes 35 000 000
(A) MCIALoan Payable County Loan from MCIA 2008 9,185,891 810,754 3.00% to 4.80% 2023 County Loan from MCIA 2009 9,000,036 2,737,717 1.00% to 3.25% 2024 County Loan from MCIA 2010 12,566,626 5,678,948 1.50% to 4.00% 2015 County Loan from MCIA2011 7,451,081 4,576,477 1.25% to 3.00% 2016 County Loan from MCIA 2012 7,174,523 5,798,758 1.25% to 3.00% 2017 County Loan from MCIA 2013 8,670,604 8 670 604 2.00% to 4.00% 2018
28,273,258 Green Acres Loans Issued Sewaren Marine Park Development 1997 1,000,000 450,171 2.00% 2021 Bank of China Property Acquisition 2003 2,250,000 1,029,606 2.00% 2021 Old Bridge Park Acquisition 2005 3,244,264 1,726,901 2.00% 2020 Old Bridge Park Acquisition 2009 750,000 618,931 2.00% 2029 New Brunswick Landing Lane Project 2010 1,600,000 1353 846 0.00% 2030
Total Green Trust Program Loan 5 179 455
Total Debt Issued and Outstanding $ 454,954,713
(A)- As a result oflegislation that impacted and provided for limitations on increases in tax levy amounts (P.L. 2007, c.62), the characterization of certain lease payment obligations have been modified as of July 1, 2007. As of and subsequent to that date, any lease payment obligations that involve asset acquisitions with estimated useful lives of five (5) years or greater, those obligations are to be classified as debt, in accordance with debt authorized under N.J.S.A. 40A:2-3 et seq. Lease obligations with respect to assets with estimated useful lives ofless than five years and all lease obligations issued prior to July 1, 2007, are not considered statutory debt of the local unit. -43- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
4) DEBT, DEBT SERVICE AND STATUTORY DEBT CONDITIONS (cont'd)
Summary of Statutory Debt Condition -Annual Debt Statement- Prior Year 2012
The summarized statement of debt condition which follows is prepared in accordance with the required method of reporting for the Annual Debt Statement and indicated a statutory net debt of 0.64%.
Gross Debt Deductions Net Debt
General Debt $ 894,743,318 $ 242,278,417 $ 652,464,901
Net Debt of$652,464,901 divided by the Equalized Valuation Basis per N.J.S.A. 40A:2-2 as amended of $101,630,794,128 equals 0.64%.
Equalized Valuation Basis
2010 Equalized Valuation Basis ofReal Property $ 106,165,954,106 2011 Equalized Valuation Basis of Real Property 102,315,132,475 2012 Equalized Valuation Basis ofReal Property 96,411,295,804
Average Equalized Valuation Basis $ =====10=1=,6=30=,7=9=4=,1=28=
Borrowing Power Under N.J.S.A. 40A:2-6 as Amended
2% of Average Equalized Valuation Basis $ 2,032,615,883 Net Debt 652,464,901 Remaining Borrowing Power $ ===1=·3=80=,1=5=0=,9=82=
Schedule of Annual Net Debt Service Principal and Interest or Bonded Debt Issued and Outstanding
Schedule of Debt Service as of December 31, 2012 Total Total Total Year Principal* Interest* Debt Service
2013 $ 43,265,000 $ 13,853,326 $ 57,118,326 2014 42,015,000 12,253,247 54,268,247 2015 42,800,000 10,673,962 53,473,962 2016 42,496,000 9,050,317 51,546,317 2017 33,230,000 7,569,728 40,799,728 2018-2022 134,034,000 20,648,517 154,682,517 2023-2027 31,282,000 5,438,221 36,720,221 2028-2032 12,660,000 1,278,913 13,938,913 2033-2037 625,000 59,925 684,925
$ 382,407,000 $ 80,826,156 $ 463,233,156
* Excludes $18,225,020 of County College Bonds payable by the State ofNew Jersey.
-44- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31, 2013 AND DECEMBER 31, 2012
4) DEBT, DEBT SERVICE AND STATUTORY DEBT CONDITIONS (cont'd)
Summary of County Debt for Capital Projects
Summarized below are the County's individual bond and loan issues which were outstanding at December 31, 2012:
Amount Amount Interest Final Bonds Issued Issued Outstanding Rates Maturity
General ImQrovement Debt ERI-Refunding Bonds of2004 $ 10,315,000 $ 7,830,000 3.54% to 5.44% 2033 Refunding Bonds of 2004 44,305,000 20,170,000 5.00% 2016 Refunding Bonds of2004 501c 10,650,000 6,470,000 2.60% to 5.00% 2016 General Improvement Bonds of 2005 21,622,000 12,872,000 3.25% to 4.00% 2020 General Improvement Bonds of2005 50lc 6,190,000 3,765,000 3.25% to 4.00% 2020 General Improvement Bonds of 2006 51,300,000 35,300,000 4.00% to 4.125% 2021 General Improvement Bonds of 2006 35,500,000 25,250,000 4.125% to 4.25% 2022 General Improvement Bonds of 2007 19,500,000 13,750,000 3.50% to 4.00% 2021 General Improvement Bonds of 2007 43,405,000 31,175,000 4.00% to 4.25% 2021 Heidrich Center Hotel Project 2007 3,000,000 2,500,000 4.00% to 4.25% 2037 General Improvement Bonds of 2008 18,000,000 13,300,000 3.625% to 4.00% 2021 General Improvement Bonds of 2008 501 c 2,500,000 1,800,000 3.625% to 4.00% 2021 General Improvement Bonds of2008 16,000,000 11,850,000 3.25% to 4.00% 2022 General Improvement Bonds of 2009 22,000,000 18,700,000 2.00% to 4.00% 2023 Redev. General Improvement Bonds 2009 9,027,000 8,247,000 2.00% to 4.125% 2025 General Improvement Bonds of2010 41,000,000 36,750,000 2.00% to 3.50% 2024 General Improvement Refunding Bonds of2010 3,830,000 1,895,000 2.00% to 4.00% 2016 Genl. Improve. Refunding Taxable Bonds of2010 9,395,000 6,230,000 1.03% to 3.44% 2016 Genl. Oblig. Redev Bonds Series 2011 47,440,000 47,440,000 2.00% to 6.25% 2031 Genl. Oblig. Redev Bonds Series 2012 5,120,000 5 120 000 2.00% to 4.00% 2017
Total General Improvement Debt 310,414,000
Open Space Refunding Bonds 2010 3,065,000 2 465 000 3.00% to 4.00% 2016
Total Open Space Bonds 2 465 000
County College Bonds County College Bonds of2003 3,490,000 300,000 2.00% to 3.20% 2015 County College Bonds of 2005 9,800,000 3,300,000 3.25% to 4.00% 2015 County College Bonds of2005 749,500 464,500 3.25% to 4.00% 2020 County College Bonds of2006 3,260,500 1,498,000 4.125% 2016 County College Bonds of2007 2,500,000 1,535,000 3.50% to 4.00% 2019 County College Bonds of 2007 2,000,000 1,155,000 4.00% 2017 County College Bonds of 2007 2,500,000 1,487,500 4.00% 2017 County College Bonds of 2008 2,000,000 1,100,000 3.25% to 3.50% 2017 County College Bonds of2009 6,500,000 5,712,500 2.00% to 4.625% 2029 County College Bonds of2010 4,000,000 3,200,000 2.00% to 3.00% 2020 County College Bonds of2010 1,176,500 1,057,500 2.00% to 3.50% 2025 County College Refunding Bonds of2010 2,550,000 1,310,000 2.00% to 4.00% 2015 County College Bonds of2012 4,250,000 4 250,000 2.00% to 3.00% 2027
Total County College Bonds 26,370,000
-45- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
4) DEBT, DEBT SERVICE AND STATUTORY DEBT CONDITIONS (cont'd)
County College Bonds (Ch. 12, P.L. 71} County College Bonds of2003 3,490,000 300,000 2.00% to 3.20% 2015 County College Bonds of 2005 749,500 464,500 3.25% to 4.00% 2020 County College Bonds of2006 3,260,500 1,498,000 4.125% 2016 County College Bonds of2007 2,500,000 1,487,500 4.00% 2017 County College Bonds of 2009 6,500,000 5,712,500 2.00% to 4.625% 2029 County College Bonds of2010 1,176,500 1,057,500 2.00% to 3.50% 2025 County College Bonds of2012 4,250,000 4 250 000 2.00%to 3.00% 2027
Total County College Bonds (Ch. 12, P.L. 71) 14 770 000
County College E.F.A. (Ch. 12, P.L. 71) 4,320,000 770 000 4.85% to 5.25% 2014
Vocational School Bonds Vocational School Bonds of2005 16,888,000 10,488,000 3.25% to 4.00% 2020 Vocational School Bonds of 2006 2,000,000 925,000 4.00% to 4.125% 2016 Vocational School Bonds of2007 2,600,000 1,420,000 3.50% to 4.00% 2017 Vocational School Bonds of 2007 2,700,000 1,605,000 4.00% 2017 Vocational School Bonds of 2008 2,690,000 1,740,000 3.25% to 3.50% 2018 Vocational School Bonds of2010 6,100,000 5,225,000 2.00% to 3.125% 2022 Vocational School Refunding Bonds of2010 6,265,000 5,075,000 2.00% to 4.00% 2017 Vocational School Refunding Bonds of2012 1,140,000 1 140 000 2.00% to 4.00% 2023
Total Vocational School Bonds 27 618 000
Bond AnticiQation Notes Issued Bond Anticipation Notes due 06/06/13 2,281,000 2,281,000 1.50% 2013 Bond Anticipation Notes due 03/21/13 45,000,000 45,000,000 2.00% 2013
Total Bond Anticipation Notes 47~281~000
(A) MCIA Loan Payable County Loan from MCIA 2008 9,185,891 2,694,233 3.00% to 4.80% 2023 County Loan from MCIA 2009 9,000,036 4,349,513 1.00% to 3.25% 2024 County Loan from MCIA 2010 12,566,626 8,368,863 1.50% to 4.00% 2015 County Loan from MCIA 2011 7,451,081 6,017,319 1.25% to 3.00% 2016 County Loan from M CIA 20 12 7,174,523 7 174 523 l.25%to 3.00% 2017
28 604 451 Green Acres Loans Issued Sewaren Marine Park Development 1997 1,000,000 505,278 2.00% 2021 Bank of China Property Acquisition 2003 2,250,000 1,147,160 2.00% 2021 Old Bridge Park Acquisition 2005 3,244,264 1,973,305 2.00% 2020 Old Bridge Park Acquisition 2009 750,000 652,683 2.00% 2029 New Brunswick Landing Lane Project 2010 1,600,000 1 435 896 0.00% 2030
Total Green Trust Program Loan 5 714 322
Total Debt Issued and Outstanding $ 464 006 773
(A)- As a result oflegislation that impacted and provided for limitations on increases in tax levy amounts (P.L. 2007, c.62), the characterization of certain lease payment obligations have been modified as of July 1, 2007. As of and subsequent to that date, any lease payment obligations that involve asset acquisitions with estimated useful lives of five (5) years or greater, those obligations are to be classified as debt, in accordance with debt authorized under N.J.S.A. 40A:2-3 et seq. Lease obligations with respect to assets with estimated useful lives ofless than five years and all lease obligations issued prior to July 1, 2007, are not considered statutory debt of the local unit. -46- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS - REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31, 2013 AND DECEMBER 31, 2012
4) DEBT, DEBT SERVICE AND STATUTORY DEBT CONDITION (CONT'D.)
General Obligation Refunding Bonds, Series 2013
The County issued $31,230,000 in General Obligation Refunding Bonds, Series 2013, dated November 7, 2013. Included in the $31,230,000 aggregate principal amount is $3,355,000 Qualified 501 (c)(3) General Obligation Refunding Bonds, Series 2013, $9,910,000 General Obligation Refunding Bonds, Series 2013, $8,260,000 General Improvement Refunding Bonds, Series 2013, $2,445,000 Qualified 50l(c)(3) General Improvement Refunding Bonds, Series 2013, $6,650,000 County Vocational-Technical Schools Refunding Bonds, Series 2013 and $610,000 County College Refunding Bonds, Series 2013. The plan of refunding and restructuring was to provide level debt service in future years as opposed to the existing payment schedules.
The total amount of the Refunded Bonds equals $31,309,000 with maturities from 2014 through 2020. The interest rates range from 4.00% for the General Improvement Bonds, Series 2005A, the County Vocational-Technical Schools Bonds, Series 2005A, the County College Bonds, Series 2005A, and the Qualified 501(c)(3) General Improvement Bonds, Series 2005A to 5.00% for the General Obligation Refunding Bonds, Series 2004 and the Qualified 50l(c)(3) General Obligation Refunding Bonds, Series 2004.
As a result, the County will realize a total of$1,776,487 in debt service savings through 2020. The debt service savings provided for net present value costs of 4.257% of the refunded principal. The interest rates range from 0.50% to 1.00% for the Qualified 501(c)(3) General Obligation Refunding Bonds, Series 2013 from 2014 to maturity on June 15, 2016, from 1.00% to 2.00% for the General Obligation Refunding Bonds, Series 2013 from 2014 to maturity on June 15,2016, from 2.00% to 4.00% for the General Improvement Refunding Bonds, Series 2013 from 2014 to maturity on June 15,2020, from 3.00% to 4.00o/~ for the Qualified 501(c)(3 )General Improvement Refunding Bonds, Series 2013 from 2014 to maturity on June 15, 2020, 4.00% for the County Vocational-Technical Schools Refunding Bonds, Series 2013 from 2014 to maturity on June 15, 2020 and from 2.00% to 3.00% for the County College Refunding Bonds, Series 2013 from 2014 to maturity on June 15,2020.
The outstanding debt service with respect to the County's 2013 General Obligation Refunding Bonds, Series 2013 is as follows:
Year Principal Interest Total
2014 $ 240,000 $ 885,635 $ 1,125,635 2015 6,625,000 768,777 7,393,777 2016 9,900,000 629,450 10,529,450 2017 3,545,000 468,875 4,013,875 2018 3,625,000 347,850 3,972,850 2019 3,695,000 207,550 3,902,550 2020 3,600,000 68 350 3,668,350 $ 31:230,000 $ 3,376,487 $ 34,606,487
-47- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
5) FUND BALANCE APPROPRIATED
Fund balance for the Current Fund at December 31, 2013 was reported in the amount of $27,965,479, of which $0 was appropriated and included as anticipated revenue for the year ending December 31, 2014.
Fund balance for the Current Fund at December 31, 2012 was reported in the amount of $21,087,369, of which $0 was appropriated and included as anticipated revenue for the year ending December 31, 2013.
6) INVENTORY -MATERIALS AND SUPPLIES
For the years ended 2013 and 2012, the County has reported Inventory on the balance sheet of the Current Fund. The Inventory is reported with an offsetting reserve. The amount reported is as follows:
2012 Inventory (Current Fund) Materials & Supplies $1.575.345 $1.549.701
7) CASH, CASH EQUIVALENTS AND INVESTMENTS
Deposits
New Jersey statutes permit the deposit of public funds in institutions located in New Jersey which are insured by the Federal Deposit Insurance Corporation (FDIC), or by any other agencies of the United States that insures deposits or the State of New Jersey Cash Management Fund.
New Jersey statutes require public depositories to maintain collateral for deposit of public funds that exceed insurance limits as follows:
The market value of the collateral must equalS percent of the average daily balance of public funds; or
If the public funds deposited exceed 75 percent of the capital funds of the depositor, the depository must provide collateral having a market value equal to 100 percent of the amount exceeding 75 percent.
All collateral must be deposited with the Federal Reserve Bank, the Federal Home Loan Bank Board or a banking institution that is a member of the Federal Reserve System and has capital funds of not less than $25,000,000. The State of New Jersey Cash Management Fund is authorized by statute and regulation of the State Investment Council to invest in fixed income and debt securities, which mature within one year.
Collateralization of Fund investments is generally not required. "Other Than State" participants contribute one tenth of one percent per year of the value of the aggregate units owned by them to establish a Reserve Fund, which is supplemented by the proportional interest of "Other Than State" participants in gains on investment transaction realized. The Reserve Fund is available to cover losses of "Other Than State" participants occasioned by the bankruptcy of an issuer of an investment held by the Fund and losses on sales of securities.
The cash on deposit is partially insured by federal deposit insurance in the amount of $250,000.00 in each depository. Balances above the federal deposit insurance amount are insured by the Government Unit Deposit Protection Act (GUDPA), N.J.S.A. 17:941, et seq., which insures all New Jersey governmental units' deposits in excess of the federal deposit insurance maximums.
-48- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
7) CASH, CASH EQUIVALENTS AND INVESTMENTS (cont' d)
Deposits (cont'd)
At December 31, 2013, the County's recorded cash, cash equivalents and investments amounted to $156,012,459 and an amount of $158,245,628 was on deposit with the respective institutions, excluding Deferred Compensation Fund, of which cash, cash equivalent and investments are held by the respective Trustees. Ofthe bank balance, $3,090,471 was FDIC insured and $155,155,157 was GUDPA insured.
At December 31, 2012, the County's recorded cash, cash equivalents and investments amounted to $145,965,311 and an amount of $150,197,126 was on deposit with the respective institutions, excluding Deferred Compensation Fund, of which cash, cash equivalent and investments are held by the respective Trustees. Of the bank balance, $3,210,970 was FDIC insured and $146,986,156 was GUDPA insured.
Custodial Credit Risk Deposits - Custodial credit risk is the risk that in the event of a bank failure, the County's deposits may not be returned to it. The government does not have a deposit policy for custodial credit risk other than those policies that adhere to the requirements of statute. As of December 31, 2013, based upon the insured balances as provided by FDIC and NJGUDPA coverage, no amount of the County's bank balance of$158,245,628 was considered exposed to custodial risk.
An Analysis of the County's cash, cash equivalents and investments at December 31, 2013 and 2012, by Fund/Category (Type) is as follows:
By Fund: 2013 2012 Fund Amount Amount
Current $76,166,667 $63,944,079 Trust 60,543,886 58,446,607 General Capital 19,301,906 23,574,625
Total Cash, Cash Equivalents & Investments $156.012.459 $145.965.311
By Category (Type) 2013 2012 Cash & Cash Equivalents: Amount Amount
Change Fund $ 600 $ 600 Demand Accounts 63,437,716 47,570,025 Savings, Money Market/ N.O.W. 63,728,090 67,568,301 State ofNJ Cash Mgmt. Fund 1 447 374 2,288,298 Total Cash & Cash Equivalents $128,613,780 $117,427,224
Investments: Certificates of Deposit 27,398,679 28,538,087
Total Cash, Cash Equivalents & Investments $156,012,459 $145,965,311
-49- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
7) CASH, CASH EQUIVALENTS AND INVESTMENTS ( cont' d)
Investments
New Jersey statutes establish the following securities as eligible for the investment of County funds:
1. Bonds or other obligations of the United States of America or obligations guaranteed by the United States;
2. Government money market mutual fund;
3. Any obligation that a federal agency or a federal instrumentality has issued in accordance with an act of Congress, which security has a maturity date not greater than 397 days from the date of purchase, provided such obligations bear a fixed rate of interest not dependent on any index or other external factor;
4. Bonds or other obligations of the local unit or bonds or other obligations of school districts of which the local unit is a part or within which the school district is located;
5. Bonds or other obligations, having a maturity date of not more than 397 days from the date of purchase, approved by the Division of Investment in the Department of the Treasury for investment by local units;
6. Local Government investment pools;
7. Deposits with the State of New Jersey Cash Management Fund established pursuant to section 1 of P.L. 1997, c. 281 (C.52:18A-90.4); or
8. Agreements for the repurchase of fully collateralized securities, if:
a. the underlying securities are permitted investments pursuant to paragraphs (1) and (3);
b. the custody of collateral is transferred to a third party;
c. the maturity of the agreement is not more than 30 days;
d. the underlying securities are purchased through a public depository as defined in section 1 ofP.L. 1970, c. 235 (C.19:9-41) and for which a master repurchase agreement providing for the custody and security of collateral is executed.
-50- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31, 2013 AND DECEMBER 31, 2012
7) CASH, CASH EQUIVALENTS AND INVESTMENTS (cont'd)
Investments (cont'd)
During the period ended December 31, 2013 and 2012, the County held investments in the State of New Jersey Cash Management Funds. Under the criteria established in Governmental Accounting Standards Board Statement No.9, the year end balances in a New Jersey Cash Management Fund are considered to be cash equivalents under GAAP.
The investment recorded in the general-purpose financial statements have been recorded at the carrying amount The difference between the carrying amount and market value is not material to the general purpose financial statements.
New Jersey Cash Management Fund- All investments in the Fund are governed by the regulations of the Investment Council, which prescribe specific standards designed to insure the quality of investments and to minimize the risks related to investments. In all the years of the Division of Investment's existence, the Division has never sutiered a default of principal or interest on any short-term security held by it due to the bankruptcy of a securities issuer; nevertheless, the possibility always exists, and for this reason a reserve is being accumulated as additional protection for the "Other-than-State" participants. In addition to the Council regulations, the Division sets further standards for specific investments and monitors the credit of all eligible securities issuers on a regular basis.
Custodial Credit Risk - Investments - Custodial credit risk is the risk that in the event of the failure of the counterparty, the County will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The government does not have a deposit policy for custodial credit risk.
Concentration of Credit Risk - This is the risk associated with the amount of investments that the County has with any one issuer that exceeds 5 percent or more of its total investments. Investment issued or explicitly guaranteed by the U.S. government and investments in mutual funds, external investment pools, and other pooled investments are excluded from this requirement.
Credit Risk - GASB 40 requires that disclosure be made as to the credit rating of all debt security investments except for obligations of the U.S. government or obligations explicitly guaranteed by the U.S. government. This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. In general, the County does not have an investment policy regarding Credit Risk except to the extent outlined under the County's investment policy. The New Jersey Cash Management Fund is not rated.
Based upon the existing deposit and investment practices, the County is generally not exposed to credit risks, custodial credit risks, concentration of credit risks and interest rate risks for its investments nor is it exposed to foreign currency risks for its deposits and investments.
As of December 31, 2013 and 2012, the County had $1,447,418 and $2,288,379, respectively, recorded as investments on deposit with the New Jersey Cash Management Fund.
-51- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31, 2013 AND DECEMBER 31, 2012
8) ASSESSMENT AND COLLECTION OF PROPERTY TAXES
New Jersey statutes require that taxable valuation of real property be prepared by the local unit tax assessor as of October I in each year and filed with the County Board of Taxation by January lOth of the following year. Upon the filing of certified adopted budgets by the Local Units, Local School District, County and Special Districts, the tax rate is struck by the County Tax Board based on the certified amounts in each of the taxing districts for collection to fund the budgets. Pursuant to statute, this process is to be completed on or before May 3, with a completed duplicate ofthe tax rolls to be delivered to the local unit tax collector on or before May 13th. New Jersey statutes require that each local unit provide for sufficient anticipated cash receipts equal to the "lawful yearly expenditure" which includes the total amount of property taxes to be raised by the local unit that is due to the County.
9) PENSION AND RETIREMENT PLANS
Employees of the County of Middlesex are enrolled in one of the two cost sharing multiple-employer public employee retirement systems: the Public Employees Retirement System (PERS) or the Police and Firemen's Retirement System (PFRS). The Division of Pensions in the Department of Treasury, State of New Jersey, administers the PERS and PFRS plans. The plans are funded annually based on the projected benefit method with aggregate level normal cost and frozen initial unfunded accrued liability. The plans, which cover public employees throughout the state, do not maintain separate records for each reporting unit and, accordingly, the actuarial data for the employees of the County who are members of the plans are not available. The contributions in 2013 and 2012 were $14,646,594 and $14,949,166 for PERS and $13,888,051 and $14,632,762 for PFRS, respectively, which includes contributions from the employees that are remitted on a quarterly basis.
10) ACCRUED SICK AND VACATION BENEFITS
The County of Middlesex has established uniform personnel policy procedures which set forth the terms under which an employee may accumulate unused benefits, as follows:
Sick Leave Sick leave for permanent employees accumulates in accordance with the terms of approved contracts. Any amount of sick leave allowance not used in a calendar year accumulates to the employee's credit to be used if and when needed. Upon normal retirement, employees are entitled to receive a lump sum payment as supplemental compensation for one-half of earned and unused accumulated sick leave to their credit on the effective date of retirement, up to a maximum of $15,000. In addition, the County offers a sick leave buyout option, on an annual basis, in the amount of one day's pay for every three days credited and not used, to a maximum of five days paid, so long as the employee did not use more than five sick days in the current year. An exception to the above is for employees who are under union PBA 214 (prosecutors, investigators & detectives) hired prior to October 1, 1993 who can receive up to a maximum of $30,000 accumulative sick time pay off upon retirement.
Vacations Vacation pay for permanent employees also accumulates in accordance with the terms of approved contracts. Vacation days are to be taken in the year earned and do not accumulate, except that vacation time earned in the current year may be carried over to the next succeeding year only.
-52- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
10) ACCRUED SICK AND VACATION BENEFITS ( cont' d)
The County maintains current records of each employee's status relating to earned and unused sick and vacation pay. At December 31,2013 and 2012, the estimated cost of unused sick pay is calculated to be $8,792,222 and $8,844,969 respectively. At December 31, 2013 and 2012, the estimated cost of unused accrued vacation pay is calculated to be $4,635,201 and $4,996,079 respectively. Management indicates that this amount approximates the calculation as required by GASB No. 16, however, the methodology utilized does not fully meet the recognition and measurement criteria as set forth by the GASB. No estimate is provided for the approximate current cost of unused vacation pay based upon the policy restrictions on accumulations. As disclosed in Note 2, the County makes provision for the lump sum payment of benefits in each year's operating budget, based on cost projections for employees nearing normal retirement eligibility. In order to partially fund these benefits, the County has established a trust fund entitled "Supplemental Compensation at Retirement," and each year an annual appropriation is raised in the operating budget and transferred to the fund. In 2013 and 2012, $500,000 respectively was appropriated and added to the fund and $418,938 was disbursed to employees during 2013 while $437,958 was disbursed to employees during 2012.
11) LEASES
The County has purchased various offices and other equipment which is being capitalized as installment purchases of fixed assets in accordance with New Jersey Administration Code 5:30-5.6.
The County has entered into lease commitments for the rental of various office space, storage space and parking facilities throughout the County of Middlesex.
The future annual operating lease payment due over the remaining terms of the leases for the next five succeeding years is as follows: 2013 2012 Year Amount Amount
2013 $3,304,739 2014 $3,531,073 3,049,571 2015 2,859,955 1,906,412 2016 2,036,784 1,156,063 2017 1,552,166 2018 1,150,168
-53- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
12) RISK MANAGEMENT
In response to rising premiums for traditional commercial insurance coverage, the County maintains a self insurance risk management program for all liability claims including, but not limited to, general, police professional, hospital professional, public officials, and automobile liability. A commercial excess liability policy is in place to cover catastrophic type claims, which would include any claim exceeding the policy's $500,000 self- insurance retention. A self-insurance Liability Fund has been established to fund those claims below $500,000. The County of Middlesex together with the autonomous agencies; County College, Board of Social Services, Improvement Authority, Mosquito Extermination Commission comprising the Middlesex County Insurance Commission. The Middlesex County Insurance Commission provides liability coverage to above named autonomous agencies through Self-Insurance Liability Fund and Excess Liability policy. The Middlesex County Insurance Commissioners retain the services of an actuary to establish the amount of cash reserves deemed necessary to pay claims.
The County also maintains a self-insured Worker's Compensation Fund for all workers compensation claims with the exception of these claims which occurred during the period April 3, 1998 to June 2, 2000. Claims which occurred between April 3, 1998 and June 2, 2000 are covered in total by a commercial primary Workers Compensation Insurance policy. Claims occurring after June 2, 2000 are self-insured, however, a commercial excess Worker's Compensation policy is in place, subject to a $750,000 Self Insurance Retention.
The financial statements do not reflect any charges for claims incurred but not reported and any reported incurred claims that remain unpaid at December 31, 2013 for the respective funds.
The Commissioners assessed the following participants for 2013 and 2012, as follows:
2013 2012 AGENCY TOTAL TOTAL
County College $280,902 $245,694 Board of Social Services 48,659 54,916 County Improvement Authority 90,367 63,436
$419.928 $364,046
The respective agency assessments have been computed by an actuarial analysis.
The estimated liability, as established by the third party administrator, for claims incurred and reported for the Self-Insurance Fund at December 31, 2013 and 2012 totaled $1,296,169 and $1,166,246, respectively. The County has appropriated funds in the 2014 and 2013 Budgets, in accordance with this funding plan.
The County has purchased commercial public entity excess liability insurance for general liability and automobile liability coverage in effect at December 31, 2013 and 2012, was as follows:
Limits oflnsurance: 2012 Each Accident or Occurrence Limit $ 10,000,000 $10,000,000 Policy Aggregate Limit 20,000,000 20,000,000 Self-Insured Limit Retention 500,000 350,000
-54- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
12) RISK MANAGEMENT (cont'd)
During 2013 and 2012, the County maintained two individual excess healthcare/professional liability coverages, combined as follows:
Limit of Liability: A. 100% of the loss in excess of all underlying Insurance not to exceed, subject to retention: B. $5,000,000 per occurrence or: C. $7,000,000 Annual Aggregate (as defined)
Retention Limits per medical incident $ 350,000 annual aggregate 750,000
YEAR ENDED DECEMBER 31,2013
The estimated liability, as established by the third party administrator, for claims incurred and reported for the Worker's Compensation Fund at December 31, 2013 is $6,527,548. This includes the run-off claims on file prior to the County purchase of commercial coverage policy for worker's compensation claims prior to April, 1998 and after June 2, 2000. The County has purchased commercial coverage for worker's compensation for the subsequent period: April3, 1998- June 2, 2000.
The County has opted to self insure worker's compensation effective for the period commencing June 2, 2000. The above number includes claims incurred after June 2, 2000.
The County maintains a self-insurance fund for employment compensation insurance costs. The County remits to the State of New Jersey for costs incurred, on a quarterly basis, as determined and billed by the State.
The activity within each of the Self-Insurance Fund reserves, the Worker's Compensation Fund reserves and Unemployment Compensation Fund reserves for the year ended December 31, 2013 were as follows:
Balance Increases to Decrease to Balance 12/31/12 Reserves Reserves 12/31/13
Self-Insurance Fund $4,378,392 $925,882 $1,910,348 $3,393,926
Workers' Compensation Fund 973,856 3,832,101 3,079,127 1,726,830
Unemployment Compensation Fund 0 171,451 50,882 120,569
-55- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
12) RISK MANAGEMENT (cont'd)
YEAR ENDED DECEMBER 31,2012
The estimated liability, as established by the third party administrator, for claims incurred and reported for the Worker's Compensation Fund at December 31, 2012 is $6,940,558. This includes the run-off claims on file prior to the County purchase of commercial coverage policy for worker's compensation claims prior to April, 1998 and after June 2, 2000. The County has purchased commercial coverage for worker's compensation for the subsequent period: April 3, 1998 -June 2, 2000.
The County has opted to self insure worker's compensation effective for the period commencing June 2, 2000. The above number includes claims incurred after June 2, 2000.
The County maintains a self-insurance fund for employment compensation insurance costs. The County remits to the State of New Jersey for costs incurred, on a quarterly basis, as determined and billed by the State.
The activity within each of the Self-Insurance Fund reserves, the Worker's Compensation Fund reserves and Unemployment Compensation Fund reserves for the year ended December 31, 2012 were as follows:
Balance Increases to Decrease to Balance 12/31111 Reserves Reserves 12/31/12
Self-Insurance Fund $4,664,684 $1,418,475 $1,704,767 $4,378,392
Workers' Compensation Fund 2,483,005 2,292,296 3,801,445 973,856
Unemployment Compensation Fund 71,539 267,537 339,076 0
Increases to Reserves represent amounts received from participant assessments, charges to the County Operating Budget, interest on investments and deposits, subrogation's and third party reimbursements and refunds. Decreases to Reserves represent the payment on adjudicated or settled claims, asserted costs and administrative fees and charges.
The County of Middlesex participates in the Middlesex County Joint Health Insurance Fund (MCJHIF). The MCJHIF consists of seven (7) County agencies within Middlesex County, representing a total of 4,667 and 4,676 retirees, cobra participants and active employees as of December 31, 2013 and 2012 respectively. The MCJHIF's purpose is to provide health care benefits to all eligible participants for medically necessary services covered under the health plan choices offered. The Fund is regulated by the State of New Jersey Department of Insurance as provided by statute and regulations and is subject to reporting requirements mandated by the State.
The assessments of the participating members are determined and certified by the actuary and approved by a majority vote of the Fund Commissioners.
The Commissioners of the MCJHIF have the authority, by majority vote, to levy on the participating local units an additional assessment to assure the payment of the Funds' obligations.
-56- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
12) RISK MANAGEMENT (cont'd)
Changes in the MCJHIF's fund balance for each fund year at December 31, are as follows:
At December 31, 2013 2012 Fund Fund Balance Fund Balance Year Balance Balance
2013 $4,125,579 2012 1,508,606 $1,039,236 2011 4,634,227
The Fund uses reinsurance agreements to reduce its exposure to large losses on certain types of insured events. Reinsurance may allow recovery of a portion of losses from re-insurers.
Accordingly, the financial statements of the County do not report or reflect its participatory share of fund claims, expenditures or fund (deficit) balance at December 31, 2013 and 2012.
13) POST EMPLOYMENT BENEFIT PLANS OTHER THAN PENSION PLANS & POST RETIREMENT HEALTH CARE BENEFITS
The County provides health benefits through the Middlesex County Joint Health Insurance Fund to certain retirees and their dependents, as follows:
Retired employees pay the full cost of coverage under the Plan, in most cases. However, the former employer may assume that cost if the retired employee meets certain requirements. If the retired employee is paying the full cost of coverage, the monthly premiums will be billed to such retired employee on a monthly basis or as otherwise established by the Middlesex County Joint Health Insurance Fund. The Plan Sponsor has agreed to pay retiree coverage if:
1. the retiree receives retirement benefits from a State ofNew Jersey administered retirement system; and, 2. he or she has 25 or more years of service credited in that retirement system or was a participant in a State of New Jersey Early Retirement Incentive Program; or 3. he or she retired on an approved disability retirement (regardless of years of service) in that retirement system; 4. the employer has agreed to pay for coverage of a surviving spouse of a retiree who qualified under the provision listed above until the retiree's death.
At December 31, 2013, approximately 1,103 retirees, representing the County and Roosevelt Care Center, were receiving non-contributory health coverage benefits at an estimated annual cost to the County of approximately $18,897,464.
At December 31, 2012, approximately 1,066 retirees, representing the County and Roosevelt Care Center, were receiving non-contributory health coverage benefits at an estimated annual cost to the County of approximately $17,938,296.
-57- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
13) POST EMPLOYMENT BENEFIT PLANS OTHER THAN PENSION PLANS & POST RETIREMENT HEALTH CARE BENEFITS (cont'd)
The County participates in the Middlesex County Joint Health Insurance Fund (MCJHIF), an agent multiple-employer current and postemployment healthcare plan administered by MCJHIF. The MCJHIF consists of seven (7) County agencies within Middlesex County and covers both current and retired employees of the County and its participating agencies. The MCJHIF receives an annual report that includes its financial statements and required supplementary information for its benefits plan. Benefit provisions for the County are established and amended through negotiations between the County and the respective unions along with prior contracts negotiated between the respective unions and the County of Middlesex.
The contribution requirements of plan members and the participating agencies are established and may be amended by the MCJHIF Commissioners. The County's annual postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. The following table shows the components ofthe County's annual OPEB cost for the year, any amounts contributed to the plan and the County's net OPEB obligation. For 2013 and 2012, the County's annual OPEB cost (expense) of $61,530,000 and $51,556,000, respectively was less than the ARC. In 2011, the County's annual OPEB cost (expense) of 49,763,000 was less than the ARC.
2013 2012 2011 Total Total Total Net OPEB obligation- beginning of year $230,516,000 $194,858,000 $159,786,000 Annual required contribution (ARC) 65,309,000 54,750,000 52,383,000 Interest on Net OPEB Obligation 10,373,000 8,769,000 7,190,000 Adjustment to the ARC (14,152,000) (11,963,000) (9,810,000) Annual OPEB Cost 61,530,000 51,556,000 49,763,000 Less: Contributions 16,249,000 15,898,000 14,691,000
Net OPEB obligation- end of year $275,727,000 $23Q,516,00Q $124,858,0QQ
The funded status of the plan for the County as of January 1, 2013, is as follows:
Total Actuarial accrued liability (AAL) $693,850,000 Actuarial value of plan assets - 0-
Unfunded actuarial accrued liability (UAAL) $623,85Q,QQO Funded ratio (actuarial value of plan assets/ AAL) 0.00% Covered payroll (active plan members) $114,219,778 UAAL as a percentage of covered payroll 607.47%
-58- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31, 2013 AND DECEMBER 31, 2012
13) POST EMPLOYMENT BENEFIT PLANS OTHER THAN PENSION PLANS & POST RETIREMENT HEALTH CARE BENEFITS ( cont' d)
The projection of future benefits for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the health-care cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress presented as required supplementary information following the notes to the financial statements, presents trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.
Projections of benefits for financial reporting purposes are based on the substantive plan and includes the types of benefits provided at the time of each valuation and the historical pattern of sharing benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
In the January 1, 2013 actuarial valuation, the projected unit credit method was used. A rate of 4.50% was utilized as the discount rate and the amount of increase in the normal cost amount. The unfunded accrued liability is being amortized as a level dollar amount using an open period of thirty (30) years.
-59- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
14) COUNTY-GUARANTEED CAPITAL EQUIPMENT LEASE REVENUE BONDS AND OTHER ISSUES
2013 The Middlesex County Improvement Authority has outstanding various issues of County Guaranteed Equipment Lease Revenue Bonds and various other County-Guaranteed Bonds. These Bonds are serviced through rental payments of the governmental entities that participate in the equipment lease program. In addition to these bonds being secured by a lien on the pledged property, they are further secured by a full and unconditional guarantee of the County of Middlesex to pay, when due, the principal of, redemption premium, if any, and interest on the Bonds. Total outstanding Improvement Authority Equipment Lease Revenue Bonds and other County-Guaranteed Bonds, guaranteed by the County of Middlesex at December 31,2013 amounted to $210,460,000, and are listed below:
Original Bonds Issue Payable Amount Dec. 31,2013 Capital Equipment Lease Revenue Bonds, Series 2004 12,370,000 $75,000 Series 2005 15,705,000 240,000 Series 2006 7,985,000 555,000 Series 2008 13,100,000 1,535,000 Series 2009 13,115,000 4,470,000 Series 2010 14,075,000 6,310,000 Series 2011 9,595,000 5,895,000 Series 2012 11,815,000 9,840,000 Series 2013 13,840,000 13,840,000
Middlesex County Educational Svcs. Comm., Series 2004 (RefBds) 14,010,000 (1) 11,230,000 The Meadows at Middlesex Golf Course, Series 2004 (Ref Bonds) 15,265,000 500,000 Heidrich Bond Issue, Series 2007 3,000,000 2,400,000 Middlesex County Educational Svcs. Comm., Series 2008 40,000,000 35,170,000 Open Space Refunded Bonds, Series 2008 29,545,000 17,315,000 Open Space Trust Revenue Bonds, Series 2009 40,000,000 34,265,000 The Meadows at Middlesex Golf Course, Series 2009 (RefBonds) 4,755,000 4,055,000 Middlesex County Educational Services Comm., Series 2010 5,300,000 3,515,000 Open Space Refunded Bonds, Series 2011 (Ref Bonds) 46,830,000 46,830,000 Refunding Capital Improvement Program- 2011 545,000 545,000 The Meadows at Middlesex Golf Course, Series 2013 (RefBonds) 11,875,000 11,875,000
$210.460.000
(l) Original issue was $16,170,000 and partially refunded on August 1, 2004.
-60- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
14) COUNTY-GUARANTEED CAPITAL EQUIPMENT LEASE REVENUE BONDS AND OTHER ISSUES (cont'd)
2012 The Middlesex County Improvement Authority has outstanding various issues of County Guaranteed Equipment Lease Revenue Bonds and various other County-Guaranteed Bonds. These Bonds are serviced through rental payments of the governmental entities that participate in the equipment lease program. In addition to these bonds being secured by a lien on the pledged property, they are further secured by a full and unconditional guarantee of the County of Middlesex to pay, when due, the principal of, redemption premium, if any, and interest on the Bonds. Total outstanding Improvement Authority Equipment Lease Revenue Bonds and other County-Guaranteed Bonds, guaranteed by the County of Middlesex at December 31,2012 amounted to $231,220,000, and are listed below:
Original Bonds Issue Payable Amount Dec. 31,2012 Capital Equipment Lease Revenue Bonds, Series 1998 $10,210,000 $275,000 Series 2003 14,740,000 280,000 Series 2004 12,370,000 175,000 Series 2005 15,705,000 360,000 Series 2006 7,985,000 740,000 Series 2008 13,100,000 4,100,000 Series 2009 13,115,000 6,695,000 Series 2010 14,075,000 9,300,000 Series 2011 9,595,000 7,750,000 Series 2012 11,815,000 11,815,000
Open Space Trust Revenue Bonds, Series 2003 78,765,000 3,640,000 Capital Improvement Revenue Bonds, Series 1999 (Ref Bonds) 2,120,000 1,075,000 Middlesex County Educational Svcs. Comm., Series 2004 (RefBds) 14,010,000 (I) 11,950,000 The Meadows at Middlesex Golf Course, Series 2004 (Ref Bonds) 15,265,000 12,430,000 Heidrich Bond Issue, Series 2007 3,000,000 2,500,000 Middlesex County Educational Svcs. Comm., Series 2008 40,000,000 36,230,000 Open Space Refunded Bonds, Series 2008 29,545,000 20,110,000 Open Space Trust Revenue Bonds, Series 2009 40,000,000 35,775,000 The Meadows at Middlesex Golf Course, Series 2009 (Ref Bonds) 4,755,000 4,360,000 Middlesex County Educational Services Comm., Series 2010 5,300,000 3,970,000 Open Space Refunded Bonds, Series 2011 (Ref Bonds) 46,830,000 46,830,000
$220.360.000
(I) Original issue was $16,170,000 and partially refunded on August I, 2004.
-61- COUNTY OF MIDDLESEX, NEW JERSEY Page 1 of2 NOTES TO FINANCIAL STATEMENTS - REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31, 2013 AND DECEMBER 31, 2012 151 LEASE PAYMENTS- 2013
The County participated in the following lease purchase agreements: Total Less Principal Future Minimum Lease Payments Minimwn Amount Minimum Date of Interest Lease Representing Lease Final Lease Rate ~ 2015 2016 2017 2018 2019 -Eod Pai:ments Interest Pa:z:ment Pa:z:ment ~ MCIA Juvenile Detention Center Lease Program (1997 Series) $ 1,264,350 $ 1.260,750 $ 1,261,750 $ $ $ $ 3,786,850 $ 181,850 $ 3,605,000 May!, 16 2.00%-4.00%
MCIA 2005 Capital Equipment Lease Program 50,473 48,727 99,200 3,517 95,683 Jun.15, 15 3.00%-3.70%
MCIA 2006 Capital Equipment Lease Program 38,466 37,051 35,591 111,108 6,556 104,552 May 15,16 3.80%-4.25%
MCIA 2009 CapitaJ Equipment Lease Program 131,663 131,663 3,211 128,452 Jul. 15,14 1.00%-2.50%
MCIA 2010 Capital Equipment Lease Program 193,387 193,387 386.774 16,734 370,040 Jul. 15, 15 1.50%-4.00%
MCIA 2011 Capital Equipment Lease Program 207,390 207,391 207,391 622,172 35,645 586,627 Jul. 15,16 1.25%~3.00%
MCIA 2011 Capital Equipment Revenue Ref Bonds (1999 Series) 555,900 555,900 10,900 545,000 Jun.l5,14 3.00%-4.00%
MCIA 2012 Capital Equipment Lease Program 193,942 193,942 193,942 193,941 775,767 64,866 720,901 Jul. 15, 17 1.25%-3.00%
MCIA 2013 Capital Equipment Lease Program 309,712 309,712 309,712 309,712 309,712 1,648,560 149,177 1,399,383
Sub TotalofMCIA Capital Lease Progranas $ 2,945,283 $ 2,250,9QO_ $ _2,008,386 $ 503,653_ $ 3()9,71~ $ ------$ 8,017,994 $ 452,366 $ 7,555,638
0\ N COUNTY OF MIDDLESEX, NEW JERSEY Page 2of2 NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012 IS) LEASE PAYMENTS- 2013
The County participated in the following lease purchase agreements:
Total Less Principal Future Minimum Lease Payments Minimum AmOtmt Minimum Date of Interest Lease Representing Lease Final Lease Rate 2015 2016 2017 2018 2019- End ZQ!L_ Pa~ents Interest P~ent Paxment ~
MCIA 2008 Open Space Trust Fund Prognun 3,729,875 3,734,625 3,734,650 3,733,650 3,737,150 1,407,000 20,076,950 2,761,950 17,315,000 Jul. IS, I9 3.00%~5.00%
MCIA 2009 Open Space Trust Fund Program 3,313,625 3,310,624 3,315,225 3,317,024 3,316,025 35,256,156 51,828,679 17,563,679 34,265,000 Nov. I, 29 2.00%-6.11%
MCIA 20II Open Space Trust Ref Bonds (2003 Series) 5,821,637 5,828,388 5,852,137 5,861,888 5,870,888 29,422,850 58,657,787 11,827,787 46,830,000 Aug. I, 28 3.00%-5.00%
66 086 006 $ Sub Total of MCIA Open Space Trust Fund Programs $ 12,865,137 $ 12,873,637 $ 12,9021012 $ 1:!!912,562 $ 12,924,063 $ 1 1 130,563,416 $ 32,153,416 $ 98,4101000
SubTotal ofMCIAPrograms $ 15,810,420 $ 15,124,597 $ 14,910,398 $ 13,416,215 $ 13,233,775 $ 66,086,006 $ 138,581,410 $ 32,615,772 $ 105,965,638
Civic Sguare Proied ~ertifiates ofParticiution:
Civic Square II Projec~ Series I998 $ 5,375,000 $ 5,375,000 $ 0 $ 5,375,000 Jun. IS, 2S N/A
Civic Square ill, Series I998 (Refunded in 2009) $ 1,542,919 $ 1,541,294 $ 1,542,681 $ 1,541,369 $ 1,542,756 15,425,684 23,136,703 5,981,703 17,155,000 Jun.IS,28 Var.
Civic Square N, Series 2001 3,032,600 3,034,675 3,032,900 3,037,275 3,037,250 39,455,250 54,629,950 19,214,950 35,415,000 Jul. IS,3I \tar.
20II Civic Square II- Refunded COP 2,784,163 3,414,213 3,417,913 3,412,706 3,410,000 35,322,050 51,761,044 14,416,044 37,345,000 Jun. IS, 29 Var.
Sub Total of Qvic Square Projects $- _L3!;9M!_ $. 7,990,182 $ 7,993,494 $ 7,991,350 $ 7,990,006 $ 95,577,984 $ 134,902,697 $ 39,612,697 $ 95,290,000 I 0\ Board of Social Services Certificates of Participation: (j,) BSSCOP $ . _1.96_5,}l§_ $ ~7.750 $ 1941625 $ 1,927,875 $ 1940 500 $ 3192875 $ 12,936,000 $ 1971000 $ 10 965,000 Feb. IS, I9 3.60%-5.00%
The County of Middlesex issued $23,415,000 insured Certificates of Participation dated May 15, 1994, evidencing interest of the owners thereof in certain obligations of the County due under its lease purchase agreement with PBCF New Jersey,lnc. The certificates, a combination of serial and term. were issued to provide funds to acquire certain real property, office building and other improvements. The basic rent payments due by the County ofMiddlesex for the certificates is provided for in part or whole by a sublease between the County and the Middlesex County Board of Social Services. The interest rate on the $8,105,000 serial certificates range from 4.00% to 5.90% with a final maturity of August IS, 2009. The $6,060,000 tenn certificate due August 15, 2014 and the $9,250,000 tenn certificate due February 15, 2019, have interest rates of 6.00%, and 6.125% respectively. The final basic rent payment is February 1, 2019. The County executed a Debt Service Reserve Forward delivery Agreement dated March 15, 1996, related to the Certificates of Participation.
On August 15, 1998 the County refinanced the outstanding $23,060,000 Certificates of Participation with $25,070,000 refunding Certificates of Participation.
(A) ~As a result oflegislation that impacted and provided for limitations on increases in tax levy amounts (P.L. 2007, c.62), the characterization of certain lease payment obligations have been modified as of July 1, 2007. As of and subsequent to that date, any lease payment obligations that involve asset acquisitions with estimated useful lives of five (5) years or greater, those obligations are to be classified as debt, in accordance with debt authorized under N.J.S.A. 40A:2~3 et seq. Lease obligations with respectto assets with estimated useful lives of less than five years and aU lease obligations issued prior to July 1, 2007, are not considered debt of the local unit. COUNTY OF MIDDLESEX, NEW JERSEY Page I of2 NOTES TO FINANCIAL STATEMENTS - REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31, 2013 AND DECEMBER 31, 2012
!Sl LEASE PAYMENTS- 2012
The County participated in the fo1lowing ]ease purchase agreements: Total Less Principal Future Minimum Lease Pavments Minimum Amount Minimum Date of Interest Lease Representing Lease FinaJ Lease Rate .fQ1L_ 2014 2015 2016 2017 2018-End Pavments Interest Pavment Pavment ~ MCIA Juvenile Detention Center Lease Program (1997 Series) $ 1,236,950 $ 1,252,550 $ 1,248,750 $ 1,243,375 $ $ $ 4,981,625 $ 246,625 $ 4,735,000 May I, 16 4.00%-5.00%
MCIA 1998 Capita] Equipment Lease Program 287,650 287,650 12,650 275,000 Jul. 15,13 3.30%-4.60%
MCIA 2003 Capital EqUipment Lease Program 284,480 284,480 4,480 280,000 Apr. 15,13 2.00%-3.20%
MCIA 2005 Capital Equipment Lease Program 52,171 50,473 48,727 151,371 7,847 143,524 Jun.IS, IS 3.00%-3.70%
MCIA 2006 Capital Equipment Lease Program 39,860 38,466 37,051 35,591 150,968 11,565 139,403 May 15,16 3.80%-4.25%
MCIA2008 Capital Equipment Lease Program 147,044 147,044 4,455 142,589 Jul. 15, 13 3.00%-3.50%
MCIA 2009 Capital Equipment Lease Program 131,663 131,663 263,326 9,555 253,771 Jul. IS, 14 1.00%-2.50%
MCIA 2010 Capital Equipment Lease Program 193,387 193,387 193,387 580,161 34,846 545,315 Jul. 15, 15 1.50%-4.00%
MCIA 2011 Capital Equipment Lease Program 207,390 207,390 207,391 207,391 829,562 58,671 770,891 Jul. 15, 16 1.25'/o-3.00%
MCIA 2011 Capital Equipment Revenue RefBonds (1999 Series) 559,750 555,900 1,115,650 40,650 1,075,000 Jun. 15, 14 3.00'/o-4.00%
MCIA 2012 Capital Equipment Lease Program 193,942 193,842 193,942 193,842 193,941 969,709 77,773 891,936 Jul. 15, 17 1.25%-3.00%
Sub Total of MCIA Capital Lease Programs $ 3,334,287 $ 2,623.JZL$ ___.1,!129,2~ $. 1,689,2!!.. $ J93,941 $_ $ 9,761,546 $ 509,118 $ 9,252,429 I 0\ ~ COUNTY OF MIDDLESEX, NEW JERSEY Page 2 of2 NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31, 2013 AND DECEMBER 31, 2012
15) LEASE PAYMENTS- 2012
The County participated in the following lease purchase agreements:
Total Less Principal Future Minimum Lease Payments Minimum Amount Minimum Date of Interest Lease Representing Lease Final Lease Rate 2014 2015 2016 2018- End Payments ~ 2017 Interest P~ment Payment ~ MCIA 2003 Open Space Trust Fund Program 3,785,600 3,785,600 145,600 3,640,000 Aug. 1,13 2.00%-5.25%
MCIA 2008 Opeu Spac~ Trust Fund Program 3,731,675 3,729,875 3,734,625 3,734,650 3,733,650 5,144,150 23,808,625 3,698,625 20,110,000 Jul. 15, 19 3.00%-5.00%
MCIA 2009 Open Space Trust Fund Program 3,309,025 3,313,625 3,310,624 3,315,225 3,317,024 38,572,181 55,137,704 19,362,704 35,775,000 Nov. 1, 29 2.00%-6.11%
MCIA 2011 Open Space Trust RefBonds (2003 Series) 2,046,638 5,821,637 5,828,388 5,852,137 5,861,888 35,293,738 60,704,425 13,874,425 46,830,000 Aug. 1,28 3.00%-5.00%
Sub Total of MCIA Open Spate Tmst Fund Programs $ 12,872,938 $ 12,865,137 $ 12,873,637 $ 12,902,012 $ 12,912,562 $ 79,010,069 $ 143,436,354 $ 37,081,354 $ 106,355,000
Sub Total ofMCIAPrograms $ 16,207,225 $ 151488,908 $ 14,802,885 $ 14,582,311 $ 13,106,503 $ 79,010,069 $ 153,197,900 $ 37.~9J),472 $ 115,607,429
Qvic: Sguare Pro jed Cer:tllicates ofParticiRation:
Civic Square II Project, Series 1998 $ 5,375,000 $ 5,375,000 $ 0 $ 5,375,000 Jun. 15,25 Var.
Civic Square lll, Series 1998 (Refunded in 2009) $ 1,543,794 $ 1,542,919 $ 1,541,294 $ 1,542,681 $ 1,541,369 16,968,440 24,680,497 6,675,497 18,005,000 Jun. 15,28 Var.
Civic Square IV, Series 2001 3,035,925 3,032,600 3,034,675 3,032,900 3,037,275 42,492,500 57,665,875 21,065,875 -36,600,000 Jul. 15,31 Var.
2011 Civic Square II -Refunded COP 1,474,113 2,784,163 3,414,213 3,417,913 3,412,706 38,732,050 53,235,156 15,890,156 37,345,000 Jun. 15,29 Var. I 0\ Sub Total of Civic: Square Projects $ __ 6,953,832_ $ 7,~,682 $ 7,~182 $ 7,99M?4 $ __7,9!1~ $~567~ $ 140,956,528 $ 43,631,528 $ 97,325,000 CJ1 Board of Social Ser:rlc:es Certificates ofParticigation:
BSS COP $ 1$8,8~8_$ ~.3{§_$_ 1,967,7?Q_$_ 1,941,62§__ $_~1927,875 $ 5133375 $ 14,914,828 $---- 2,569,828 $-- - 12,34?,000 Feb. 15, 19 3.60%-5.00%
The County of Middlesex issued $23,415,000 insured Certificates of Participation dated May 15, 1994, evidencing interest of the owners thereof in certain obligations oftheCotmty due under its lease purchase agreement with PBCF New Jersey, Inc. The certificates, a combination of serial and term,. were issued to provide funds to acquire certain real property, office building and other improvements. The basic rent payments due by the County ofMiddlesex for the certificates is provided for in part or whole by a sublease between the County and the Middlesex County Board of Social Services. The interest rate on the $8,105,000 serial certificates range from 4.00% to 5.90% with a final maturity of August 15, 2009. The $6,060,000 tenn certificate due August 15, 2014 and the $9,250,000 term certificate due February 15, 2019, have interest rates of6.00% and 6.125% respectively. The final basic rent payment is February 1, 2019. The County executed a Debt Service Reserve Forward delivery Agreement dated March 15, 19%. related to the Certificates of Participation.
On August 15, 1998 the County refmanced the outstanding $23,060,000 Certificates of Participation with $25,070,000 refunding Certificates of Participation.
(A) -As a resuJt of legislation that impacted and provided for limitations on increases in tax levy amounts (P.L. 2007, c.62), the characterization of certain lease payment obligations have been modified as of July l, 2007. As of and subsequent to that date, any lease payment obligations that involve asset acquisitions with estimated useful lives offive (5) years or greater, those obligations are to be classified as debt, in accordance with debt authorized under N.J.S.A. 40A:2-3 et seq. Lease obligations with respect to assets with estimated useful lives ofless than five years and all lease obligations issued prior to July 1, 2007, are not considered debt of the local unit COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS -REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
16) LEASE AGREEMENTS RECEIVABLE
The County reports the following lease agreements within the General Capital Fund balance sheet as at December 31,2013 and 2012:
2013 2012 Final Amount Amount Payment Lessee Recorded Recorded Date
County of Somerset, NJ $ 1,410,035 $ 1,836,049 May 1, 2016 City of New Brunswick, NJ 11,158,069 11,503,069 May 1, 2029
$12.568.104 $13,332,118
The County has authorized and entered into a lease agreement receivable with the County of Somerset, New Jersey in conjunction with the construction of the youth detention center as part of a cost-share agreement.
The County has authorized and executed a lease agreement with the City ofNew Brunswick, New Jersey in connection with the Civic Square II Project.
17) LEASE AGREEMENT- TAMARACK GOLF COURSE
Pursuant to a Lease and Agreement, dated as of April 1, 1996 (the "Lease and Agreement"), between the Authority and the County, the Authority has acquired a leasehold interest in the Golf Course for a period of 19 years. The Lease and Agreement provides that the Authority shall be responsible for the operation and maintenance of the Golf Course and shall be entitled to all revenues and user fees related to the Golf Course. In addition, the Authority shall have the ability to make alterations, additions and improvements to the Golf Course (at its own expense). The Lease and Agreement provided that the Authority will pay the County any Net Profits after Reserves for capital improvements/investments on an annual basis. During 2013 and 2012 the County has budgeted and realized revenues in the amount of $250,000 and $250,000 respectively.
18) PROJECT ADVANCES/RECEIVABLES
Through the course of its operations and as a facilitator for various projects, the County of Middlesex participates with various other governmental units and agencies, some which are related parties and under GAAP, considered component units, by either advancing funds on specific projects or as the lead agency in the financing for these projects. To the extent the County has advanced funds or issued debt obligations to finance projects, which participation by the other units or agencies are owed to the County, those advances/receivables are recorded within the County's financial statements as receivables, offset by reserves. None of the receivables are recorded as a component of fund balance. Generally, these receivables/advances are utilized to offset County debt services payments when the receivables come due, based upon agreed-upon payback schedules. Project receivables/advances currently recorded included Civic Square projects, Juvenile Detention Center, Heidrich Center Hotel/Conference Project, the Middlesex County Improvement Authority (MCIA), Shari Borden Annuity, Built America Bond Subsidy (BAB) and Sayreville Economic Redevelopment Agency (SERA).
The lease agreement between the Somerset County Youth Detention Center and the County of Middlesex was for an original amount of$5,990,398 with payments beginning in 1999 and final payment in 2016. At December 31, 2013 the receivable balance to the County of Middlesex from the Somerset County Youth Detention Center was $1,410,035.
-66- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
18) PROJECT ADVANCES/RECEIVABLES (cont'd)
The lease agreement between the City ofNew Brunswick Civic Square II and the County of Middlesex was for an original amount of $13,068,069 with payments beginning in 2005 and final payment in 2029. At December 31,2013 the receivable balance to the County of Middlesex from the City ofNew Brunswick Civic Square II was $11,158,069.
The 2008 loan agreement between the MCIA and the County of Middlesex for acquisitions through the lease purchase financing program was for an original amount of $1,790,881 with payments beginning in 2009 and final payment in 2023. At December 31, 2013 the receivable balance to the County of Middlesex from the MCIA was $589,926.
The loan agreement between the Heidrich Center Hotel Project and the County of Middlesex was for an original amount of $3,000,000 with payments beginning in 2008 and final payment in 2037. At December 31, 2013, the receivable balance to the County of Middlesex from the Heidrich Center Hotel Project, in the form of Senior Revenue Bonds, Series A, was $2,400,000, and all payments have been received as scheduled. With respect to the Heidrich Center Project, the debt service requirements for Series A bonds have been satisfied through January 2012, however based upon the lack of timely deposits to certain debt service reserves required of the trustee agreement, the trustee has issued the Heidrich Center Project a notice of event of default. The Heidrich Center Project is in the process of reviewing its requirements for compliance with the trustee agreement based upon the notification. No amount of the County's fund balance is impaired based upon this current status.
The loan agreement between the SERA and the County of Middlesex was for an original amount of $11,703,384 with payments beginning in 2009. At December 31, 2013 the receivable balance to the County ofMiddlesex from the SERA was $3,215,118.
The 2009 loan agreement between the MCIA and the County of Middlesex for acquisitions through the lease purchase financing program was for an original amount of $1,535,517 with payments beginning in 20 I 0 and final payment in 2024. At December 31, 2013 the receivable balance to the County of Middlesex from the MCIA was $1,178,925.
The 2009 subsidy agreement between Built America Bond and the County of Middlesex is to offset the costs for the 2009 Open Space Trust fund Revenue Bonds, Series 2009 in the amount of$40,000,000. The original amount of the subsidy was $6,800,940 with payments beginning in 2010 and final payment in 2029. At December 31, 2013 the receivable balance to the County of Middlesex from the Built America Bond was $5,221,753.
The 2011 loan agreement between the MCIA and the County of Middlesex for acquisitions through the lease purchase financing program was for an original amount of $270,145 with payments beginning in 2012 and final payment in 2016. At December 31,2013 the receivable balance to the County of Middlesex from the MCIA was $166,141.
The 2013 loan agreement between the MCIA and the County of Middlesex for acquisitions through the lease purchase financing program was for an original amount of $237,990 with payments beginning in 2014 and final payment in 2018. At December 31,2013 the receivable balance to the County of Middlesex from the MCIA was $237,990.
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19) HEALTH AND HOSPITALS
The County provides certain medical and health services to residents through the Raritan Bay Mental Health Center, several health clinics and the Roosevelt Care Center (the "Center"). Effective June 14, 1997, the Board of Chosen Freeholders transferred operation of, including the license to operate the Center, to the Middlesex County Improvement Authority ("MCIA"). On May 6, 1999, the Board of Chosen Freeholders adopted a resolution authorizing the transfer of ownership of the Center from the County to the MCIA. On November 15, 1999, the Board of Chosen Freeholders adopted a resolution affirming the sale of the Center to the MCIA. Agreements and contracts authorizing the transfer of the lands and buildings were executed on January 19, 2000 and title of the property was transferred to the MCIA.
The Middlesex County Board of Chosen Freeholders, by way of Resolution 01-340, unanimously voted to proceed with the construction of a new 180-bed state-of-the-art long-term care County Facility ("County Facility") to replace the outdated 100-bed Roosevelt Care Center Annex. In furtherance of Resolution 01- 340, the Middlesex County Board of Chosen Freeholders unanimously adopted a $19 million bond ordinance number 331 providing for the construction of the new long-term care County Facility. The new County Facility was substantially completed on January 21, 2005 and a Certificate of Occupancy was issued. By Resolution 05-527, the MCIA acknowledged substantial completion and acceptance of the new County facility. The MCIA owns and operates the new County Facility.
The Board of Chosen Freeholder has determined that its 180-bed capacity would not be sufficient to meet the future long-term care needs of the County. To this end, the Middlesex County Improvement Authority is proceeding with the design and construction of a second, new 120-bed extended-care facility roughly on the site presently occupied by the "A" Wing of the existing Roosevelt Care Center. It is believed that such a new facility will offer substantial efficiencies of operation and allow for an optimal staff-to-patient ratio, while, at the same time, maximizing the level of care and quality of life which can be provide for residents.
The historic, original portions of the existing Roosevelt Care Center will now be renovated for use as a senior residential facility with medical services located on site. It is hoped that this mix of assisted living and extended-care services create a campus environment, which will allow senior residents to transition from one level of care to the next, smoothly, and without dislocation or relocation.
20) COMMITMENTS AND CONTINGENCIES
As of the date ofthis report, the County had litigation pending. This litigation can be generally categorized as negligence claims, workmen's compensation, condemnation cases and other miscellaneous cases. Management's review of the litigation pending indicates that any judgments rendered against the County will not have a material adverse impact on the County's financial position.
As more fully described in Note 12, the County of Middlesex is self-insured for general liability, police liability, medical malpractice liability, public officials' liability and property damage to County vehicles and for Worker's Compensation with the exception of claims which occurred between April 1, 1998 and June 2, 2000. The estimated reserve requirement for these claims is set forth in Note 12.
The County participates in a number of federal and state assisted programs that are subject to audit and adjustment by the respective grantors. The audits of these programs for or including the years ended December 31, 2013 and 2012 may have not been conducted or completed as of the date of this report. Grantor agencies reserve the right to conduct additional audits of the County's grant program for economy, efficiencies and program results which may result in disallowed costs to the County. However, County management does not believe such audits would result in any material amounts of disallowed costs.
-68- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31,2013 AND DECEMBER 31,2012
21) SUBSEQUENT EVENTS
-March 6, 2014-
The County's 2014 operating budget was adopted.
-March 20, 2014-
The Board of Chosen Freeholders finally adopted an ordinance authorizing the guaranty by the county of the payment of principal of and interest on the county-guaranteed lease revenue refunding bonds (Middlesex Regional Educational Services Commission Projects) issued by the Middlesex County Improvement Authority in an aggregate principal amount not to exceed $12,500,000 for the purpose of refunding the outstanding and callable county-guaranteed lease revenue refunding bonds (Middlesex Regional Educational Services Commission Projects), Series 2004.
- May 8, 2014-
The Board of Chosen Freeholders finally adopted a Bond Ordinance providing for 2014 general capital improvements by and in the County, appropriating $24,761,000 therefore and authorizing the issuance of $23,581,904 bonds and notes ofthe County for financing such appropriation.
The Board of Chosen Freeholders finally adopted a Bond Ordinance providing for the acquisition of capital equipment and the undertaking of various 2014 capital improvements at and for facilities of Middlesex County College, appropriating $2,000,000 therefore and authorizing the issuance of $2,000,000 bonds and notes of the County for financing such appropriation.
The Board of Chosen Freeholders Finally adopted a Bond Ordinance providing for the undertaking of 2014 capital improvements at and for certain facilities of Middlesex County College, appropriating $3,200,000 therefore and authorizing the issuance of$3,200,000 bond or notes of the County of Middlesex, State of New Jersey, for financing such appropriation, the principal of and interest on the aggregate principal amount of which will be entitled to state aid, pursuant to Chapter 12 of the laws of New Jersey of 1971.
The Board of Chosen Freeholders finally adopted a Bond Ordinance providing for 2014 general capital improvements and the acquisition of equipment for the Middlesex County Vocational and technical High Schools, appropriating $3,100,000 therefore and authorizing the issuance of $3,100,000 bond or notes of the County for financing such appropriation.
The Board of Chosen Freeholders finally adopted a Bond Ordinance providing for the undertaking of 2014 capital improvements at and for certain facilities of Middlesex County College, in connection with the State building our future bond act program (pursuant to which the State provides 75% matching grant funds); Appropriating $3,400,000 therefore and authorizing the issuance of $3,400,000 bonds or notes of the County for financing such appropriation.
-69- COUNTY OF MIDDLESEX, NEW JERSEY NOTES TO FINANCIAL STATEMENTS- REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31, 2013 AND DECEMBER 31, 2012
21) SUBSEQUENT EVENTS (cont'd)
- May 22, 2014-
The Board of Chosen Freeholders finally adopted a Bond Ordinance providing for the acquisition of deed title to real property designated as 181 How Lane, New Brunswick (Lot 19 .03, Block 597.01 on the Official Tax Map of the City ofNew Brunswick) occupied by the Middlesex County Board of Social Services, by and for the appropriating $7,500,000 therefor and authorizing the issuance of$7,125,000 bonds or notes of the County for financing such appropriations.
The Board of Chosen Freeholders finally adopted a Bond Ordinance providing for the undertaking of2013- 14 capital improvements at and for certain facilities of Middlesex County College, located within the County appropriating $4,250,000 therefore and authorizing the issuance of $4,250,000 bonds or notes of the County of Middlesex, State of New Jersey, for financing such appropriation, the principal of and interest on the aggregate principal amount of which will be entitles to state aid, pursuant to Chapter 12 of the laws ofNew Jersey of 1971.
-June 17, 2014-
The County closed on $19,710,000 aggregate principal amount of General Obligation Bonds, consisting of $6,960,000 General Improvement Bonds, Series 2014, $2,000,000 County College Bonds, Series 2014, $3,100,000 Vocational-Technical School Bonds, Series 2014, $3,400,000 County College Bonds, Series 2014 (Building Our Future Bond Act, 2012 NJ Laws c.41) and $4,250,000 County College Bonds, Series 2014 (County College Bond Act, 1971 N.J. Laws C 12, as Amended).
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APPENDIX B
PROPOSED FORM OF BOND COUNSEL OPINION
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September 30, 2014
Chairman and Members of the Middlesex County Improvement Authority Cranbury, New Jersey
Ladies and Gentlemen:
We have served as bond counsel to the Middlesex County Improvement Authority (the "Authority") in connection with the issuance of $17,275,000 County-Guaranteed Capital Equipment and Improvement Revenue Bonds, Series 2014 (the "Bonds") by the Authority.
The Bonds are being authorized and issued under and pursuant to the County Improvement Authorities Law, constituting chapter 183 of the Laws of New Jersey of 1960, as amended and supplemented (the "Act"), a resolution of the Authority duly adopted on August 13, 2014 entitled, "Resolution of the Middlesex County Improvement Authority Authorizing the Issuance of County-Guaranteed Capital Equipment and Improvement Revenue Bonds" (the "General Bond Resolution") and a resolution of the Authority duly adopted on August 13, 2014 entitled, "Resolution Of The Middlesex County Improvement Authority Authorizing Certain Actions And Approving Certain Documents Necessary In Connection With The Issuance Of The Authority's Proposed Not To Exceed $18,000,000 Aggregate Principal Amount Of County-Guaranteed Capital Equipment And Improvement Revenue Bonds, Series 2014" (the "Determination Resolution") (collectively, the General Bond Resolution and Determination Resolution are hereinafter the "Bond Resolution"). Capitalized terms used herein and not otherwise defined shall have the same meanings ascribed to such terms in the Bond Resolution.
The Bonds are dated and shall bear interest from their date of delivery, payable semiannually on March 15 and September 15 in each year until maturity, commencing March 15, 2015 at the respective rates per annum, and shall mature on September 15 in each year on the dates and in the respective principal amounts, shown below:
B-1 #7687350.1(104875.111) Chairman and Members of the Middlesex County Improvement Authority September 30, 2014 Page 2
Principal Interest Principal Interest Year Amount Rate Year Amount Rate 2015 $3,330,000 1.50% 2018 $3,530,000 3.00% 2016 3,360,000 2.00 2019 3,630,000 3.00 2017 3,425,000 3.00
The Bonds are not subject to redemption prior to their stated maturities.
Principal of the Bonds will be payable at the principal corporate trust office of the trustee, TD Bank, National Association, Cherry Hill, New Jersey (the "Trustee"). Interest will be payable by wire transfer of immediately available funds or by check mailed by the Trustee, acting as Paying Agent to the registered owners thereof appearing on the record books of the Authority as of each March 1 and September 1.
The Bonds will be issued in fully registered form, without coupons, in the form of one certificate for the aggregate principal amount of Bonds maturing in each year, initially registered in the name of and held by Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), an automated depository for securities and clearinghouse for securities transactions which will act as security depository for the Bonds. Purchases of the Bonds will be made in book- entry only form, without certificates, in the denomination of $5,000 or any integral multiple thereof. So long as DTC or its nominee, Cede & Co., is the registered owner of the Bonds, payments of the principal of and interest on the Bonds will be made by wire transfer directly to Cede & Co., as nominee for DTC. Disbursal of such payments to DTC participants is the responsibility of DTC and disbursal of such payments to the beneficial owners of the Bonds is the responsibility of DTC participants.
The Bonds are being issued for the purpose of (i) financing the undertaking, acquisition and installation, as applicable, of certain Improvements and/or Items of Equipment for various participant municipalities located in the County of Middlesex, State of New Jersey, including the County of Middlesex, State of New Jersey (the "County") (each, including the County, a "Municipality" and collectively, the "Municipalities") pursuant to a Loan and Security Agreement dated as of September 30, 2014, by and between the Authority and each applicable Municipality (each, a “Loan Agreement” and collectively, the “Loan Agreements”) and/or a Lease and Agreement dated as of September 30, 2014, by and between the Authority and each applicable Municipality (each, a "Lease" and collectively, the "Leases") and (ii) paying certain costs incurred in connection with the sale, issuance and delivery of the Bonds.
We have reviewed a record of proceedings in connection with the adoption by each applicable Municipality of a loan ordinance approving and authorizing the entering into, execution and delivery of a Loan Agreement with the Authority relating to the issuance of the Bonds (each, a “Loan Ordinance”) and/or a lease ordinance approving and authorizing the entering into, execution and delivery of a Lease with the Authority relating to the issuance of the Bonds (each, a "Lease Ordinance"), pursuant to which each Municipality has entered into a Loan Agreement and/or a Lease, as applicable, with the Authority, which Loan Agreement sets forth the terms of the loan from the Authority for the Improvements and Items of Equipment and which Lease sets forth the terms
#7687350.1(104875.111) B-2 Chairman and Members of the Middlesex County Improvement Authority September 30, 2014 Page 3 and conditions under which such Municipality has leased certain Items of Equipment from the Authority.
We have also reviewed a record of proceedings of the County in connection with the adoption of an ordinance by the Board of Chosen Freeholders of the County finally adopted August 21, 2014 entitled, "An Ordinance Authorizing The Guaranty By The County Of Middlesex, State Of New Jersey Of The Payment Of Principal Of And Interest On The County-Guaranteed Capital Equipment And Improvement Revenue Bonds, Issued By The Middlesex County Improvement Authority In An Aggregate Principal Amount Not To Exceed $18,000,000 And Authorizing A Public Hearing To Be Held Thursday, August 21, 2014 At 7:00 P.M., Authorizing Publication Thereof, Consenting To Such Financing And Determining Certain Other Matters In Connection Therewith" (the "Guarantee Ordinance"), and a record of proceedings in connection with the execution of an agreement, dated as of September 30, 2014, by and between the Authority and the County and acknowledged by the Trustee entitled, "County Guarantee Agreement By and Between Middlesex County Improvement Authority and County of Middlesex, State of New Jersey" (the "Guarantee Agreement"). Pursuant to the Guarantee Ordinance, the County and the Authority have entered into the Guarantee Agreement, which sets forth the terms and conditions pursuant to which the County has agreed to unconditionally and irrevocably guarantee the punctual payment of the principal of and interest on the Bonds when due.
Based upon our review of and subject to the foregoing, we are of the opinion that:
1. The Authority is a body corporate and politic and is duly created and validly existing under the provisions of the Act and has the right and lawful authority under the Act to (a) acquire the Equipment, (b) pay the Cost of the Equipment or cause the same to be paid with the proceeds of the Bonds and (c) loan and/or lease the Improvements and/or Equipment to each applicable Municipality in accordance with the terms and provisions of the Bond Resolution and the Loan Agreements and/or Leases, as applicable.
2. The Authority has the right and power under the Act to adopt the Bond Resolution, and the Bond Resolution has been duly and lawfully adopted by the Authority, is in full force and effect and is valid and binding upon the Authority and enforceable in accordance with its terms, and no other authorization for the Bond Resolution is required. The General Bond Resolution creates the valid pledge that it purports to create on the Pledged Property, subject to the application thereof to the purposes and on the conditions as provided in the General Bond Resolution.
3. The Authority is duly authorized and entitled to issue the Bonds and the same have been duly and validly authorized, sold, executed and issued by the Authority in accordance with the Constitution and statutes of the State of New Jersey, including the Act and the Bond Resolution, and the Bonds constitute valid and legally binding, direct and special obligations of the Authority the principal of and interest on which is payable solely from Revenues and secured by a lien on the Pledged Property of the Authority, subject to certain conditions contained in the General Bond Resolution, enforceable in accordance with their terms and the terms of the General Bond Resolution and of the Act and entitled to the benefits of the General Bond Resolution and the Act. The punctual payment of the principal of and interest on the Bonds has been and is unconditionally guaranteed by the County. The Bonds are not a debt or liability of the State or of any political subdivision thereof #7687350.1(104875.111) B-3 Chairman and Members of the Middlesex County Improvement Authority September 30, 2014 Page 4 other than the Authority and, as applicable, under and limited by the County Guarantee, the County, and shall not create or constitute any indebtedness, liability or obligation of the State or of any political subdivision thereof other than the Authority and, as applicable, under and limited by the County Guarantee, the County, or be or constitute a pledge of the faith and credit of the State or of any political subdivision thereof other than, as applicable, under and limited by the County Guarantee, the County.
4. The Authority and each applicable Municipality have the power and the right to authorize the entering into, execution and delivery of the Loan Agreement and/or the Lease, as applicable, and each Loan Agreement and/or Lease has been duly authorized, executed and delivered by the Authority and each applicable Municipality. Each Loan Agreement and/or Lease creates and constitutes a legal, valid and binding obligation of the Authority and each applicable Municipality, respectively, and such obligations are enforceable in accordance with their respective terms.
5. Each applicable Municipality is obligated to make any required payment under the terms of the Loan Agreement out of the first funds becoming legally available to each such Municipality for such purpose and to provide funds for such payments if not otherwise available, from the levy of ad valorem taxes upon all the taxable property in such applicable Municipality, without limitation as to rate or amount.
6. Each applicable Municipality is obligated to make any required payment under the terms of the Lease out of the first funds becoming legally available to each such Municipality for such purpose and to provide funds for such payments if not otherwise available, from the levy of ad valorem taxes upon all the taxable property in such applicable Municipality.
7. The County has the right and power to adopt the County Guarantee, and the County Guarantee has in all respects been duly authorized, executed, delivered and published as required by law, creates a valid and legally binding obligation of the County and is enforceable in accordance with its terms. The County is obligated to make any required payment under the terms of the County Guarantee out of the first funds becoming legally available to the County for this purpose and to provide the funds for such payments, if not otherwise available, from the levy of ad valorem taxes upon all the taxable property in the County, without limitation as to rate or amount. The Bonds are entitled to the benefits of the County Guarantee and the Trustee has the right to receive payments under the terms of the County Guarantee pursuant to the General Bond Resolution, which payments are to be applied for the benefit of the Holders of the Bonds. The County Guarantee constitutes a general obligation of the County payable from available revenues of the County, including ad valorem taxes levied upon all the taxable property within the jurisdiction of the County that is subject to the levy of ad valorem taxes without limitation as to rate or amount, so long as the Bonds remain Outstanding. The County Guarantee will remain in full force and effect for as long as the Bonds remain Outstanding.
8. The County and the Authority have the power and the right to authorize the entering into, execution and delivery of the Guarantee Agreement and the Guarantee Agreement has been duly authorized, executed and delivered by the County and the Authority. The Guarantee Agreement creates and constitutes a legal, valid and binding obligation of the County and the #7687350.1(104875.111) B-4 Chairman and Members of the Middlesex County Improvement Authority September 30, 2014 Page 5
Authority, respectively, and each such obligation is enforceable in accordance with its respective terms.
9. The Internal Revenue Code of 1986, as amended and supplemented (the “Code”), sets forth certain requirements which must be met at the time of, and on a continuing basis subsequent to, the issuance and delivery of the Bonds for the interest thereon to be and remain excludable from gross income for Federal income tax purposes under Section 103 of the Code. Noncompliance with such requirements could cause interest on the Bonds to be included in gross income for Federal income tax purposes retroactive to the date of initial issuance and delivery of the Bonds. The Authority has covenanted in the Bond Resolution and in its arbitrage certificate to do and perform all acts permitted by law and necessary to assure that interest paid on the Bonds be and remain excluded from the gross income of the owners thereof for Federal income tax purposes pursuant to Section 103(a) of the Code.
Under existing statutes, regulations, rulings and court decisions and assuming continuing compliance by the Authority with the requirements of the Code described in the preceding paragraph, interest on the Bonds is not includable for Federal income tax purposes in the gross income of the owners of the Bonds pursuant to section 103 of the Code. The Bonds are not “specified private activity bonds” within the meaning of Section 57 of the Code and, therefore, the interest on the Bonds will not be treated as a preference item for purposes of computing the Federal alternative minimum tax imposed by Section 55 of the Code. However, the interest on the Bonds owned by corporations will be included in such corporations’ “adjusted current earnings” (as defined in Section 56(g) of the Code) in calculating such corporations’ alternative minimum taxable income for purposes of determining the Federal alternative minimum tax.
10. We are also of the opinion that, under existing laws of the State of New Jersey, interest on the Bonds and any gain on the sale thereof are not includable in gross income under the New Jersey Gross Income Tax Act, 1976 N.J. Laws c. 47, as amended and supplemented.
Except as stated in paragraphs 9 and 10 above, we express no opinion as to any Federal, state or local tax consequences of the ownership or disposition of the Bonds. Furthermore, we express no opinion as to any Federal, state or local tax law consequences with respect to the Bonds, or the interest thereon, if any action is taken with respect to the Bonds or the proceeds thereof upon the advice or approval of other bond counsel.
We have examined an executed and authenticated Bond and, in our opinion, the form of said Bond and its execution and authentication are regular and proper.
From and after the date hereof, certain requirements and procedures contained or referred to in the Bond Resolution and other relevant documents may be changed and certain actions may be taken, under the circumstances and subject to the terms and conditions set forth in such documents, upon the advice or with the approving opinion of nationally recognized bond counsel. We express no opinion as to any Bond, or the interest thereon, if any such change occurs or action is taken upon the advice or approval of other bond counsel.
#7687350.1(104875.111) B-5 Chairman and Members of the Middlesex County Improvement Authority September 30, 2014 Page 6
This opinion is qualified to the extent that the enforceability (but not the validity) of the Bond Resolution, the Bonds, the Loan Agreements, the Leases and the Guarantee Agreement may be limited by any applicable bankruptcy, insolvency, debt adjustment, moratorium, reorganization or other similar laws affecting creditors' rights generally and as to the availability of any particular remedy.
Very truly yours,
WILENTZ, GOLDMAN & SPITZER, P.A.
#7687350.1(104875.111) B-6
APPENDIX C
COPY OF THE BOND RESOLUTION
[ THIS PAGE INTENTIONALLY LEFT BLANK ]
TABLE OF CONTENTS Page
ARTICLE I ...... 1 DEFINITIONS AND STATUTORY AUTHORITY ...... 1 Section 101. Definitions...... 1 Section 102. Authority for this Resolution...... 16 Section 103. Resolution to Constitute Contract...... 16
ARTICLE II ...... 17 AUTHORIZATION AND ISSUANCE OF BONDS ...... 17 Section 201. Authorization of Bonds...... 17 Section 202. General Provisions for Issuance of Bonds...... 17 Section 203. The Series 2014 Bonds...... 21 Section 204. Book Entry System...... 22 Section 205. Refunding Bonds...... 25 ======ARTICLE III ...... 27 GENERAL TERMS AND PROVISIONS OF BONDS ...... 27 RESOLUTION OF THE MIDDLESEX COUNTY IMPROVEMENT AUTHORITY AUTHORIZING THE ISSUANCE OF COUNTY- Section 301. Obligation of Bonds; Medium of Payment; Form and Date; GUARANTEED CAPITAL EQUIPMENT AND IMPROVEMENT Letters and Numbers...... 27 REVENUE BONDS Section 302. Legends...... 27 Section 303. Execution of Bonds...... 28 Section 304. Authentication of Bonds...... 28 ======Section 305. Transfer, Exchange and Registry of Bonds and Agency Therefor...... 28 Section 306. Reissuance of Mutilated, Destroyed, Stolen or Lost Bonds...... 29 Section 307. Temporary Bonds...... 30 Section 308. Payment of Interest on Bonds; Interest Rights Preserved...... 30 Section 309. Cancellation and Destruction of Bonds...... 31
ARTICLE IV ...... 32 REDEMPTION OF BONDS ...... 32 Section 401. Privilege of Redemption and Redemption Price...... 32 Section 402. Redemption at the Election or Direction of the Authority...... 32 Section 403. Redemption Otherwise Than at the Authority's Election or Direction...... 32 Section 404. Selection of Bonds to be Redeemed...... 33 Section 405. Notice of Redemption...... 33 Section 406. Payment of Redeemed Bonds...... 33
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TABLE OF CONTENTS TABLE OF CONTENTS (cont’d.) (cont’d.) Page Page
ARTICLE V ...... 35 Section 802. Extension of Payment of Bonds...... 58 Section 803. Offices for Servicing Bonds...... 58 ESTABLISHMENT OF FUNDS AND APPLICATION THEREOF ...... 35 Section 804. Further Assurance...... 58 Section 501. The Pledge Effected by this Resolution and Security for Section 805. Power to Issue Bonds and Pledge Pledged Property...... 59 the Bonds...... 35 Section 806. Creation of Liens...... 59 Section 502. Establishment of Funds...... 36 Section 807. Accounts and Reports...... 59 Section 503. Acquisition and Improvement Fund...... 36 Section 808. Payment of Taxes and Charges...... 60 Section 504. Revenue Fund...... 40 Section 809. The Leases or Loan Agreements...... 60 Section 505. Operating Fund...... 40 Section 810. Power to Determine and Collect Rentals and/or Loan Section 506. Payments into Certain Funds...... 41 Payments...... 61 Section 507. Proceeds Fund - Municipal Account(s)...... 41 Section 811. Rentals and/or Loan Payments...... 61 Section 508. Debt Service Fund...... 44 Section 812. Acquisition and Installation of Improvement or Equipment Section 509. Rebate Fund...... 47 and its Operation and Maintenance...... 61 Section 510. Trustee No Obligation for Rebate...... 48 Section 813. Maintenance of Insurance...... 61 Section 511. Moneys Remaining in Funds and Accounts; Section 814. Application of Insurance Proceeds...... 62 Reimbursement of County...... 48 Section 815. Enforcement of Leases and Loan Agreements; Amendments...... 62 ARTICLE VI ...... 49 Section 816. Termination of the Lease or Loan Agreement...... 63 DEPOSITORIES OF MONEYS, SECURITY FOR DEPOSITS AND Section 817. Enforcement of County Guarantee Agreement...... 63 INVESTMENT OF FUNDS ...... 49 Section 818. Enforcement by County Against Municipalities...... 63 Section 819. General Conditions...... 64 Section 601. Depositories...... 49 Section 820. Tax Covenant...... 64 Section 602. Deposits...... 49 Section 821. Secondary Market Disclosure...... 64 Section 603. Investment of Certain Funds...... 50 Section 604. Valuation and Sale of Investments...... 51 ARTICLE IX ...... 66 ARTICLE VII ...... 53 REMEDIES OF BONDHOLDERS ...... 66 LEASES OR LOAN AGREEMENTS WITH MUNICIPALITIES ...... 53 Section 901. Events of Default...... 66 Section 902. Accounting and Examination of Records After Default...... 68 Section 701. Terms and Conditions for Lease or Loan Agreement...... 53 Section 903. Application of Pledged Property After Default...... 68 Section 702. Form of Lease and Loan Agreement...... 53 Section 904. Proceedings Brought by Trustee...... 70 Section 703. Delivery of Documents in Connection with Leases and the Section 905. Restrictions on Bondholder's Action...... 71 Loan Agreements...... 53 Section 906. Remedies Not Exclusive...... 71 Section 704. Default Under Each Lease or Loan Agreement...... 54 Section 907. Effect of Waiver and Other Circumstances...... 71 Section 705. The Trustee's Obligations...... 54 Section 908. Notice of Default...... 72 Section 706. Termination of Each Lease and/or Loan Agreement...... 55 Section 909. Notice to Trustee to Exercise Remedies Under Lease Section 707. Files...... 55 and/or Loan Agreement...... 72 Section 708. County Guarantee...... 56 Section 709. Subrogation of County to Bondholders...... 57
ARTICLE VIII ...... 58 PARTICULAR COVENANTS OF THE AUTHORITY ...... 58 Section 801. Payment of Bonds...... 58
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TABLE OF CONTENTS TABLE OF CONTENTS (cont’d.) (cont’d.) Page Page
ARTICLE XIII ...... 85 ARTICLE X ...... 73 MISCELLANEOUS ...... 85 CONCERNING THE FIDUCIARIES ...... 73 Section 1301. Defeasance...... 85 Section 1001. Trustee; Appointment and Acceptance of Duties...... 73 Section 1302. Unclaimed Funds...... 89 Section 1002. Paying Agents; Appointment and Acceptance of Duties; Section 1303. Evidence of Signatures of Bondholders and Ownership of Bond Registrar...... 73 Bonds...... 90 Section 1003. Responsibilities of Fiduciaries...... 73 Section 1304. Moneys Held for Particular Bonds...... 91 Section 1004. Evidence on Which Fiduciaries May Act...... 74 Section 1305. Preservation and Inspection of Documents...... 91 Section 1005. Compensation...... 74 Section 1306. Parties Interest Herein...... 91 Section 1006. Certain Permitted Acts...... 75 Section 1307. No Recourse on the Bonds...... 91 Section 1007. Resignation of Trustee...... 75 Section 1308. Publication of Notice; Suspension of Publication...... 91 Section 1008. Removal of the Trustee...... 75 Section 1309. Severability of Invalid Provisions...... 92 Section 1009. Appointment of Successor Trustee...... 75 Section 1310. Holidays...... 92 Section 1010. Transfer of Rights and Property to Successor Trustee...... 76 Section 1311. Notices and Demands...... 92 Section 1011. Merger or Consolidation...... 77 Section 1312. Headings...... 92 Section 1012. Adoption of Authentication...... 77 Section 1313. Governing Law...... 92 Section 1013. Resignation or Removal of Paying Agent or Bond Section 1314. Separate Financings...... 93 Registrar and Appointment of Successor...... 77 Section 1014. Conflict Between Provisions of Bond Resolution And ARTICLE XIV ...... 94 County Guarantee Agreement...... 77 BOND FORMS AND EFFECTIVE DATE ...... 94 ARTICLE XI ...... 79 Section 1401. Form of Bonds...... 94 Section 1402. Form of Certificate of Authentication of Trustee or Bond SUPPLEMENTAL RESOLUTIONS ...... 79 Registrar...... 101 Section 1101. Supplemental Resolutions Effective Upon Filing With the Section 1403. Form of County Guarantee...... 101 Trustee...... 79 Section 1404. Effective Date...... 102 Section 1102. Supplemental Resolutions Effective Upon Consent of Trustee and the County...... 80 Section 1103. Supplemental Resolutions Effective With Consent of the County and Bondholders...... 81 Section 1104. General Provisions...... 81
ARTICLE XII ...... 82 AMENDMENTS ...... 82 Section 1201. Mailing and Publication...... 82 Section 1202. Powers of Amendment...... 82 Section 1203. Consent of County and Bondholders...... 82 Section 1204. Modifications by Unanimous Consent...... 84 Section 1205. Exclusion of Bonds...... 84 Section 1206. Notation on Bonds...... 84
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RESOLUTION OF THE MIDDLESEX COUNTY IMPROVEMENT Year all as set forth in Exhibit A attached to the Loan Agreement, professional fees AUTHORITY AUTHORIZING THE ISSUANCE OF COUNTY- incurred for any arbitrage rebate calculation, arbitrage rebate expenses, County GUARANTEED CAPITAL EQUIPMENT AND IMPROVEMENT Guarantee Costs, and all direct and indirect costs and expenses incurred by the REVENUE BONDS Authority and the County related to the enforcement of the Loan Agreement, the County Guarantee and the County Guarantee Agreement, including reasonable attorneys' fees ______related thereto.
Additional Rent shall mean amounts payable by the Municipality to the BE IT RESOLVED by the Middlesex County Improvement Authority as Authority under the Lease, including, but not limited to, the annual Trustee's fee and follows: annual Authority Administrative Expenses, where applicable, allocated to the Municipality on a pro rata basis with all other Municipalities which are parties to this ARTICLE I transaction in relation to the amount of Bonds Outstanding in any Bond Year all as set forth in Exhibit A attached to the Lease, professional fees incurred for any arbitrage DEFINITIONS AND STATUTORY AUTHORITY rebate calculation, arbitrage rebate expenses, County Guarantee Costs, and all direct and indirect costs and expenses incurred by the Authority and the County related to the Except where the context otherwise requires, words importing the singular enforcement of the Lease, the County Guarantee and the County Guarantee number shall include the plural number and vice versa, words importing persons shall Agreement, including reasonable attorneys' fees related thereto. include firms, associations, corporations, districts, agencies and bodies, and words of the masculine gender shall mean and include correlative words of the feminine and Annual Authority Administrative Fee shall mean the annual fee for the neuter gender and vice versa. All times referenced herein shall be to prevailing Eastern general administrative expenses of the Authority as shall be set forth in Exhibit A to the time unless otherwise specifically noted. Lease and Loan Agreement.
Section 101. Definitions. The following terms shall, for all purposes Authority shall mean the Middlesex County Improvement Authority, a of this Resolution, have the following meanings: public body corporate and politic organized and existing under the Act and created pursuant to a resolution of the Board of Chosen Freeholders of the County duly adopted Acceptance Certificate shall mean the certificate substantially in the form on September 6, 1990, and any successor to its duties and functions. as set forth in Exhibit B to the Lease. Authority Administrative Expenses shall mean any and all expenses of Account or Accounts shall mean, as the case may be, each or all of the the Authority and its agents, professionals and employees incurred or to be incurred by accounts established and created under Article V hereof. or on behalf of the Authority in the administration of its responsibilities under this Bond Resolution, the County Guarantee Agreement and the Lease and/or Loan Agreement, Accountant's Certificate shall mean a certificate signed by an including, but not limited to, (i) the Initial Authority Financing Fee, (ii) the Annual independent certified public accountant of recognized standing or a firm of independent Authority Administrative Fee, (iii) all fees and expenses, including, but not limited to, certified public accountants of recognized standing, selected by the Authority, who may indemnification expenses, if any, incurred in connection with the issuance of any Bonds, be the accountant or firm of accountants who regularly audit the books of the Authority. the financing of the Equipment or the compelling of the full and punctual performance of this Bond Resolution and the Lease and/or Loan Agreement in accordance with the Acquisition and Improvement Fund shall mean the Acquisition and terms hereof and thereof, (iv) all fees and expenses, including, but not limited to, Improvement Fund created and established pursuant to Section 502 hereof. continuing disclosure expenses and indemnification expenses, if any, of counsel, Act shall mean the County Improvement Authorities Law, constituting Fiduciaries and others, and (v) any fees and expenses, including, but not limited to, chapter 183 of the Laws of New Jersey of 1960 (N.J.S.A. 40:37A-44 et seq.), as indemnification expenses, if any, incurred by the Paying Agent, the Bond Registrar or amended and supplemented from time to time. the Trustee or any or all Fiduciaries in connection with the performance of their respective fiduciary responsibilities under this Resolution, the County Guarantee Additional Loan Payment shall mean amounts payable by the Agreement and the Lease and/or Loan Agreement, all to the extent not capitalized Municipality to the Authority under the Loan Agreement, including, but not limited to, the pursuant to the requirements of this Resolution, which Authority Administrative annual Trustee's fee and annual Authority Administrative Expenses, where applicable, Expenses shall be paid as Additional Rent or Additional Loan Payments by the allocated to the Municipality on a pro rata basis with all other Municipalities which are Municipality, and where applicable, allocated to each Municipality on a pro rata basis parties to this transaction in relation to the amount of Bonds Outstanding in any Bond with all other Municipalities which are parties to this transaction in relation to the amount
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of Bonds Outstanding in any Bond Year, all as set forth in Exhibit A attached to the described in Section 3.1(a) therein, and redemption premium, if any, to the extent Lease and Loan Agreement. required to redeem the Bonds pursuant to Article IV hereof.
Authorized Authority Representative shall mean any person or persons Bond or Bonds shall mean collectively, the Outstanding Bonds of the authorized to act on behalf of the Authority by a written certificate signed on behalf of Authority issued pursuant to Section 201 hereof, specifically, the not to exceed the Authority by the Chairman or Vice Chairman of the Authority containing the $18,000,000 County-Guaranteed Capital Equipment and Improvement Revenue Bonds, specimen signature of each such person. Series 2014, and Refunding Bonds, if any.
Authorized County Representative shall mean any person or persons Bond Counsel shall mean Wilentz, Goldman & Spitzer, P.A., authorized to act on behalf of the County by a written certificate signed on behalf of the Woodbridge, New Jersey or any other lawyer or firm of lawyers with experience and County by the Director or Deputy Director of the Board of Chosen Freeholders of the nationally recognized expertise in the field of municipal finance selected by the County containing the specimen signature of each such person. Authority.
Authorized Denominations shall mean $5,000 or any integral multiple of Bond Registrar shall mean the Trustee, its successors and assigns, or $5,000. any other commercial bank or trust company organized under the laws of any state of the United States of America or national banking association appointed by the Authority Authorized Municipal Representative shall mean any person or persons to perform the duties of the Bond Registrar enumerated in Section 305 of this authorized to act on behalf of each Municipality by a written certificate signed on behalf Resolution. of each Municipality by the Mayor of each Municipality containing the specimen signature of each such person, which Municipality shall also include the County acting Bond Resolution or Resolution shall mean this Resolution of the in the capacity of a municipal participant, which in the case of the County, such written Middlesex County Improvement Authority Authorizing the Issuance of County- Certificate shall be signed by the Director or Deputy Director of the Board of Chosen Guaranteed Capital Equipment and Improvement Revenue Bonds, adopted by the Freeholders of the County, which form of certificate is set forth as Exhibit F annexed to Authority, as the same may be amended, modified or supplemented in accordance with the Lease and Exhibit B annexed to the Loan Agreement and incorporated by reference the provisions hereof. therein. Bond Year shall mean the twelve (12) month period beginning September Authorized Newspaper shall mean The Bond Buyer, or any successor 15 and ending on September 14 excepting that the first Bond Year with respect to the thereto, or any financial newspaper customarily published at least once a day for at Series 2014 Bonds shall commence on the date of original issuance of the Series 2014 least five (5) days (other than legal holidays) in each calendar week, printed in the Bonds and end on September 14, 2015. English language and of general circulation in the Borough of Manhattan, City and State of New York. Bondholder or Holder of Bonds or Holder shall mean any person who shall be the registered owner of any Bond or Bonds. Basic Loan Payment(s) shall mean the sum of money representing principal and interest for each Improvement or Item of Equipment necessary to amortize Business Day shall mean any day that is not a Saturday, a Sunday or a Debt Service on any Series of Bonds for such Improvement or Item of Equipment, and legal holiday in the State of New Jersey or the State of New York or a day on which the allocated to the Municipality and payable by the Municipality on each Loan Payment Trustee, the Bond Registrar, the Authority or any Paying Agent is legally authorized to Date, and with respect to the Series 2014 Bonds, shall mean the sum set forth in Exhibit close. A to the Loan Agreement and as described in Section 3.1(a) therein, and redemption premium, if any, to the extent required to redeem the Bonds pursuant to Article IV Capital Equipment and Improvement Program shall mean the financing hereof. of various capital improvements to be undertaken by and the acquisition, installation and, as applicable, subsequent leasing of certain capital equipment, including but not Basic Rent shall mean the sum of money representing principal and limited to police and passenger vehicles, to various governmental entities within the interest for each Improvement or Item of Equipment necessary to amortize Debt Service County, including the County, by the Authority. on any Series of Bonds for such Item of Equipment, and allocated to the Municipality and payable by the Municipality on each Lease Payment Date, and with respect to the Code shall mean the Internal Revenue Code of 1986, as amended from Series 2014 Bonds, shall mean the sum set forth in Exhibit A to the Lease and as time to time, and the applicable regulations thereunder.
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Cost or Costs shall mean and be deemed to include, with respect to any CONSENTING TO SUCH FINANCING AND DETERMINING CERTAIN OTHER Improvement or Item of Equipment for each Municipality, and, where applicable, MATTERS IN CONNECTION THEREWITH". allocated on a pro rata basis with all other Municipalities which may be parties to the transaction with respect thereto, together with any other proper and reasonable item of County Guarantee Costs shall mean all direct and indirect Costs and cost not specifically mentioned herein, whether incurred prior to or after the date of the expenses of the County incurred with respect to its County Guarantee as defined in the Lease and/or Loan Agreement, (a) the costs of payment of, or reimbursement for, County Guarantee Agreement, including amounts paid by the County pursuant to acquisition, installation and financing of each such Improvement or Item of Equipment, Sections 508 and 708 hereof, together with interest on such amounts at an interest rate including, but not limited to, advances or progress payments, installation costs, equal to the County's cost of obtaining funds required to make such payments administrative costs and capital expenditures relating to installation, financing (including, but not limited to, lost earnings on the investment of available funds used to payments, sales taxes, excise taxes, costs of feasibility, environmental and other make such payment or the net interest cost of such Series of Bonds, whichever is reports, inspection costs, permit fees, filing and recordation costs, printing costs for all higher, as shall be determined by the County), reasonable attorneys' fees and other documents, reproduction and binding costs, fees and charges of the Trustee pursuant costs arising out of the required payment or expenses for the collection, enforcement to this Resolution, financing documents, legal fees and charges, financial, accounting and repayment pursuant to the County Guarantee, together with interest accrued on and other professional consultant fees, the Initial Authority Financing Fee for a particular such sum until the time of repayment to the County, but shall not include those costs Series of Bonds, all professional and consulting fees and charges of the Authority and and expenses incurred by the County in connection with curing its own default under the the County, costs of rating agencies, bond insurance, bond insurers or credit ratings, Lease and/or Loan Agreement. fees for the printing, execution, transportation and safekeeping of the Bonds, and any charges and fees in connection with any of the foregoing; (b) all other costs which the Debt Service for any period shall mean, as of any date of calculation with Municipality or the Authority shall be required to pay under the terms of any contract or respect to any Series of Bonds, an amount equal to the sum of (i) the interest accruing contracts for the acquisition of any Improvement or Item of Equipment, including, but not during such period on such Bonds except to the extent such interest is to be paid from limited to, the cost of insurance; (c) any sums required to reimburse the Municipality for deposits made from Bond proceeds into the Debt Service Fund, and (ii) that portion of advances made for any of the above items, or for any other costs incurred and for work each Principal Installment which would accrue during such period if such Principal done, which is properly chargeable to any Improvement or Item of Equipment thereof; Installment were deemed to accrue daily in equal amounts from the immediately (d) deposits in any Fund or Account under this Resolution, all as shall be provided in preceding Principal Installment due date or, if there should be no preceding Principal this Resolution; and (e) such other expenses not specified herein as may be necessary Installment due date, from a date one year (or such lesser period as shall be or incidental to the acquisition of any Improvement or Item of Equipment, the financing appropriate if Principal Installments shall become due more frequently than annually) thereof and the placing of the same in use and operation. Cost as defined herein shall preceding the due date of such Principal Installment or from the date of original be deemed to include (i) the cost and expenses incurred by any agent of the Authority issuance of any Series of Bonds, whichever is later. Such interest and Principal or the Municipality for any of the above mentioned items and (ii) all costs and expenses Installments for such Series shall be calculated on the assumption that no Bonds incurred by any agent of the County and the Authority in connection with the adoption, Outstanding at the date of calculation will cease to be Outstanding except by reason of administration and enforcement of the Lease and/or Loan Agreement and the County the payment of each Principal Installment on the due date thereof. The calculations in Guarantee, including but not limited to, County Guarantee Costs. the preceding sentence shall be made on the basis of a 30-day month and a 360-day year. County shall mean the County of Middlesex, State of New Jersey, a public body corporate and politic of the State of New Jersey. Debt Service Fund shall mean the Debt Service Fund created and established in Section 502 hereunder. County Guarantee shall mean the County's unconditional and irrevocable guarantee of the punctual payment of principal of and interest when due on the Bonds Debt Service Requirement with respect to the next Interest Payment duly adopted pursuant to Section 37 of the Act (N.J.S.A. 40:37A-80) and specifically, Date for any Series of Bonds shall mean, (i) in the case of an Interest Payment Date on with respect to the Series 2014 Bonds, duly adopted August 21, 2014 and entitled, "AN which interest only shall be due, interest accrued and unpaid and to accrue to such date ORDINANCE AUTHORIZING THE GUARANTY BY THE COUNTY OF MIDDLESEX, if such Principal Installment or Installments shall be deemed to accrue in the manner STATE OF NEW JERSEY OF THE PAYMENT OF PRINCIPAL OF AND INTEREST provided in clause (ii) of the definition of "Debt Service" set forth in Section 101, and (ii) ON THE COUNTY-GUARANTEED CAPITAL EQUIPMENT AND IMPROVEMENT in the case of an Interest Payment Date on which both interest and a Principal REVENUE BONDS, ISSUED BY THE MIDDLESEX COUNTY IMPROVEMENT Installment or Installments shall be due, interest accrued and unpaid and to accrue to AUTHORITY IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED such date plus the Principal Installment or Installments due on such date. The $18,000,000 AND AUTHORIZING A PUBLIC HEARING TO BE HELD THURSDAY, calculations in the preceding sentence shall be made on the basis of a 30-day month AUGUST 21, 2014 AT 7:00 P.M., AUTHORIZING PUBLICATION THEREOF, and a 360-day year.
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Default Interest shall have the meaning given to such term in Section 308 the Series 2014 Bonds, including, if applicable, any improvements substituted or added hereof. pursuant to the terms of the Loan Agreement.
Default Interest Payment Date shall have the meaning given to such Initial Authority Financing Fee shall mean the amount equal to $50,000 term in Section 308 hereof. for the initial financing fee of the Authority allocated to each Municipality based on the percentage set forth in Exhibit A to each Lease and/or Loan Agreement or as may be Determination Resolution shall have the same meaning as set forth in set forth in a Supplemental Resolution authorizing a Series of Bonds. Section 202(1)(c) hereof. Interest Payment Date shall mean, with respect to the Series 2014 DTC shall mean The Depository Trust Company, New York, New York, a Bonds, each March 15 and September 15, commencing March 15, 2015, and such limited purpose trust company organized under the laws of the State of New York, in its other dates as shall be established by a Supplemental Resolution authorizing a Series capacity as securities depository for any Series of Bonds. of Bonds. In the event an Interest Payment Date is not a Business Day, interest shall be paid on the next succeeding Business Day for interest accrued to the Interest Equipment or Item(s) of Equipment or Vehicles shall mean the capital Payment Date. equipment described in Exhibit A annexed to the Lease and Loan Agreement purchased and acquired with the proceeds of the Series 2014 Bonds, including any item Investment Securities shall mean and include any of the following of capital equipment substituted or added pursuant to Section 8.1(b) of the Lease and securities, if and to the extent the same are at the time legal for investment of the described in Exhibit G annexed thereto or pursuant to the terms of the Loan Agreement. Authority's funds and when authorized by a cash management plan, approved pursuant to N.J.S.A. 40A:5-14: Event of Default shall have the meaning given to such term in Section 901 hereof. a. (1) Bonds or other obligations of the United States of America or obligations guaranteed by the United States of America; Favorable Opinion of Bond Counsel shall mean an opinion of Bond Counsel, addressed to the Authority and the Trustee, to the effect that the action (2) Government money market mutual funds; proposed to be taken is authorized or permitted by this Resolution and the Act and will not adversely affect the exclusion of interest on such Series of Bonds from gross (3) Any obligation that a federal agency or a federal instrumentality has income for purposes of Federal income taxation under section 103 of the Code. issued in accordance with an act of Congress, which security has a maturity date not greater than 397 days from the date of purchase, provided that such obligation bears a Fiduciary or Fiduciaries shall mean the Trustee, the Paying Agent, the fixed rate of interest not dependent on any index or other external factor; Bond Registrar, or any or all of them, as may be appropriate. (4) Bonds or other obligations of the Local Unit or bonds or other Fiscal Year shall mean the twelve (12) month fiscal period of the obligations of school districts of which the Local Unit is a part or within which the school Municipality, the County or the Authority, including any six (6) month transition year of district is located; the Municipality authorized pursuant to chapter 75 of the Laws of New Jersey of 1991. (5) Bonds or other obligations, having a maturity date not more than 397 Fund or Funds shall mean, as the case may be, each or all of the Funds days from the date of purchase, approved by the Division of Investment of the New Jersey created and established in Section 502 herein; provided, however, that such Funds do Department of the Treasury for investment by Local Units; not constitute "funds" in accordance with generally accepted accounting principles. (6) Local government investment pools; Guarantee Agreement or County Guarantee Agreement shall mean the County Guarantee Agreement dated as of September 30, 2014, entered into by and (7) Deposits with the State of New Jersey Cash Management Fund between the County and the Authority wherein the County has irrevocably and established pursuant to section 1 of P.L.1977, c.281 (N.J.S.A. 52:18A-90.4); or unconditionally guaranteed the punctual payment of the principal of and interest on the Series 2014 Bonds and setting forth the terms and conditions of the County Guarantee (8) Agreements for the repurchase of fully collateralized securities, if: with respect to the Series 2014 Bonds, as amended and supplemented. (a) the underlying securities are permitted investments pursuant Improvement or Improvement(s) shall mean the improvements to paragraphs (1) and (3) of this subsection a.; described in Exhibit A annexed to the Loan Agreement undertaken with the proceeds of
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(b) the custody of collateral is transferred to a third party; (2) a "local government investment pool" means an investment pool:
(c) the maturity of the agreement is not more than thirty (30) days; (a) which is managed in accordance with 17 C.F.R. s.270.2a-7;
(d) the underlying securities are purchased through a public (b) which is rated in the highest category by a nationally depository as defined in section 1 of P.L.1970, c.236 (C.17:9- recognized statistical rating organization; 41); and (c) which is limited to U.S. Government securities that meet the (e) a master repurchase agreement providing for the custody and definition of an eligible security pursuant to 17 C.F.R. s.270.2a-7 and repurchase security of collateral is executed. agreements that are collateralized by such U.S. Government securities in which direct investment may be made pursuant to paragraphs (1) and (3) of subsection a. of this b. Any investment instruments in which the security is not physically held by definition; the Local Unit shall be covered by a third party custodial agreement which shall provide for the designation of such investments in the name of the Local Unit and prevent (d) which is in compliance with rules adopted pursuant to the unauthorized use of such investments. Administrative Procedure Act, P.L.1968, c.410 (C.52:14B-1 et seq.) by the Local Finance Board of the Division of Local Government Services in the Department of Community c. Purchase of investment securities shall be executed by the "delivery versus Affairs, which rules shall provide for disclosure and reporting requirements, and other payment" method to ensure that securities are either received by the Local Unit or a third provisions deemed necessary by the board to provide for the safety, liquidity and yield of party custodian prior to or upon the release of the Local Unit's funds. the investments;
d. Any investments not purchased and redeemed from the issuer, government (e) which does not permit investments that: are subject to high money market mutual fund, local government investment pool, or the State of New Jersey price volatility with changing market conditions; cannot reasonably by expected, at the time Cash Management Fund, shall be purchased and redeemed through the use of a national of interest rate adjustment, to have a market value that approximates their par value; or or State bank located within this State or through a broker-dealer which, at the time of utilize an index that does not support a stable net asset value; and purchase or redemption, has been registered continuously for a period of at least two years pursuant to section 9 of P.L.1967, c.93 (N.J.S.A. 49:3-56) and has at least $25 (f) which purchases and redeems investments directly from the million in capital stock (or equivalent capitalization if not a corporation), surplus reserves issuer, government money market mutual fund, or the State of New Jersey Cash for contingencies and undivided profits, or through a securities dealer who makes primary Management Fund, or through the use of a national or State bank located within this State, markets in U.S. Government securities and reports daily to the Federal Reserve Bank of or through a broker-dealer which, at the time of purchase or redemption, has been New York its position in and borrowing on such U.S. Government securities. registered continuously for a period of at least two years pursuant to section 9 of P.L.1967, c.93 (N.J.S.A. 49:3-56) and has at least $25 million in capital stock (or equivalent e. For the purposes of this definition: capitalization if not a corporation), surplus reserves for contingencies and undivided profits, or through a securities dealer who makes primary markets in U.S. Government (1) a "government money market mutual fund" means an investment securities and reports daily to the Federal Reserve Bank of New York its position in and company or investment trust: borrowing on such U.S. Government securities.
(a) which is registered with the Securities and Exchange (g) Capitalized terms used within this definition and not otherwise Commission under the Investment Company Act of 1940, 15 U.S.C. 80a-1 et seq., and defined shall have the meanings ascribed to such terms in the Local Fiscal Affairs Law, as operated in accordance with 17 C.F.R. s.270.2a-7; amended and supplemented (N.J.S.A. 40A:5-1 et seq.).
(b) the portfolio of which is limited to U.S. Government securities f. Investments in, or deposits or purchases of financial instruments made that meet the definition of an eligible security pursuant to 17 C.F.R. s.270.2a-7 and pursuant to this definition shall not be subject to the requirements of the "Local Public repurchase agreements that are collateralized by such U.S. Government securities in Contracts Law", P.L.1971, c.198 (N.J.S.A. 40A:11-1 et seq.). which direct investment may be made pursuant to paragraphs (1) and (3) of subsection a. of this definition; and Notwithstanding the foregoing, only the obligations described in clause a(1) shall be considered to be Investment Securities for purposes of Section 1301 hereof. (c) which is rated by a nationally recognized statistical rating organization.
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Lease shall mean, with respect to the Series 2014 Bonds, that certain Loan Term shall mean the period during which the Loan Agreement is in Lease and Agreement dated as of September 30, 2014 by and between the Authority effect as specified in Section 2.1 of the Loan Agreement. and each Municipality, as approved by the County, and any and all modifications, alterations, amendments and supplements thereto made in accordance with the Month shall mean a calendar month. provisions hereof and the Lease. Moody's shall mean Moody's Investors Service, Inc., a corporation Lease Payment shall mean the Rental Payment consisting of Basic Rent organized and existing under the laws of the State of Delaware, and its successors payable on each Lease Payment Date and, as applicable, Additional Rent payable by and/or assigns, if any. the Municipality upon demand pursuant to Section 3.1(a) and (b) of the Lease, respectively. Municipal Account(s) shall mean each of the account(s) created in the Acquisition and Improvement Fund, Proceeds Fund and Debt Service Fund for each Lease Payment Date shall mean, with respect to the Series 2014 Bonds, Municipality into which moneys, Proceeds, Bond proceeds and investment earnings, as each January 15 and July 15, commencing January 15, 2015, which dates shall not be applicable, allocable to each Municipality, shall be deposited pursuant to Article V later than the first day of the second month immediately preceding each Interest hereof. Payment Date and Principal Installment Date, as applicable, and such other dates determined in accordance herewith as may be set forth in a Supplemental Resolution Municipality or Municipalities shall mean each Municipality, including authorizing a Series of Bonds, if any. In the event a Lease Payment Date is not a the County, or collectively, all of the Municipalities, including the County, each of which Business Day, the Lease Payment shall be made by the Municipality on the next has executed a Lease and/or a Loan Agreement with the Authority for the purposes of succeeding Business Day. undertaking Improvements or acquiring Equipment with the proceeds of the Series 2014 Bonds, all of which are situated in the County or a beneficiary County. Lease Term shall mean the period during which the Lease or the lease of any Item of Equipment, as the case may be, is in effect as specified in Section 2.2 of the Operating Fund shall mean the Operating Fund created and established Lease. under Section 502 of the Bond Resolution.
Loan Agreement shall mean, with respect to the Series 2014 Bonds, that Ordinance shall mean each ordinance adopted by each Municipality certain Loan and Security Agreement dated as of September 30, 2014 by and between approving and authorizing the execution and delivery of the Lease and/or the Loan the Authority and each Municipality, as approved by the County, and any and all Agreement and pledging the full faith and credit of each Municipality for the repayment modifications, alterations, amendments and supplements thereto made in accordance of its obligations under the Lease and/or the Loan Agreement. with the provisions hereof and the Loan Agreement. Outstanding when used with reference to Bonds, shall mean, as of any Loan Payment(s) shall mean the Loan Payment consisting of the Basic date, Bonds theretofore or thereupon being authenticated and delivered under the Loan Payment payable on each Loan Payment Date and, as applicable, an Additional Resolution except: Loan Payment payable by the Municipality upon demand pursuant to Section 3.1(a) and (b) of the Loan Agreement, respectively, and shall also mean the sum of the Basic Loan (i) Bonds canceled by the Trustee at or prior to such date; Payment and Additional Loan Payment described in the Loan Agreement with each (ii) Bonds (or portions of Bonds) for the payment of which Municipality for a particular Series of Bonds. moneys, equal to the principal amount or Redemption Price thereof, as the Loan Payment Date shall mean, with respect to the Series 2014 Bonds, case may be, together with interest to accrue thereon to the date of each January 15 and July 15, commencing January 15, 2015, which dates shall not be maturity or redemption date, shall be held in an irrevocable trust under this later than the first day of the second month immediately preceding each Interest Resolution and set aside for such payment or redemption (whether at or Payment Date and Principal Installment Date, as applicable, and such other dates prior to the maturity); provided that if such Bonds (or portions of Bonds) determined in accordance herewith as may be set forth in a Supplemental Resolution are to be redeemed, notice of such redemption shall have been given as authorizing a Series of Bonds, if any. In the event a Loan Payment Date is not a in Article IV hereof; Business Day, the Loan Payment shall be made by the Municipality on the next (iii) Bonds in lieu of or in substitution for which other Bonds shall succeeding Business Day. have been authenticated and delivered pursuant to Article III or Section 1206 hereof; and
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(iv) Bonds deemed to have been paid as provided in Proceeds Fund shall mean the Proceeds Fund created and established subsections 2 or 3 of Section 1301 hereof. in Section 502 under this Resolution.
Paying Agent or Paying Agents shall mean any bank or trust company Rebate Fund shall mean the Rebate Fund created and established in organized under the laws of any state of the United States or any banking association Section 502 under this Resolution. designated as paying agent for the Bonds, and its successors and assigns and its successor or successors appointed in the manner provided in this Resolution. Record Date shall mean, with respect to the Series 2014 Bonds, each March 1 and September 1 next preceding any Interest Payment Date or such other Person or Persons shall mean any individual, corporation, partnership, dates as set forth in a Supplemental Resolution authorizing a Series of Bonds. joint venture, trust or unincorporated organization or a governmental agency or any political subdivision thereof. Redemption Price shall mean, with respect to any Bond, the principal amount thereof plus the applicable redemption premium thereon, if any, payable upon Pledged Property shall mean (1) the Revenues, (2) the Funds and redemption thereof pursuant to such Bond or this Resolution. Accounts established hereunder (other than the Rebate Fund), including Investment Securities held in any such Funds or Accounts, (3) all of the Authority's right, title and Refunding Bonds shall mean the Bonds, whether issued in one or more interest in and to Vehicles, including any Proceeds and moneys received from the sale Series, authenticated and delivered on original issuance pursuant to Section 205, and thereof and in and to any of the foregoing, and (4) all other moneys, securities or funds any Bonds thereafter authenticated and delivered in lieu of or in substitution for such pledged for the payment of the principal or Redemption Price of and interest on the Bonds pursuant to Article III or Section 1206 hereof. Bonds in accordance with the terms and provisions of this Resolution. Registered Owner shall mean the owner of any Bond which is issued in Principal Installment shall mean, as of any date of calculation, and with fully registered form, as determined on the Record Date, as reflected on the registration respect to any Series of Bonds, so long as any Bonds thereof are Outstanding, (i) the books of the Authority which shall be kept and maintained on behalf of the Authority at principal amount of Bonds of such Series due on a certain future date for which no the principal corporate trust office of the Bond Registrar. Sinking Fund Installments have been established plus any applicable redemption premium thereon, and (ii) any Sinking Fund Installments due on a certain future date for Rent, Rental(s) or Rental Payment shall mean the sum of Basic Rent Series 2014 Bonds of such Series, plus the amount of the sinking fund redemption and Additional Rent described in the Lease with each Municipality for a particular Series premium, if any, which would be applicable upon redemption of the Series 2014 Bonds of Bonds. on such future date in a principal amount equal to such Sinking Fund Installments. Revenue Fund shall mean the Revenue Fund created and established in Principal Installment Date shall mean any date on which any Principal Section 502 hereof. Installment on any Series of Bonds shall become due and payable by the Authority, and, with respect to the Series 2014 Bonds, each September 15, commencing Revenues shall mean (i) all amounts, including Basic Rent and Basic September 15, 2015 on which any Principal Installment shall become due and payable Loan Payments, received by the Authority under the Lease (but excluding Additional by the Authority, or such other date as set forth in a Supplemental Resolution Rent payments made pursuant to Section 3.1(b) and (d) of the Lease) or Loan authorizing a Series of Bonds. In the event a Principal Installment Date is not a Agreement (but excluding Additional Loan Payments made pursuant to Section 3.1(b) Business Day, principal shall be paid on the next succeeding Business Day for the and (d) of the Loan Agreement), (ii) any moneys or securities held pursuant to this Bond Principal Installment payable on the Principal Installment Date. Resolution and paid or required to be paid into the Debt Service Fund, (iii) any payments made by the County to the Authority on behalf of any Municipality pursuant to Proceeds shall mean any insurance, condemnation, performance bond, the County Guarantee, the Guarantee Agreement and Sections 508 and 708 hereof and or any other financial guaranty proceeds paid with respect to any Improvement or Item (iv) any other amounts received from any other source by the Authority and pledged by of Equipment, remaining after payment therefrom of all expenses incurred in the the Authority as security for the payment of a particular Series of Bonds. collection thereof; and, with respect to insurance, if and at such time as a Municipality elects to provide self-insurance under Section 5.3 of the Lease and/or the Loan Series shall mean all of the Bonds authenticated and delivered upon Agreement, any moneys payable from any self-insurance fund of any Municipality which original issuance and pursuant to this Resolution authorizing such Bonds as a separate may lawfully be expended for the purposes for which such self-insurance is provided. Series of Bonds, and any Bonds thereafter authenticated and delivered in lieu of or in substitution for such Bonds pursuant to Article III of this Resolution, regardless of variations in maturity, interest rate, Sinking Fund Installments, or other provisions.
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Series 2014 Bonds shall mean all of the Bonds authenticated and "qualified guarantee" to be made with respect to the Bonds and the present value of all delivered upon original issuance pursuant to Section 203 hereof. of the issue prices for the Bonds. The issue price for each maturity of the Bonds is the initial offering price of such Bonds to the public. Sinking Fund Installment shall mean that designated amount on deposit in the Debt Service Fund which shall be applied by the Trustee to the redemption of Section 102. Authority for this Resolution. This Resolution is Bonds of any Series which amount is established pursuant to clause (8) of paragraph adopted pursuant to the provisions of the Act. (h) of subsection 1 of Section 202 and pursuant to subsection 7 of Section 203 hereof. Section 103. Resolution to Constitute Contract. In consideration of Special Record Date shall have the same meaning given to such term in the purchase and acceptance of any and all of the Bonds authorized to be issued Section 308 hereof. hereunder by those who shall hold the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the Authority and the Holders Standard & Poor's or S&P shall mean Standard & Poor's Ratings from time to time of the Bonds; and the security interest granted and the pledge and Services, a division of The McGraw-Hill Companies, Inc., a corporation organized and assignment made in this Resolution and the covenants and agreements herein set forth existing under the laws of the State of New York, and its successors and/or assigns, if to be performed on behalf of the Authority shall be for the equal benefit, protection and any. security of the Holders of any and all of the Bonds, all of which, regardless of the time or times of their authentication and delivery or maturity, shall be of equal rank without State shall mean the State of New Jersey or any successor to its duties preference, priority or distinction of any of the Bonds over any other thereof, all except and functions. as expressly provided in or permitted by this Resolution. Substitution Certificate shall mean the certificate, if applicable, executed by an Authorized Municipal Representative pursuant to Section 8.1 of the Lease annexed as Exhibit G thereto.
Supplemental Resolution shall mean any resolution supplemental to or amendatory of this Resolution adopted by the Authority in accordance with Section 205 and Article XI hereof, but shall not include the Determination Resolution.
Tax-Exempt Obligations shall mean any Series of Bonds which are issued pursuant to the terms of this Resolution together with an opinion of Bond Counsel to the Authority to the effect that the interest on such Bonds is not includable in gross income for Federal income tax purposes pursuant to the provisions of the Code (notwithstanding the application of the provisions of the Code relating to alternative minimum taxation).
Trustee shall mean with respect to the Series 2014 Bonds and any Series of Bonds issued hereunder, TD Bank, National Association, Cherry Hill, New Jersey and its successors and assigns and any other bank, trust company or national banking association that at any time may be substituted in its place pursuant to this Resolution or appointed trustee pursuant to a Supplemental Resolution.
Yield shall mean the yield as calculated in the manner set forth in section 148 of the Code, which calculation shall not be performed by the Trustee; thus, yield with respect to an investment allocated to the Bonds is that discount rate which produces the same present value when used in computing the present value of all receipts received and to be received with respect to investments and the present value of all the payments with respect to the investments. The yield on the Bonds is that discount rate which produces the same present value on the date hereof when used in computing the present value of all payments of principal, interest and charges for a
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ARTICLE II bankruptcy, insolvency, debt adjustment, moratorium, reorganization or other similar laws affecting creditors' rights generally and the availability of AUTHORIZATION AND ISSUANCE OF BONDS any particular remedy, (i) the Authority has the right and the power under the Act, as amended to the date of such opinion, to adopt this Resolution; Section 201. Authorization of Bonds. 1. The Authority does hereby this Resolution has been duly and lawfully adopted by the Authority, is in determine to finance the undertaking, acquisition and installation (where applicable) or full force and effect, is valid and binding upon the Authority and is cause to be undertaken, acquired and installed Improvements or Items of Equipment enforceable in accordance with its terms and no other authorization for the pursuant to and in accordance with the Act. adoption of this Resolution is required; (ii) this Resolution creates the valid pledge that it purports to create of the Pledged Property; and (iii) the 2. In accordance with the Act and pursuant to the provisions of this Bonds of such Series are valid, binding, direct and special obligations of Resolution, there is hereby authorized to be issued to acquire or install or cause to be the Authority as provided in this Resolution, enforceable in accordance acquired or installed Improvements or Items of Equipment, Bonds of the Authority to be with their terms and the terms of this Resolution and are entitled to the designated as "County-Guaranteed Capital Equipment and Improvement Revenue benefits of this Resolution and of the Act as amended to the date of such Bonds". The Bonds shall be direct and special obligations of the Authority payable opinion, and such Bonds have been duly and validly authorized and solely from Revenues and secured by the Pledged Property. The Bonds are issued in accordance with law, including the Act as amended to the date additionally secured by the County Guarantee. The aggregate principal amount of the of such opinion and in accordance with this Resolution; Bonds that may be executed, authenticated and delivered under this Resolution is limited to the Bonds authorized pursuant to Section 203(2) hereof and Refunding (b) A written order as to the delivery of such Bonds signed by an Bonds. All Bonds issued hereunder shall be issued as County Guaranteed obligations. Authorized Authority Representative, which order shall (i) direct the Each Bond shall bear upon its face the designation so determined for the Series to application of the proceeds of such Bonds and (ii) set forth the maturity which it belongs. schedule for the Bonds and the interest rates payable with respect thereto;
3. The Bonds may, if and when authorized by the Authority pursuant (c) A copy, duly certified by an Authorized Authority to this Resolution and one or more Supplemental Resolutions, be issued in one or more Representative, of this Resolution and the resolution of the Authority Series (if the same has been approved by the County), and the designation thereof, in authorizing the sale of the Bonds and the purchase of such Bonds by an addition to the name "County-Guaranteed Capital Equipment and Improvement underwriter pursuant to a bond purchase contract and the execution of Revenue Bonds", shall include such further appropriate particular designation added to such bond purchase contract by the Authority (the "Determination or incorporated in such title for the Bonds of any particular Series as the Authority shall Resolution") (which Determination Resolution shall not constitute a determine. Each Bond shall bear upon its face the designation so determined for the Supplemental Resolution hereunder); Series to which it belongs. (d) A fully executed copy of the Lease and/or Loan Agreement 4. The Bonds shall not be in any way a debt or liability of the State or executed by each Municipality; of any political subdivision thereof other than the Authority and shall not create or constitute any indebtedness, liability or obligation of the State or any such political (e) A certified copy of the ordinance authorizing the County subdivision, nor be or constitute a pledge of the faith and credit of the State or any such Guarantee along with duly certified copies of the authorization political subdivision, except the Authority, and, pursuant to the County Guarantee, as proceedings related thereto and a fully executed copy of the County applicable under such County Guarantee, the County. Guarantee Agreement;
Section 202. General Provisions for Issuance of Bonds. 1. All of (f) Duly certified copies of each Municipality's ordinance the Bonds of each Series shall be executed by the Authority for the issuance under this approving and authorizing the execution of the Lease and/or Loan Resolution and shall be delivered to the Trustee or the Bond Registrar. Thereupon the Agreement along with duly certified copies of the authorization Trustee or the Bond Registrar shall authenticate and shall deliver the Bonds to the proceedings related thereto; Authority or upon its order, but only upon the receipt by the Trustee of: (g) A fully executed copy of the contract of purchase for the (a) An opinion of Bond Counsel (dated the date the Bonds of Bonds executed by and between the Authority and an underwriter; such Series are initially issued and addressed to the Authority and the Trustee) to the effect that, except insofar as it may be limited by
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(h) In the case of a Series of Refunding Bonds, a copy of the Board of Chosen Freeholders of the County. Any payments which are Supplemental Resolution authorizing such Refunding Bonds, certified by made by the County pursuant to the terms of the County Guarantee and an Authorized Authority Representative, which shall, among other Guarantee Agreement shall be made to the Trustee and shall thereafter provisions, specify, or delegate to an Authorized Authority Representative, be deposited by the Trustee in the Debt Service Fund in accordance with the power to specify: (1) the authorized principal amount, designation and the terms of Section 508(2) hereof; Series of such Bonds; (2) the purposes for which such Series of Bonds are being issued, which shall be for the purpose specified in Section 205 (l) An opinion of counsel to the County (dated the date the hereof; (3) the date, and the maturity date or dates, of the Bonds of such Bonds of such Series are initially issued and addressed to the Authority, Series; (4) the interest rate or rates or the method of calculation of the the County and the Trustee) to the effect that (i) the County has the right interest rate or rates of the Bonds of such Series and the Interest Payment and power under the Act to adopt the County Guarantee and the County Dates therefor; (5) the denominations of, and the manner of dating (except Guarantee has been duly and lawfully adopted by the County, is in full as otherwise provided herein), numbering and lettering the Bonds of such force and effect and is valid and binding upon the County enforceable in Series, provided that such Bonds shall be in denominations of $5,000 or accordance with its terms and no other authorization for the Guarantee any multiple thereof as authorized by such Supplemental Resolution; (6) Ordinance is required; (ii) the County Guarantee is the valid, binding, the Paying Agent or Paying Agents and the place or places or methods of general obligation of the County enforceable in accordance with its terms payment of the principal and Redemption Price, if any, of, and interest on, and payments thereunder are payable out of the first funds becoming the Bonds of such Series; (7) the Redemption Price(s), if any, and, subject legally available to the County for such purpose and if such funds are not to Article IV, the redemption terms for the Bonds of such Series; (8) the available, the County has the power and is obligated to levy ad valorem amount and due date of each Sinking Fund Installment, if any, for Bonds taxes upon all the taxable property in the County for the purpose of of like maturity of such Series; (9) if so determined by the Authority, making payments under the County Guarantee, without limitation as to provisions for the sale of the Bonds of such Series; (10) the amount (or rate and amount; and (iii) the County Guarantee has been duly and validly the method of determining the amount), if any, to be deposited from the authorized and issued in accordance with the law, including the Act, and is proceeds of such Series of Bonds in the Debt Service Fund and provisions in full force and effect on the date of issuance of the Bonds; provided that for the application thereof to the payment of all or a portion of the interest such opinion may take exception for limitations imposed by or resulting on such Series of Bonds or any other Series of Bonds; and (11) the form from bankruptcy, insolvency, moratorium, reorganization or other laws and of the Bonds of such Series and of the Trustee's certificate of equitable principles affecting creditors' rights generally and that no opinion authentication, which form shall be substantially in the form set forth in is being rendered as to the availability of any particular remedy ("Creditors' Section 1401, with such variations, omissions and insertions as are Rights Limitations"); required or permitted by this Resolution and consented to by the County; (m) An opinion of Bond Counsel (given separately or in (i) Such further documents, moneys and securities as are conjunction with another opinion) to the effect that each Lease and/or required by the provisions of Sections 203 or 205 or Section 703 or Article Loan Agreement between the Authority and the applicable Municipality XI or any Supplemental Resolution adopted pursuant to Article XI hereof; constitutes a legal, valid and binding agreement between the parties enforceable in accordance with its terms, except such opinion may take an (j) Except in the case of the initial Series of Bonds and exception for Creditors' Rights Limitations; and Refunding Bonds, a certificate of an Authorized Authority Representative stating that the Authority is not in default in the performance of any of the (n) In the case of a Determination Resolution and a covenants, conditions, agreements or provisions contained in this Supplemental Resolution which delegates to an Authorized Authority Resolution; Representative the power to specify the information set forth in subparagraph (h) above, a certificate of such Authorized Authority (k) Prior to the authentication and delivery of the Bonds of each Representative dated the date of delivery of the Bonds upon original Series, provision shall have been made for the guarantee by the County of issuance which specifies and sets forth such information (the "Series the timely payment of the principal of and interest on such Bonds as set Certificate"). forth in the County Guarantee. The County Guarantee shall be printed on each of the Bond certificates and shall be in substantially the form set forth 2. All of the Bonds of each series of like maturity shall be identical in in Section 1403 hereof and shall be duly executed and attested by the all respects, except as to denominations, numbers and letters. After the original manual or facsimile signature of the Director or the Deputy Director of the issuance of the Bonds of any Series, no Bonds of such Series shall be issued except in
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lieu of or in substitution for other Bonds of such Series pursuant to Article III, Section and the County's Guarantee shall be substantially in the form set forth in Sections 1401, 406 or Section 1206. 1402 and 1403, respectively, hereof.
Section 203. The Series 2014 Bonds. 1. The Series 2014 Bonds 6. The principal or Redemption Price, if applicable, of the Series 2014 shall be issued, authenticated and delivered to finance the undertaking of Improvements Bonds (other than book entry) shall be payable, upon presentation and surrender and/or the acquisition of Items of Equipment for use by the applicable Municipality. thereof, at the principal corporate trust office of TD Bank, National Association, Cherry Hill, New Jersey, as Paying Agent for the Series 2014 Bonds. The principal or 2. Pursuant to the provisions of this Resolution, a Series of Bonds Redemption Price, as applicable, of all Series 2014 Bonds shall also be payable on any entitled to the benefit, protection and security of the provisions hereof is hereby Principal Installment Date at any other place which may be provided for such payment authorized to be issued in an aggregate principal amount not to exceed $18,000,000. by the appointment of any other Paying Agent or Paying Agents as permitted by this Such Bonds shall be designated as and shall be distinguished from the Bonds of all Resolution. Interest on the Series 2014 Bonds shall be payable by check of the other Series by the title, "County-Guaranteed Capital Equipment and Improvement Trustee, mailed or transmitted, on each Interest Payment Date, to the Registered Revenue Bonds, Series 2014". Owners thereof as the same appear as of the Record Date on the books of the Authority maintained by the Trustee; provided, however, that a Registered Owner of $1,000,000 3. The Series 2014 Bonds shall be issued to (i) finance the Costs of or more in principal amount of Series 2014 Bonds shall be entitled, upon five (5) Improvements and/or Items of Equipment for each Municipality, as applicable, (ii) make Business Days' written notice to the Trustee in advance of the applicable Record Date, the required deposit of interest accrued on the Series 2014 Bonds, if any, into the Debt to receive interest payments by wire transfer of immediately available funds. Service Fund, and (iii) pay costs and expenses incurred by the Authority and the County in connection with the issuance and delivery of the Series 2014 Bonds. 7. The Series 2014 Bonds shall be subject to redemption prior to their respective maturity dates as set forth in the Series Certificate, upon the written consent 4. The Series 2014 Bonds shall be dated, and shall bear interest from of the County in accordance with Article IV hereof. their date of delivery except as otherwise provided in Section 301 hereof. The Series 2014 Bonds shall mature on the dates and in the principal amounts, and shall bear 8. The proceeds of the Series 2014 Bonds, including accrued interest, interest payable on the Interest Payment Dates at the respective rates per annum, set shall be paid to the Trustee and applied in accordance with an order of the Authority forth in a certificate of an Authorized Authority Representative executed and delivered to simultaneously with the delivery thereof as follows: the Trustee in accordance with a Determination Resolution to be adopted by the Authority authorizing the execution and delivery of a bond purchase contract for the sale (a) an amount equal to the interest accrued on the Series 2014 of the Series 2014 Bonds (which Determination Resolution shall not constitute a Bonds from their dated date to the date of their delivery to the initial Supplemental Resolution hereunder); provided that (i) the aggregate principal amount of purchasers thereof, if any, shall be deposited in the applicable Municipal the Series 2014 Bonds shall not exceed $18,000,000 (inclusive of original issue Account within the Debt Service Fund; and discount), (ii) each principal maturity date shall be on September 15, (iii) the final maturity date shall not be later than September 15, 2024, (iv) the true interest cost shall (b) an amount for the payment of the costs of issuance, not exceed six percent (6.00%) and (v) the Redemption Price, if any, of any Series 2014 including the Authority's initial financing fee, shall be deposited in the Bond subject to redemption shall not be greater than one hundred three percentum Operating Fund and paid in accordance with Section 505(3) hereof; and (103%) per annum of the principal amount of Series 2014 Bonds or a portion thereof to be redeemed, plus accrued interest to the date of redemption. The amount and due (c) the balance of proceeds of the Series 2014 Bonds shall be date of each Sinking Fund Installment, if any, for the Series 2014 Bonds shall be as set allocated to each Municipality and each such amount shall be deposited in forth in a Series Certificate of an Authorized Authority Representative executed and each Municipal Account in the Acquisition and Improvement Fund, which delivered to the Trustee in accordance with the Determination Resolution to be adopted Fund is created and established pursuant to Section 502 hereof. by the Authority awarding such Series 2014 Bonds to the initial purchasers thereof. Section 204. Book Entry System. With respect to each Series of 5. The Series 2014 Bonds shall be issued in fully registered form in Bonds for which the authorizing resolution so provides, Authorized Denominations. Unless the Authority shall otherwise direct the Bond Registrar, the Series 2014 Bonds shall be lettered and numbered from one upward in (a) except as provided in subparagraph (c) of this paragraph order of maturities preceded by the letter "R" and/or such other letter or letters as and Section 203(5) hereof, the registered Holder of all of the Bonds shall determined by the Trustee prefixed to the number. Subject to the provisions of this be, and the Bonds shall be registered in the name of, Cede & Co. ("Cede") Resolution, the form of the Series 2014 Bonds, the Trustee's certificate of authentication as nominee of DTC. With respect to all Bonds for which Cede shall be the registered Holder, payment of semiannual interest on such Bonds shall be
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made by wire transfer of immediately available funds to the account of Trustee of written notice from DTC to the effect that DTC has received Cede on the Interest Payment Dates for the Bonds at the address written notice from DTC participants or indirect DTC participants having indicated for Cede in the registration books of the Authority kept by the interests, as shown in the records of DTC, of not less than fifty percent Bond Registrar. (50%) of the aggregate principal amount of the then Outstanding Bonds so registered in the name of Cede to the effect, that (A) DTC is unable to (b) The Bonds shall be initially issued in the form of a separate discharge its responsibilities with respect to such Bonds; or (B) a fully registered bond in the amount of each separate serial or term continuation of the requirement that all such Outstanding Bonds be maturity of the Bonds. Upon initial issuance, the ownership of each such registered in the registration books kept by the Trustee in the name of Bond shall be registered in the registration books of the Authority kept by Cede, as nominee of DTC, is not in the best interest of the beneficial the Bond Registrar in the name of Cede, as nominee of DTC. The owners of such Bonds. Authority and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede or any DTC (3) Upon the termination of the services of DTC with participant or indirect DTC participant with respect to any beneficial respect to all or any portion of such Bonds pursuant to Section 204(c)(2)(i) ownership interest in the Bonds, (ii) the delivery to any DTC participant, or 204(c)(2)(ii)(A) hereof, or upon the discontinuance or termination of the indirect DTC participant, beneficial owner or any other person, other than services of DTC with respect to all or any portion of such Bonds pursuant DTC or Cede, of any notice with respect to such Bonds, or (iii) the to Section 204(c)(1) or Section 204(c)(2)(ii)(B) hereof, after which no payment to any DTC participant, indirect DTC participant, beneficial owner substitute securities depository willing to undertake the functions of DTC or any other person, other than DTC or Cede, of any amount with respect hereunder can be found which, in the opinion of the Authority, is willing to the principal of, redemption premium, if any, or interest on such Bonds. and able to undertake such functions upon reasonable and customary The Authority and the Trustee may treat as, and deem DTC to be, the terms, such Bonds (or the applicable portion thereof) shall no longer be absolute registered Holder of each such Bond for the purpose of restricted to being registered in the registration books kept by the Trustee (i) payment of the principal of, redemption premium, if any, and interest on in the name of Cede, as nominee of DTC, but may be registered in each such Bond, (ii) giving notices with respect to such Bonds, whatever name or names Bondholders transferring or exchanging such (iii) registering transfers with respect to the Bonds and (iv) for all other Bonds shall designate, in accordance with the provisions of this purposes whatsoever. The Trustee shall pay the principal of, redemption Resolution. Upon the determination by any party authorized herein that premium, if any, and interest on such Bonds only to or upon the order of such Bonds (or any portion thereof) shall no longer be limited to book- DTC, and all such payments shall be valid and effective to fully satisfy and entry form, the Authority shall immediately advise the Trustee in writing of discharge the Authority's obligations with respect to such principal, the procedures for transfer of such Bonds from such book-entry form to a redemption premium, if any, and interest to the extent of the sum or sums fully registered form. so paid. No person other than DTC shall receive a Bond certificate evidencing the obligation of the Authority to make payments of principal (d) Notwithstanding any other provision of this Resolution to the thereof, redemption premium, if any, and interest thereon pursuant to this contrary, so long as any Series of Bonds is registered in the name of Resolution. Upon delivery by DTC to the Trustee of written notice to the Cede, as nominee of DTC, all payments with respect to the principal of, effect that DTC has determined to substitute a new nominee in place of redemption premium, if any, and interest on, and all notices with respect Cede, and subject to the transfer provisions hereof, the word "Cede" in to, such Bonds shall be made and given, respectively, to DTC as provided this Resolution shall refer to such new nominee of DTC. in the Letter of Representations of the Authority and the Trustee, addressed to DTC, with respect to such Bonds. (c) (1) DTC may determine to discontinue providing its services with respect to any Series of Bonds at any time by giving written (e) In connection with any notice or other communication to be notice to the Authority and discharging its responsibilities with respect provided to Bondholders pursuant to this Resolution by the Authority or thereto under applicable law. Upon receipt of such notice, the Authority the Trustee with respect to any consent or other action to be taken by shall promptly deliver a copy of same to the Trustee. Bondholders, the Authority or the Trustee, as the case may be, shall establish a record date for such consent or other action and give DTC (2) The Authority, (i) in its sole discretion and without the notice of such record date not less than fifteen (15) calendar days in consent of any other person, may terminate the services of DTC with advance of such record date to the extent possible. respect to any Series of Bonds, and (ii) shall terminate the services of DTC with respect to such Bonds upon receipt by the Authority and the
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Section 205. Refunding Bonds. 1. One or more Series of Authority Representative and an Authorized Municipal Representative and Refunding Bonds may be authenticated and delivered upon original issuance to refund acknowledged and accepted by the County as being in full force and effect all or any portion (as determined by the Authority) of any Outstanding Bonds or one or or an opinion of County Counsel to the effect that amendment to the more maturities within such Series of Bonds upon (i) the written consent of the County Lease and/or Loan Agreement with each Municipality is not necessary, and (ii) compliance with the terms and conditions set forth in subsection 2 of this which amendments shall evidence that all Lease Payments and/or Loan Section 205 and in Section 202 hereof. Payments derived from each Municipality under each Lease and/or Loan Agreement and the amendments thereto shall be sufficient to pay Debt 2. Prior to or simultaneously with the delivery of each such Series of Service on all Outstanding Bonds. Refunding Bonds pursuant to subsection 1 of this Section 205, the Trustee shall receive, in addition to the items required by Section 202 hereof: 3. The proceeds, including accrued interest, of the Refunding Bonds of such Series shall be applied simultaneously with the delivery of such Refunding A. A certified copy of the ordinance authorizing the County Bonds, as provided in the Supplemental Resolution authorizing such Refunding Bonds. Guarantee for such Series of Refunding Bonds along with duly certified copies of the authorization proceedings related thereto and a fully 4. Upon the defeasance of the Bonds being refunded, the refunded executed copy of a Guarantee Agreement of the County consenting to the Bonds shall no longer be entitled to the benefit of the County Guarantee for the issuance of such Series of Refunding Bonds and confirming and setting refunded Bonds and such County Guarantee shall be released and extinguished forth the terms and conditions under which such Bonds will be entitled to thereon. the benefits of a County Guarantee for such Series of Refunding Bonds;
B. Irrevocable written instructions to the Trustee, satisfactory to it, to give due notice of redemption of all or any portion of the Bonds, if any, to be redeemed on a redemption date specified in such instructions;
C. If the Bonds to be refunded are not by their terms subject to redemption within the next succeeding sixty (60) days, irrevocable written instructions to the Trustee, satisfactory to it, to make due provision for publication of the notice provided for in Section 405 to the Holders of the Bonds being refunded, except in the case where any Series of Bonds is not by its terms subject to redemption; and
D. Either (i) moneys in an amount sufficient to effect payment at the applicable Redemption Price of those Bonds, if any, to be redeemed or the principal amount of those Bonds, if any, to be paid at maturity, together with accrued interest on such Bonds to the redemption or maturity date, which moneys shall be held by the Trustee or any one or more of the Paying Agents in a separate account irrevocable in trust for and assigned to the respective Holders of the Bonds to be refunded, or (ii) Investment Securities in such principal amounts, of such maturities, bearing such interest, and otherwise having such terms and qualifications, as shall be necessary to comply with the provisions of subsection 2 of Section 1301, and any moneys required pursuant to said subsection 2, which Investment Securities and moneys shall be held in trust and used only as provided in said subsection 2 and including a verification report to the same effect;
E. Executed copies of amendments to the Lease and/or the Loan Agreement with each Municipality certified to by an Authorized
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ARTICLE III comply with the custom or rules of any securities exchange or commission or brokerage board or otherwise as may be determined by the Authority prior to the authentication GENERAL TERMS AND PROVISIONS OF BONDS and the delivery thereof.
Section 301. Obligation of Bonds; Medium of Payment; Form and Section 303. Execution of Bonds. The Bonds shall be executed in Date; Letters and Numbers. 1. The Bonds shall be direct and special obligations of the name of the Authority by the manual or facsimile signature of its Chairman or Vice the Authority payable, with respect to principal or Redemption Price and interest, solely Chairman and its corporate seal shall be thereunto affixed, imprinted or otherwise from Revenues and secured by the Pledged Property, which under the Act and this reproduced and attested by the manual or facsimile signature of the Secretary or Resolution may be used for the payment of principal or Redemption Price of and Assistant Secretary of the Authority. In the event any officer who shall have signed, interest on the Bonds of the Authority. The Series 2014 Bonds are additionally secured sealed or attested any of the Bonds shall cease to be such officer of the Authority by the County Guarantee for such Series 2014 Bonds. before the Bonds so signed, sealed or attested shall have been authenticated and delivered by the Trustee or by the Bond Registrar, such Bonds nevertheless may be 2. The Bonds shall be payable with respect to principal and interest in authenticated and delivered as herein provided as if the person who so signed, sealed any coin or currency of the United States of America that at the time of payment is legal or attested such Bonds had not ceased to be such officer. Any Bond of a Series may tender for the payment of public and private debts. be signed, sealed or attested on behalf of the Authority by any person who shall hold the proper office at the date of such act, notwithstanding at the date of such Bonds such 3. All Bonds of each Series shall be issued in the form of fully person may not have held such office. registered Bonds. The Bonds of each Series shall be substantially in the form required by Article XIV hereof or substantially in the form set forth in the Supplemental Section 304. Authentication of Bonds. The Bonds of each Series Resolution authorizing such Series. shall bear thereon a certificate of authentication, substantially in the form set forth in Section 1402 hereof, duly executed upon issuance by the Trustee or the Bond 4. Each Bond shall be lettered and numbered as provided in this Registrar. Only such Bonds as shall bear thereon such certificate of authentication, Resolution or the Supplemental Resolution authorizing the Series of which such Bond is duly executed, shall be entitled to any right or benefit under this Resolution. No Bond a part so as to be distinguished from every other Bond. shall be valid or obligatory for any purpose unless such certificate of authentication upon such Bond shall have been duly executed by the Trustee, or by the Bond 5. Bonds upon original issuance shall be dated as provided in this Registrar, as the case may be. Such certificate of authentication by the Trustee or by Resolution. Refunding Bonds shall be dated as provided in a Supplemental Resolution. the Bond Registrar, as the case may be, upon any Bond executed on behalf of the Principal of the Bonds shall be payable at maturity upon presentation and surrender Authority shall be conclusive and the only evidence that the Bond so authenticated has thereof at the office of the Paying Agent. Bonds shall bear interest as provided herein, been duly authenticated and delivered under this Resolution and that the Holder thereof payable by check, except as provided in Section 204 hereof, to the registered owners of is entitled to the benefit of this Resolution. such Bonds as of the Record Date provided for such Bonds at their addresses on file with the Trustee who has been designated the Bond Registrar hereunder. After original Section 305. Transfer, Exchange and Registry of Bonds and issue, all Bonds exchanged or transferred shall bear an authentication date that shall be Agency Therefor. 1. The Authority shall cause and hereby appoints the Bond the date authenticated. Interest on Bonds shall accrue from the Interest Payment Date Registrar as its agent to maintain and to keep books for the registration, the exchange to which interest has been paid next preceding the authentication date unless (1) the and the transfer of Bonds. Upon presentation of Bonds for transfer or exchange at the date of authentication is also an Interest Payment Date to which interest has been paid, designated office of the Bond Registrar, together with a written instrument of transfer in which event such Bonds shall be dated and shall bear interest from the date of satisfactory to the Bond Registrar duly executed by the Holder or by his attorney duly authentication, or (2) the date of authentication is prior to the first Interest Payment authorized in writing, the Bond Registrar shall register or shall cause to be registered Date, in which event such Bonds shall bear interest from the original dated date of such and shall permit to be transferred thereon or to be exchanged any Bond entitled to Bonds; provided however that if, as shown on the records of the Trustee, interest on the registration, transfer or exchange. Upon the transfer or exchange of any Bond, the Bonds of any Series shall be in default, Bonds of such Series issued in lieu of Bonds Authority shall execute, and the Trustee or the Bond Registrar shall authenticate and surrendered for transfer or exchange may be dated as of the date to which interest has shall deliver a new Bond or Bonds in any Authorized Denomination registered in the been paid in full on the Bonds surrendered. name of the Holder or transferee of the same aggregate principal amount, designation and maturity as the surrendered Bond. Section 302. Legends. The Bonds of each Series may contain or may have endorsed thereon such provisions, specifications and descriptive words not 2. The Authority and each Fiduciary may deem and treat the person in inconsistent with the provisions of this Resolution as may be necessary or desirable to whose name any Bond shall be registered upon the books of the Authority as the
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absolute owner of such Bond, whether such Bond shall be overdue or not, for the Section 307. Temporary Bonds. Until the definitive Bonds are purpose of receiving payment of, or on account of, the principal and Redemption Price prepared, the Authority may execute in the same manner as is provided in Section 303 of and interest on such Bond and all such payments so made to any such Registered hereof and, upon the request of the Authority, the Trustee or Bond Registrar shall Owner or upon his order shall be valid and effectual to satisfy and discharge the liability authenticate and shall deliver in lieu of definitive Bonds but subject to the same upon such Bond to the extent of the sum or sums so paid and neither the Authority nor provisions, limitations and conditions as the definitive Bonds except as to the any Fiduciary shall be affected by any notice to the contrary. The Authority agrees to denominations thereof and as to exchangeability for registered Bonds, one or more indemnify and save each Fiduciary harmless from and against any and all loss, cost, temporary Bonds of the tenor of the definitive Bonds in lieu of which such temporary charge, expense, judgment or liability incurred by it, acting in good faith and without Bond or Bonds are issued, in Authorized Denominations and with such omissions, gross negligence or willful misconduct under this Resolution, in so treating such insertions and variations as may be appropriate to temporary Bonds for notation thereon Registered Owner. of the payment of such interest. The Authority at its own expense shall prepare and shall execute and, upon the surrender for exchange and for cancellation of such 3. All Bonds surrendered in any such exchanges or transfers shall temporary Bonds, the Trustee or the Bond Registrar shall authenticate and shall deliver forthwith be delivered to the Bond Registrar and canceled or retained by the Bond in exchange therefor definitive Bonds of the Authority without charge to the Holder Registrar. For every such exchange or transfer of Bonds, whether temporary or thereof. The cost and expense of issuing temporary Bonds shall be paid by the definitive, the Authority or the Bond Registrar may make a charge sufficient to Municipality as Additional Rent under the Lease or Additional Loan Payments under the reimburse it for any tax, fee or other governmental charge required to be paid with Loan Agreement, which payment shall be allocated to each Municipality on a pro rata respect to such exchange or transfer. Neither the Authority nor the Bond Registrar shall basis in accordance with the percentages contained in Exhibit A attached to the Lease be required (a) to exchange or transfer the Bonds of any Series for a period beginning and/or Loan Agreement. on the Record Date next preceding an Interest Payment Date for Bonds of a particular Series and ending on such Interest Payment Date, or for a period of fifteen (15) days Section 308. Payment of Interest on Bonds; Interest Rights next preceding the date (as determined by the Trustee) of any selection of Bonds to be Preserved. 1. Interest on any Bond which is payable, and is punctually paid or duly redeemed and thereafter until after the mailing of the notice of redemption, or (b) to provided for, on any Interest Payment Date shall be paid to the person in whose name transfer or exchange any Bonds called for redemption. that Bond is registered at the close of business on the date (hereinafter the "Record Date"), which is the first (1st) day of Month (whether or not a Business Day) next Section 306. Reissuance of Mutilated, Destroyed, Stolen or Lost preceding such Interest Payment Date or such other date as shall be provided in a Bonds. In case any Outstanding Bond shall be mutilated, destroyed, stolen or lost, the Supplemental Resolution authorizing any Series of Bonds. Authority shall execute and the Trustee or the Bond Registrar, as the case may be, shall authenticate and shall deliver a new Bond, of like tenor, number and amount as the 2. Any interest on any Bond which is payable, but is not punctually Bond so mutilated, destroyed, stolen or lost in exchange and in substitution for and paid or duly provided for, on any Interest Payment Date (hereinafter "Default Interest") upon surrender of such mutilated Bond or in lieu of and in substitution for the Bond if shall forthwith cease to be payable to the registered owner on the relevant Record Date any, destroyed, stolen or lost upon filing with the Trustee and the Bond Registrar by virtue of having been such owner; and such Default Interest shall be paid by the evidence satisfactory to the Authority, the Trustee and the Bond Registrar that such Authority to the persons in whose names the Bonds are registered at the close of Bond had been destroyed, stolen or lost and proof of ownership thereof, upon furnishing business on a date (hereinafter the "Special Record Date") for the payment of such the Authority, the Trustee and the Bond Registrar with indemnity satisfactory to them, Default Interest, which shall be fixed in the following manner. The Authority shall notify upon paying such expenses as the Authority, the Trustee and the Bond Registrar may the Trustee in writing of the amount of Default Interest proposed to be paid on each incur in connection therewith and upon complying with such other reasonable Bond and the date of the proposed payment (the "Default Interest Payment Date"), and regulations as the Authority, the Trustee and the Bond Registrar may prescribe. In lieu at the same time the Authority shall deposit with the Trustee an amount of money equal of reissuing a mutilated, destroyed, lost or stolen Bond that is due and payable, the to the aggregate amount proposed to be paid in respect of such Default Interest or shall Trustee and the Bond Registrar may pay the amount due on such Bond to the owner or make arrangements satisfactory to the Trustee for such deposit prior to the date of the the Holder thereof, provided all the other requirements of this Section have been met. proposed payment, such money when deposited to be held in trust for the benefit of the Any Bond surrendered for transfer shall be canceled by the Trustee. Any such new persons entitled to such Default Interest herein provided. Thereupon the Trustee shall Bonds issued pursuant to this Section in substitution for Bonds alleged to be destroyed, fix a Special Record Date for the payment of such Default Interest, which Special stolen or lost shall constitute original additional contractual obligations on the part of the Record Date shall be not more than fifteen (15) nor less than ten (10) days prior to the Authority, whether or not the Bonds so alleged to be destroyed, stolen or lost be at any Default Interest Payment Date, and which Special Record Date shall be fixed by the time enforceable by anyone, and shall be equally secured by and entitled to equal and Trustee within ten (10) days after the receipt by the Trustee of the written notice of the proportionate benefits with all other Bonds issued under this Resolution, in any moneys proposed payment from the Authority. The Trustee shall promptly notify the Authority of or securities held by the Authority or any Fiduciary for the benefit of the Bondholders. such Special Record Date and Default Interest Payment Date and, in the name and at
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the expense of the Authority, shall cause notice of the proposed payment of such ARTICLE IV Default Interest and the Special Record Date and Default Interest Payment Date therefor to be mailed, first class postage prepaid, to each Bondholder at his address as REDEMPTION OF BONDS it appears in the Bond register, not less than ten (10) days prior to such Special Record Date. Section 401. Privilege of Redemption and Redemption Price. Bonds subject to redemption prior to maturity pursuant to this Resolution or a Subject to the foregoing provisions of this Section, each Bond delivered Supplemental Resolution shall be redeemable, upon notice as provided in this Article under this Resolution upon transfer of or in exchange for or in lieu of any other Bond IV, at such times, at such Redemption Prices and upon such terms, in addition to the shall carry the rights to interest accrued and unpaid, and to accrue, which were carried terms contained in this Article IV, as may be specified in the Series Certificate or a by such other Bond. Supplemental Resolution authorizing a Series of Bonds. The written consent of the County shall be received by the Authority prior to the redemption of any Bonds or Series Section 309. Cancellation and Destruction of Bonds. All Bonds of Bonds, except for the redemption of Bonds pursuant to mandatory sinking fund paid, either at or before maturity, shall be delivered to the Trustee when such payment redemption. A copy of such written consent of the County shall be received by the is made, and such Bonds shall thereupon be promptly canceled. Bonds so canceled Trustee prior to the mailing of the notice of redemption in accordance with Section 405 may at any time be destroyed by the Trustee, who shall execute a certificate of hereof. Except as may be otherwise provided in a Supplemental Resolution authorizing destruction in duplicate by the signature of one of its authorized officers describing the a Series of Bonds, any Series of Bonds may be redeemed in whole or in part on any Bonds so destroyed, and one executed certificate shall be filed with the Authority and date at the option of the Authority in accordance with this Resolution or a Supplemental the other executed certificate shall be retained by the Trustee. Resolution.
Section 402. Redemption at the Election or Direction of the Authority. In the case of any redemption of Bonds at the election or direction of the Authority, upon the consent of the County, the Authority shall give written notice to the Trustee of its election or direction to so redeem, which notice shall include a copy of the written consent of the County, if required, in accordance herewith, of the redemption date, of the Series, and of the principal amounts of the Bonds of each maturity of such Series to be redeemed (which Series, maturities and principal amounts thereof to be redeemed shall be determined by the Authority upon the consent of the County, subject to any limitations with respect thereto contained in this Resolution). Such notice shall be given at least sixty (60) days prior to the redemption date or such shorter period as shall be acceptable to the Trustee. In the event notice of redemption shall have been given as in Section 405 provided, there shall be paid on or prior to the redemption date to the appropriate Paying Agent an amount in cash or Investment Securities which, in addition to other moneys, if any, available therefor held by such Paying Agent, will be sufficient to redeem on the redemption date at the Redemption Price thereof, plus interest accrued thereon and unpaid to the redemption date, all of the Bonds to be redeemed. The Authority shall promptly notify the Trustee in writing of all such payments by it to such Paying Agents.
Section 403. Redemption Otherwise Than at the Authority's Election or Direction. Whenever by the terms of this Resolution the Trustee is required or authorized to redeem Bonds otherwise than at the election or direction of the Authority, provided that if such redemption is required to be consented to in writing by the County, such written consent has been delivered to the Trustee, the Trustee shall (i) select the Bonds or portions of Bonds to be redeemed, (ii) give the notice of redemption and (iii) pay out of moneys available therefor the Redemption Price thereof, plus interest accrued thereon and unpaid to the redemption date, to the appropriate Paying Agents in accordance with the terms of this Article IV.
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Section 404. Selection of Bonds to be Redeemed. Unless thereon and unpaid to the redemption date. If there shall be called for redemption less otherwise provided in this Resolution, if less than all of the Bonds of like maturity of any than all of a Bond, the Authority shall execute and the Trustee shall authenticate and Series shall be called for prior redemption, the particular Bonds or portions of Bonds to the Paying Agent shall deliver, upon the surrender of such Bond, without charge to the be redeemed shall be selected at random by the Trustee in such manner as the Trustee owner thereof, for the unredeemed balance of the principal amount of the Bonds so in its sole discretion may deem fair and appropriate; provided, however, that the portion surrendered, Bonds of like Series and maturity in any of the Authorized Denominations. of any Bond of a denomination of more than $5,000 to be redeemed shall be in the If, on the redemption date, moneys for the redemption of all the Bonds or portions principal amount of $5,000 or a multiple thereof, and that, in selecting portions of such thereof of any like Series and maturity to be redeemed, together with interest thereon to Bonds for redemption, the Trustee shall treat each such Bond as representing that the redemption date, shall be held by the Paying Agent so as to be available therefor on number of Bonds of $5,000 denomination which is obtained by dividing by $5,000 the said date and if notice of redemption shall have been given as aforesaid, then, from and principal amount of such Bond to be redeemed in part. after the redemption date interest on the Bonds or portions thereof of such Series and maturity so called for redemption shall cease to accrue and become payable. If said Section 405. Notice of Redemption. When the Trustee shall receive moneys shall not be so available on the redemption date, such Bonds or portions written notice from the Authority of its election or direction to redeem Bonds pursuant to thereof shall continue to bear interest until paid at the same rate as they would have Section 402 hereof, including written notice from the County of its consent to the borne had they not been called for redemption. redemption of the Bonds, and when redemption of Bonds is authorized or required pursuant to Section 403 hereof and the Trustee shall have received written notice from the County of its consent to the redemption of the Bonds, the Trustee shall give notice, in the name of the Authority, of the redemption of such Bonds, which notice shall specify the Series and maturities of the Bonds to be redeemed, the Redemption Price, the redemption date and the place or places where amounts due upon such redemption will be payable and, if less than all of the Bonds of any like Series and maturity are to be redeemed, the letters and numbers or other distinguishing marks of such Bonds so to be redeemed, and, in the case of Bonds to be redeemed in part only, such notice shall also specify the respective portions of the principal amount thereof to be redeemed. Such notice shall further state that on such date there shall become due and payable upon each Bond to be redeemed the Redemption Price thereof, or the Redemption Price of the specified portions of the principal thereof in the case of Bonds to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such date interest thereon shall cease to accrue and be payable. Such notice shall be mailed by the Trustee, via first class mail, postage prepaid, not less than thirty (30) days nor more than sixty (60) days prior to the redemption date, to registered owners of any Bonds or portions of Bonds which are to be redeemed, at their last addresses appearing upon the registry books. Failure to give notice by mail, or any defect in the notice to the registered owner of any Bonds which are to be redeemed shall not affect the validity of the proceedings for the redemption of any other Bonds.
Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice.
Section 406. Payment of Redeemed Bonds. Notice having been given in the manner provided in Section 405, the Bonds or portions thereof so called for redemption shall become due and payable on the redemption date so designated at the Redemption Price, plus interest accrued thereon and unpaid to the redemption date, and, upon presentation and surrender thereof at the office specified in such notice, such Bonds, or portions thereof, shall be paid at the Redemption Price, plus interest accrued
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ARTICLE V additionally covenants that all moneys paid by the County pursuant to the County Guarantee and Guarantee Agreement will be paid directly to the Trustee for deposit in ESTABLISHMENT OF FUNDS AND APPLICATION THEREOF accordance with Section 506 hereof.
Section 501. The Pledge Effected by this Resolution and Security 5. Nothing contained in this Section 501 shall be deemed a limitation for the Bonds. 1. The Bonds are direct and special obligations of the Authority upon the authority of the Authority to issue bonds, notes or other obligations under the payable solely from Revenues and secured by the Pledged Property. There is hereby Act secured by income and funds other than the Pledged Property, including, without pledged and assigned as security for the payment of the principal of, redemption limitation, bonds, notes or other obligations secured by Federal or State grants. premium, if any, and interest on the Bonds in accordance with their terms and the provisions of this Resolution, subject only to the provisions of this Resolution permitting Section 502. Establishment of Funds. The following Funds are the application thereof for the purposes and on the terms and conditions set forth in this hereby created and established: Resolution, all of the Pledged Property. The Series 2014 Bonds are additionally secured by the County Guarantee for such Series 2014 Bonds which unconditionally (1) Acquisition and Improvement Fund, including each of the and irrevocably guarantees the payment of principal of and interest on the Series 2014 Municipal Accounts to be established therein, to be held by the Trustee, Bonds. (2) Revenue Fund, to be held by the Trustee, 2. All Pledged Property shall immediately be subject to the lien of the pledge made herein for the benefit of the Bondholders without any physical delivery (3) Operating Fund, to be held by the Trustee, thereof or further act, or any filing, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the (4) Proceeds Fund, including each of the Municipal Accounts to Authority, irrespective of whether such parties have notice thereof. be established therein, to be held by the Trustee,
3. The Bonds shall not be in any way a debt or liability of the State or (5) Debt Service Fund, including each of the Municipal Accounts of any political subdivision thereof other than the Authority and, as applicable under and to be established therein, to be held by the Trustee, and limited by the County Guarantee and the Guarantee Agreement, the County, and shall not create or constitute any indebtedness, liability or obligation of the State or of any (6) Rebate Fund, to be held by the Trustee on behalf of the political subdivision thereof other than the Authority and, as applicable under and limited Authority. by the County Guarantee and the Guarantee Agreement, the County, or be or constitute a pledge of the faith and credit of the State or of any political subdivision thereof other The Trustee may designate on each Fund or Account established than, as applicable under and limited by the County Guarantee and the Guarantee hereunder such number, letter or symbol as may be necessary to distinguish such Agreement, the County. Neither the State nor any political subdivision thereof other Funds or Accounts from other funds and accounts of the Authority held by the Trustee. than the Authority and, as applicable under and limited by the County Guarantee and the Guarantee Agreement, the County, is obligated to pay the principal or Redemption Section 503. Acquisition and Improvement Fund. 1. There shall Price of and interest on the Bonds and neither the full faith and credit nor the taxing be paid into the Municipal Account for each Municipality established in the Acquisition power of the State or any political subdivision thereof other than, as applicable under and Improvement Fund (a) the amounts required to be so paid by the provisions of this and limited by the County Guarantee and the Guarantee Agreement, the County, is Resolution, including any proceeds from the issuance of the Bonds allocated to such pledged to the payment of the principal or Redemption Price of and interest on the Municipality in accordance with Section 203(8) hereof, (b) any Proceeds received with Bonds but all Bonds shall be payable solely from Revenues or funds pledged or respect to any Improvement or Item of Equipment upon the election by the Municipality available for their payment, including any funds available under the County Guarantee to pursue Option A pursuant to Section 5.4(a) of the Lease, and (c) there may be paid and the Guarantee Agreement, as authorized in the Act. The County Guarantee does into each Municipal Account in the Acquisition and Improvement Fund, at the option of not provide for the payment of redemption premium on the Bonds, if any. the Authority, any moneys received for or in connection with the Improvement or Equipment of each such Municipality by the Authority from any other source, unless 4. Notwithstanding the above, the Authority hereby assigns its right to required to be otherwise applied in accordance with this Resolution. All amounts in receive all Revenues, including all amounts to be received by the Authority from each each Municipal Account in the Acquisition and Improvement Fund shall be applied in the Municipality under each Lease and/or Loan Agreement, to the Trustee for the benefit of following order and priority: (a) to the Cost of Improvement or the Equipment, the Bondholders and covenants and directs the Municipality under each Lease and/or (b) transferred to the Operating Fund to pay Authority Administrative Expenses pursuant Loan Agreement to pay all such amounts directly to the Trustee. The Authority to Section 503(5) of this Resolution, and (c) to the extent not otherwise utilized, moneys
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in the Municipal Account in the Acquisition and Improvement Fund shall be transferred withheld), certifying in respect of each payment to be made (1) the requisition number, to the Municipal Account in the Debt Service Fund or Proceeds Fund and applied by the (2) the name and address of the person, firm or corporation to whom payment is due or Trustee in accordance with paragraphs (7) and (8) of this Section. The Trustee shall has been made, (3) the amount to be paid, (4) the Improvement(s) or Item(s) of provide each Municipality on a quarterly basis with a statement as to the amount of Equipment to which the requisition relates, (5) the amount originally specified in Exhibit money remaining in its Municipal Account in the Acquisition and Improvement Fund. A or Exhibit G to the Lease or Exhibit A to the Loan Agreement, as applicable, as the Cost of the Equipment, (6) the amount of money the Municipality has forwarded to the 2. (a) The Trustee is hereby authorized to make payments from Trustee on behalf of the Authority for deposit in the Municipal Account in the Acquisition each Municipal Account in the Acquisition and Improvement Fund for the Cost of any and Improvement Fund to fund the balance of the Cost of the Equipment, (7) the check Improvement or Item of Equipment in the amounts, at the times, in the manner, and on and a copy thereof evidencing such payment referred to in number six (6) above, and the other terms and conditions set forth in this paragraph. Before any such payment (8) that each obligation, item of cost or expense mentioned therein has been properly shall be made, there shall be filed with the Authority and/or the Trustee: (A) a incurred, is an item of Cost and is a proper charge against the Municipal Account in the requisition therefor, which requisition shall be substantially in the form set forth in Exhibit Acquisition and Improvement Fund and has not been the basis of any previous E to the Lease or, in the case of advance, progress or partial payments, Exhibit C to the withdrawal; (B) a bank or certified check drawn on a Municipal account in the amount Lease, signed by an Authorized Municipal Representative and approved by an necessary to fund the balance of such Cost; and (C) either (1) an Acceptance Authorized Authority Representative (which approval shall not be unreasonably Certificate described in paragraph 3 hereof in the case of payment in full of the Cost of withheld), certifying in respect of each payment to be made (1) the requisition number, any Improvement or Item of Equipment against delivery thereof or (2) in the case of an (2) the name and address of the Municipality, person, firm or corporation to whom advance, progress or partial payment made pursuant to Section 2.5(h) of the Lease or payment is due or has been made, (3) the amount to be paid, (4) the Improvement(s) or pursuant to the terms of the Loan Agreement, a performance bond satisfying the Item(s) of Equipment to which the requisition relates, and (5) that each obligation, item requirements of Section 5.8 of the Lease or Section 5.6 of the Loan Agreement. Any of cost or expense mentioned therein has been properly incurred, is an item of Cost and such moneys deposited by the Municipality pursuant to the provisions hereof shall not is a proper charge against such Municipal Account in the Acquisition and Improvement constitute Revenues or Pledged Property pledged for the security of the repayment of Fund and has not been the basis of any previous withdrawal; and (B) either (1) an the Bonds. The Trustee shall issue its check for each payment required by such Acceptance Certificate described in paragraph 3 hereof in the case of payment in full of requisition or shall by interbank transfer or other method, arrange to make the payment the Cost of any Improvement or Item of Equipment against delivery thereof or, (2) in the required by such requisition. case of an advance, progress or partial payment pursuant to Section 2.5(h) of the Lease or pursuant to the terms of the Loan Agreement, a performance bond satisfying the 3. The completion of the acquisition and installation of all Items of requirements of Section 5.8 of the Lease or Section 5.6 of the Loan Agreement, or (C) a Equipment of each Municipality executing a Lease with the Authority shall be evidenced loan proceed forwarding order signed by an Authorized Municipal Representative by Acceptance Certificate(s) for each Item of Equipment of an Authorized Municipal pursuant Section 2.2(c) of the Loan Agreement whereby the Loan proceeds shall be Representative, approved by an Authorized Authority Representative (which approval forwarded by the Trustee, on behalf of the Authority, to the Municipality on the date of shall not be unreasonably withheld), which shall be filed with the Trustee and the the original issuance of the Bonds. The Trustee shall issue its check for each payment Authority, certifying (i) that the acquisition and installation of all Items of Equipment has required by such requisition or shall by interbank transfer or other method, arrange to been completed substantially in accordance with the specifications applicable thereto make the payment required by such requisition. The Trustee shall have no obligations and that such Equipment is ready for use, (ii) the date of such completion and (iii) the hereunder and shall be entitled to rely on the requisition if properly completed and purchase price of such Improvement or Item of Equipment. Notwithstanding the executed. foregoing, such Acceptance Certificate shall state that it is given without prejudice to any rights against third parties which exist as of the date of such certificate or which (b) In the event the Cost of an Improvement or Item of may subsequently come into being. Equipment purchased by a Municipality exceeds the amount therefor specified in Exhibit A or Exhibit G, as applicable, to the Lease or Exhibit A to the Loan Agreement, the 4. Subject to the provisions of subsection (5) below, if subsequent to Trustee shall make payments from the applicable Municipal Account in the Acquisition the filing of such Acceptance Certificate, it shall be determined by an Authorized and Improvement Fund for the Cost of Equipment in the amounts, at the times, in the Municipal Representative, as approved by an Authorized Authority Representative that manner, and on the other terms and conditions set forth in this subparagraph. Before the amount of Bond proceeds specified in such certificate as being required for the any such payment shall be made, there shall be filed with the Trustee and the Authority: payment of any remaining part of the Cost are no longer so required, such fact shall be (A) a requisition therefor, which requisition shall be substantially in the form set forth in evidenced by a certificate or certificates of an Authorized Municipal Representative and Exhibit H to the Lease or, in the case of advance, progress or partial payments, Exhibit an Authorized Authority Representative, which Certificate shall be filed with the C to the Lease, signed by an Authorized Municipal Representative and approved by an Authority and the Trustee certifying such fact and certifying that any amount shown Authorized Authority Representative (which approval shall not be unreasonably therein is no longer required to purchase such Item of Equipment, such amount shall be
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transferred by the Trustee in accordance with the directions of the Municipality and Municipal Account in the Proceeds Fund and shall be paid over to the Municipal Authority to the Debt Service Fund for deposit in such Municipal Account for application Account in the Debt Service Fund on each Lease Payment Date and/or Loan Payment in accordance with the requirements of paragraphs 7 and 8 of this Section. Date and applied to the payment of Debt Service attributable to such Municipality until all such amounts are exhausted; provided that any such amounts shall be invested 5. At any time after the filing of such Acceptance Certificate, upon the subject to such Yield restrictions as shall be directed to the Trustee in writing by Bond delivery to the Trustee of written instructions of an Authorized Authority Representative, Counsel. Notwithstanding the above, excess Bond proceeds which are transferred from the Trustee shall transfer to the Operating Fund from a Municipal Account in the a Municipal Account in the Acquisition and Improvement Fund to the Municipal Account Acquisition and Improvement Fund, money in an amount equal to the Municipality's pro in the Proceeds Fund may be transferred to the Rebate Fund pursuant to the provisions rata share of Authority Administrative Expenses as shall be determined by the Authority of Section 509(a) hereof. and evidenced in a certificate of an Authorized Authority Representative to be necessary or desirable to fund Authority Administrative Expenses for the Bond Year, Section 504. Revenue Fund. Except as set forth in Sections 505 and such amounts to be applied to the purposes of such Operating Fund. Upon the filing of 603 hereof, all Revenues shall be promptly deposited by the Trustee upon receipt such Acceptance Certificate and the certificate of the Authorized Authority thereof into the Revenue Fund and shall be applied as set forth in Section 506 hereof. Representative, the balance of Bond proceeds in the Municipal Account in the All moneys at any time deposited in the Revenue Fund shall be held in trust for the Acquisition and Improvement Fund in excess of the amount, if any, stated in such benefit of the Holders but shall nevertheless be disbursed, allocated and applied solely certificate and the amount to be transferred to the Operating Fund as set forth in the for the uses and purposes set forth in this Article V. immediately preceding sentence shall be transferred into the Debt Service Fund for deposit in the Municipal Account for application in accordance with the requirements of Section 505. Operating Fund. 1. Pursuant to an order of the paragraphs 7 and 8 of this Section. Authority simultaneously delivered to the Trustee upon the original issuance of the Bonds, any Bond proceeds representing costs of issuance and each Municipality's 6. Any damages or other moneys from any manufacturer or supplier allocable share of the Initial Authority Financing Fee paid in connection with the Capital of any Improvement or Item of Equipment or its surety paid to the Municipality pursuant Equipment and Improvement Program shall be immediately deposited in the Operating to Section 2.6 of the Lease shall be paid to the Trustee for deposit in the applicable Fund. Such amounts shall be paid by the Trustee in accordance with paragraph three Municipal Account in the Acquisition and Improvement Fund (in accordance with written (3) hereof. instructions from the Authority as directed in writing by the Municipality) to the extent such funds are necessary to complete the acquisition of such Item of Equipment. Any 2. Amounts payable to the Authority and to the County which moneys not necessary to complete the acquisition of Equipment, as stated in a constitute Additional Rent pursuant to Section 3.1(b) of the Lease or Additional Loan certificate of an Authorized Municipal Representative delivered to the Trustee, shall be Payments pursuant to Section 3.1(b) of the Loan Agreement, shall first be deposited to transferred by the Trustee to the Municipal Account in the Debt Service Fund or the the Revenue Fund and shall thereafter be immediately deposited in the Operating Fund Proceeds Fund and applied as a credit toward the Municipality's Basic Rent or Basic by the Trustee upon receipt of such moneys by the Trustee from each Municipality. The Loan Payment obligations on the next succeeding Lease Payment Date or Loan Trustee may rely conclusively upon Authority and County requests for Additional Rent Payment Date, in accordance with Sections 503(5) and 507(4) herein. and/or Additional Loan Payments under the Lease and/or Loan Agreement in determining the amount to be credited to the Operating Fund. 7. Bond proceeds transferred from a Municipal Account in the Acquisition and Improvement Fund to a Municipal Account in the Debt Service Fund 3. Amounts deposited in the Operating Fund shall be paid out by the pursuant to this Section shall be applied as a credit toward the Basic Rent obligations Trustee from time to time for costs of issuance, County Guarantee Costs, Authority and/or Basic Loan Payment obligations of such Municipality as set forth in a certificate Administrative Expenses, including expenses incurred by the Authority in the of an Authorized Authority Representative filed with the Trustee. The Lease Payment performance of an arbitrage rebate calculation, and any other items constituting and/or Loan Payment due from each such Municipality on the next succeeding Lease Additional Rent and/or Additional Loan Payments upon requisition therefor submitted to Payment Date or Loan Payment Date shall reflect the extent of the application of such the Trustee and signed by an Authorized Authority Representative or Authorized County amounts. Representative, as applicable, certifying: (i) the name of the person, firm or corporation to whom each such payment is due; (ii) the respective amounts to be paid; (iii) the 8. Pursuant to the written direction of the Authority, Bond proceeds in purpose by general classification for which each obligation in the stated amounts has the Municipal Account in the Acquisition and Improvement Fund which are to be been or will be incurred; and (iv) each obligation in the stated amounts has been or will transferred to the Municipal Account in the Debt Service Fund pursuant to subsection 7 be incurred by or on behalf of the Authority and the County and that each item thereof is above, but which cannot be completely applied to the payment of Debt Service on the a proper charge against the Operating Fund and has not been previously paid. Bonds attributable to such Municipality during such Bond Year shall be deposited in the
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Section 506. Payments into Certain Funds. 1. As soon as 2. To the extent moneys in the Municipal Account in the Debt Service practicable after the deposit of Revenues into the Revenue Fund, but in any case no Fund are sufficient to satisfy the amount of Basic Rent payments and/or Basic Loan later than 3:00 p.m. of the second Business Day after the deposit of any Revenues in Payments due and owing by the Municipality for such Bond Year, any such Proceeds the Revenue Fund, the Trustee shall credit, but only to the extent the amount in the shall remain in the Municipal Account in the Proceeds Fund and shall be transferred Revenue Fund shall be sufficient therefor, such Revenues as follows: (a) Revenues thereafter into the Municipal Account in the Debt Service Fund on each Lease Payment consisting of Basic Rent payments and/or Basic Loan Payments made by each Date and/or Loan Payment Date for the payment of Debt Service on the Bonds Municipality, the amount of such payment being made in accordance with Exhibit A or attributable to such Municipality until such Proceeds are exhausted. The application of Exhibit G attached to the Lease or Exhibit A attached to the Loan Agreement, and shall such Proceeds in accordance herewith shall be credited toward the Basic Rent be applied to each Municipal Account in the Debt Service Fund in accordance with payments and/or Basic Loan Payment due and owing from the Municipality in any Bond Sections 507 and 508 hereof and (b) moneys paid by the County on behalf of a Year. Any such Proceeds in the Municipal Account in the Proceeds Fund shall be Municipality pursuant to the County Guarantee in accordance with Section 508 hereof invested subject to such Yield restrictions as shall be directed to the Trustee in writing shall be applied immediately to the applicable Municipal Account in the Debt Service by Bond Counsel. Fund upon the written direction of the Authority such that the balance in the Debt Service Fund shall equal the Debt Service Requirement on such Series of Bonds for the 3. Pursuant to Sections 4.2, 8.2 and 9.1 of the Lease and at the next respective succeeding Interest Payment Date and Principal Installment Date, as written direction of the Authority, Revenues from the sale of Equipment of a Municipality applicable, provided that, for the purposes of computing the amount to be deposited in (net of expenses incurred by the Authority) shall be deposited in the Municipal Account said Fund, there shall be excluded from the balance in said Debt Service Fund the for such Municipality in the Proceeds Fund and shall be applied by the Trustee in the amount, if any, set aside in said Fund from the proceeds of such Series of Bonds for the following order: first, to the payment of the Municipality's Basic Rent obligation under payment of interest on Bonds less that amount of such proceeds to be applied in the Lease and second, pursuant to Section 709 hereof, to reimburse the County for accordance with this Resolution to the payment of interest accrued and unpaid and to County Guarantee Costs, if any. Such amounts shall be requisitioned by the County in accrue on such Series of Bonds to the next Interest Payment Date as set forth in an accordance with the procedures outlined in Section 505(3) hereof. Amounts remaining order of the Authority to the Trustee; provided, however, that so long as there shall be in the Municipal Account in the Proceeds Fund after application thereof in accordance held in the Debt Service Fund an amount sufficient and available in each Municipal herewith shall be applied by the Trustee as a credit toward any other Additional Rent Account to pay in full all Outstanding Bonds of a particular Series in accordance with payments of the Municipality due and owing under the Lease prior to the final Debt their terms (including principal thereof and interest thereon) no transfers shall be Service payment of the Bonds attributable to such Municipality; such Proceeds shall be required to be made from the Revenue Fund to the Debt Service Fund. invested subject to such Yield restrictions as shall be directed to the Trustee in writing by Bond Counsel. 2. Revenues representing Proceeds shall be immediately credited in accordance with Sections 503(6) and 507 hereof. 4. Revenues paid to the Trustee pursuant to Section 2.6 of the Lease and 503(6) hereof shall be transferred by the Trustee, upon receipt of a Certificate of an Section 507. Proceeds Fund - Municipal Account(s). 1. There Authorized Municipal Representative and an Authorized Authority Representative shall be established a Municipal Account for each Municipality in the Proceeds Fund. stating the amount of money to be so transferred, from the Municipal Account in the Upon an election by the Municipality or, as applicable, the Authority, to pursue Option B Acquisition and Improvement Fund to the Municipal Account in the Proceeds Fund and under Section 5.4(b) of the Lease, there shall be deposited in the Municipal Account in applied as a credit toward the Municipality's Basic Rent obligations pursuant to Section the Proceeds Fund any Proceeds received with respect to an Item of Equipment. 507(1) and (2) hereof. Proceeds from any performance bond provided pursuant to Section 5.8 of the Lease or Section 5.6 of the Loan Agreement shall be deposited in the Municipal Account in the 5. Pursuant to Section 8.1(c) of the Lease, if the Municipality is not Proceeds Fund. Proceeds on deposit in each Municipal Account in the Proceeds Fund able to (a) deliver an Item of Equipment or make arrangements for its substitution in resulting from such deposits shall be applied by the Trustee as a credit toward the accordance with the provisions of Section 8.1(b) of the Lease and (b) requisition amount of Basic Rent and/or Basic Loan Payments owed by the Municipality on each moneys from the Acquisition and Improvement Fund within eighteen (18) months after Lease Payment Date and/or Loan Payment Date for the payment of Debt Service on the the date of original issuance of the Bonds in accordance with the time periods and Bonds allocated to such Municipality by the transfer of such Proceeds to such Municipal percentages specified in Section 2.3(a) of the Lease, the proceeds of the Bonds Account in the Debt Service Fund as set forth in a certificate of an Authorized Authority allocated to such Item of Equipment for such Municipality shall be transferred by the Representative filed with the Trustee and the Authority at the time of the deposit of the Trustee into the Municipal Account in the Debt Service Fund upon receipt of a certificate Proceeds into the Municipal Account in the Proceeds Fund. of an Authorized Municipal Representative directing the application of Bond proceeds from the Municipal Account in the Acquisition and Improvement Fund to the payment of Basic Rent or to the extent such moneys cannot be applied as a credit to Basic Rent
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Payments within thirteen (13) months as provided in Section 503(7) hereof, such Bond ensuing Interest Payment Date and Principal Installment Date, as applicable, which proceeds shall be transferred by the Trustee to a Municipal Account in the Proceeds determination shall be made at the complete discretion of the County. No later than Funds and yield restricted in accordance with the written investment instructions of the sixty (60) days prior to the next succeeding Lease Payment Date and/or Loan Payment Authority delivered to the Trustee. Such proceeds of the Bonds shall be applied by the Date, the County shall direct the Trustee in writing as to the application of such interest Trustee as a credit toward the amount of Basic Rent owed by the Municipality on the hereunder. next succeeding Lease Payment Date and each Lease Payment Date thereafter for the payment of Debt Service on the Bonds allocated to such Municipality by the transfer of (c) To the extent there are moneys from such investment such proceeds to the Municipal Account in the Debt Service Fund. earnings remaining in the Municipal Account in the Proceeds Fund prior to the last Basic Rent payment and/or Basic Loan Payment, then such moneys shall be credited to 6. (a) All interest (net of that which represents a return of accrued the final Basic Rent payment and/or Basic Loan Payment to be made by the interest paid in connection with the purchase of any investment and net of any losses Municipality by the Trustee in accordance with the written directions of the Authority. In suffered) earned or any gain realized on any moneys or investments in the Acquisition addition, such moneys may be applied to pay the cost of performing an arbitrage rebate and Improvement Fund, Debt Service Fund and Proceeds Fund and in any Municipal calculation or paying arbitrage rebate as may be directed in writing by an Authorized Accounts established within such Funds which shall be allocated and paid to the Authority Representative. respective Municipality by the Trustee in accordance with Section 603(2) of this Bond Resolution, and shall be (i) transferred by the Trustee to the Operating Fund to pay the (d) Notwithstanding the provisions of this subsection 6, the amount equal to the respective Municipality’s pro rata share of Authority Administrative amount derived from such investment earnings (and any interest thereon) in all the Expenses and County Guarantee Costs for each Bond Year, and (ii) following such Municipal Accounts in the Proceeds Fund shall be Yield restricted in accordance with transfer by the Trustee; if moneys remain, be transferred by the Trustee to the written investment instructions of the Authority delivered to the Trustee. respective Municipal Account in the Proceeds Fund and held therein by the Trustee. Such interest earned or any gain realized on any moneys or investments in the Section 508. Debt Service Fund. 1. Pursuant to Section 506(1)(a) aforesaid funds and transferred by the Trustee to the Operating Fund to pay the amount hereof, Revenues representing Basic Rent payments and/or Basic Loan Payments equal to the respective Municipality’s pro rata share of Authority Administrative deposited in the Revenue Fund on any Lease Payment Date and/or Loan Payment Expenses and County Guarantee Costs for each Bond Year, and following such transfer Date shall be credited to each Municipal Account in the Debt Service Fund not later by the Trustee; if moneys remain, be transferred by the Trustee to the Municipal than 3:00 p.m. of the second Business Day thereafter by the Trustee. Not later than Account in the Proceeds Funds and shall be applied by the Trustee, provided no Event 3:00 p.m. of the second Business Day after any Lease Payment Date and/or Loan of Default has occurred and is continuing under the Lease or Loan Agreement, and the Payment Date, the Trustee shall determine whether (a) the amounts on deposit in each County has not incurred County Guarantee Costs on behalf of such defaulting Municipal Account in the Debt Service Fund are sufficient to meet the Debt Service Municipality pursuant to Sections 508(1), 708 and 709 of this Bond Resolution, as a Requirement on such Series of Bonds for the next succeeding Interest Payment Date credit toward the amount of Basic Rent or Basic Loan Payments owed by the and Principal Installment Date, as applicable, and (b) which, if any, Municipality has not Municipality in the next succeeding Bond Year on the Lease Payment Date or Loan made a Basic Rent payment and/or Basic Loan Payment or any portion thereof, which Payment Date and each Lease Payment Date or Loan Payment Date thereafter for the determination shall be made as at the close of business on the Lease Payment Date payment of Debt Service on the Bonds allocated to such Municipality by the transfer of and/or Loan Payment Date. In the event such amounts therein are insufficient to meet such monies to the Municipal Account in the Debt Service Fund; such Debt Service Requirement, the Trustee shall give written notice thereof to the Authority, the Chief Financial Officer of the County or its designee and the nonpaying (b) To the extent the County has made a payment or otherwise Municipality of such deficiency no later than 3:00 p.m. of the second Business Day after has incurred County Guarantee Costs on behalf of a defaulting Municipality pursuant to such Lease Payment Date and/or Loan Payment Date, which notice shall state the Sections 508(1), 708 and 709 of this Bond Resolution, any such interest earned, gained amount of such deficiency as at the close of business on any Lease Payment Date or realized and deposited in the Municipal Account in the Proceeds Fund of such and/or Loan Payment Date, the identity of the defaulting Municipality and shall also defaulting Municipality shall be paid to the County by the Trustee to the extent such state that such deficiency must be cured no later than thirty (30) days before the next moneys are due and owing to the County, upon proper requisition therefor by delivery of ensuing Interest Payment Date and Principal Installment Date, as applicable. The a certificate to the Trustee executed by an Authorized County Representative and notice to the Chief Financial Officer of the County or its designee and the Authority shall Authorized Authority Representative and stating the amount due and owing, the date also include the amount of the Interest Payment and Principal Installment, as and reason why such costs were incurred and such moneys were paid by the County applicable, due and payable and the amount required to be paid by the County to cure and the identity of the defaulting Municipality on whose behalf such costs were incurred, such deficiency to enable the Trustee to make a Debt Service payment on the Bonds on or, as shall be determined by the County, shall be applied as a credit toward the Basic the next ensuing Interest Payment Date and Principal Installment Date, as applicable. Rent payments and/or Basic Loan Payments of the defaulting Municipality on the next The receipt of any such notice by the Chief Financial Officer of the County or its
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designee shall be acknowledged by the County to the Trustee within two (2) Business 4. The amount, if any, deposited in each Municipal Account in the Days after receipt thereof. If the nonpayment of the Municipality is not cured thirty (30) Debt Service Fund representing accrued interest on the proceeds of each Series of days prior to the applicable Interest Payment Date and Principal Installment Date, the Bonds allocated to each Municipality shall be set aside in such Fund and applied, in Trustee shall so notify the County and the County shall pay to the Trustee, not later than accordance with written instructions of the Authority delivered to the Trustee prior to the two (2) Business Days prior to such Interest Payment Date and Principal Installment authentication of each such Series of Bonds, to the payment of accrued interest on the Date, as applicable, any and all amounts required to pay Debt Service on the Bonds. Bonds of such Series (or Refunding Bonds issued to refund such Bonds) as the same Any late Basic Rent payments and/or Basic Loan Payments received by the Trustee becomes due and payable. subsequent to an Interest Payment Date and Principal Installment Date, as applicable, on which they were due and owing by the Municipality and subsequent to the time the 5. Amounts on deposit in each Municipal Account in the Debt Service County has made a payment with respect thereto and has incurred County Guarantee Fund for the payment of any Sinking Fund Installment shall be applied by the Trustee to Costs, shall be paid to the County, to the extent the County has made payment thereof the purchase or redemption of Bonds of the Series and maturity for which such Sinking to the Trustee, in accordance with this Section and Sections 708 and 709 hereof. Fund Installment was established in an amount not exceeding that necessary to Notwithstanding the above, the County shall have the option of determining whether complete the retirement of the balance of such Sinking Fund Installment. Not more than such late Basic Rent payment and/or Basic Loan Payment of the Municipality shall be sixty (60) days nor less than thirty (30) days preceding the due date of any such Sinking applied as a credit toward the subsequent Basic Rent payments and/or Basic Loan Fund Installment, any amounts then on deposit in each Municipal Account in the Debt Payments of such defaulting Municipality on the next succeeding Interest Payment Date Service Fund may, and if so directed by an Authorized Authority Representative shall be and Principal Installment Date, as applicable. The County shall direct the Trustee in applied by the Trustee to the purchase of Bonds of the Series and maturity for which writing as to the application of a late Basic Rent payment and/or Basic Loan Payment each Sinking Fund Installment was established in an amount not exceeding that which hereunder and under Sections 708 and 709 hereof. is necessary to complete the retirement of the unsatisfied balance of such Sinking Fund Installment. All purchases of any Bonds pursuant to this subsection shall be made at The Trustee shall promptly notify the Authority and the County of any prices not exceeding the applicable sinking fund Redemption Price of such Bonds plus delinquent Basic Rent payments and/or Basic Loan Payments received by the Trustee accrued interest thereon. The applicable sinking fund Redemption Price (or principal from a Municipality at any time after a Lease Payment Date or Loan Payment Date, but amount of maturing Bonds) of and accrued interest paid on any Bonds so purchased or prior to an Interest Payment Date and Principal Installment Date, as applicable, which redeemed shall be deemed to constitute part of the Debt Service Fund until such notice shall be sent by the Trustee to the Authority and the County not later than one (1) Sinking Fund Installment date for the purpose of calculating the amount of such fund. Business Day after receipt of any such delinquent payments. Not less than thirty (30) days preceding the due date of any such Sinking Fund Installment, the Trustee shall proceed to call for redemption, by giving notice as 2. All moneys paid by the County on behalf of any Municipality provided in Section 405 hereof, on such due date Bonds of the Series and maturity for pursuant to the County Guarantee shall be immediately deposited in the applicable which such Sinking Fund Installment was established (except in the case of Bonds Municipal Account in the Debt Service Fund, which moneys shall be applied to the maturing on a Sinking Fund Installment date) in such amount as shall be necessary to payment of Debt Service on the Bonds on such Interest Payment Date and Principal complete the retirement of the unsatisfied balance of such Sinking Fund Installment. Installment Date, as applicable. The Trustee shall pay out of the Debt Service Fund to the appropriate Paying Agent, on or before such redemption date (or maturity date), the amount required for the 3. (a) On each Interest Payment Date, the Trustee shall make redemption of the Bonds so called for redemption (or for the payment of such Bonds available to the Paying Agent from moneys available in each Municipal Account in the then maturing), and such amount shall be applied by such Paying Agent to effect such Debt Service Fund an amount which equals the interest on such Series of Bonds due redemption (or payment). All expenses in connection with the purchase or redemption on such date, which moneys shall be applied by the Paying Agent to the payment of of Bonds shall be paid by the Authority. such interest on the Interest Payment Date, and (b) on the Principal Installment Date of any Series of Bonds, the Trustee shall make available to the Paying Agent from moneys 6. In the event of the refunding of any Bonds, the Trustee shall, if an in each Municipal Account in the Debt Service Fund an amount equal to the principal of Authorized Authority Representative so directs in writing, withdraw from each Municipal such Series of Bonds due on such date, which moneys shall be applied by the Paying Account in the Debt Service Fund all, or any portion of, the amounts accumulated Agent to the payment of such principal on the Principal Installment Date. The Trustee therein with respect to Debt Service on the Bonds being refunded, and deposit such may also pay out of the Debt Service Fund the accrued interest included in the amounts in such Fund or Account established under the Resolution as set forth in such purchase price of such Series of Bonds, pursuant to the provisions of subsection (4) written direction; provided that such withdrawal shall not be made unless (a) below. immediately thereafter the Bonds being refunded shall be deemed to have been paid pursuant to subsection 2 of Section 1301, and (b) the amount remaining in the Debt Service Fund, after giving effect to the issuance of Refunding Bonds and the disposition
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of the proceeds thereof, shall not be less than the requirement of such fund pursuant to provide moneys when needed for the payments to be made from such Fund and in paragraph (1) of Section 508. In the event of such refunding, an Authorized Authority accordance with Section 603 hereof. The interest earned on any moneys or Representative may also direct the Trustee in writing to withdraw from the Debt Service investments in the Rebate Fund shall be retained in such Fund. Fund all, or any portion of, the amounts accumulated therein with respect to Debt Service on the Bonds being refunded and deposit such amounts in any Fund under this (d) Pursuant to the provisions of Section 603(4) hereof, investment Resolution to be used to reimburse the County for County Guarantee Costs and for earnings from the Revenue Fund and Operating Fund may be deposited in the Rebate other purposes specified hereunder; provided, however, that any such withdrawal shall Fund upon written direction of an Authorized Authority Representative to the Trustee. not be made unless items (a) and (b) referred to hereinabove have been satisfied and provided, further, that, at the time of such withdrawal, there shall exist no deficiency in Section 510. Trustee No Obligation for Rebate. Notwithstanding any Fund or Account mandated by and held under the Resolution. the provisions of Section 509 herein, the Trustee shall have no responsibility for the calculation, collection or payment pursuant to the Code of any rebate to the United Section 509. Rebate Fund. Moneys on deposit in the Rebate Fund, States of America of arbitrage earnings on proceeds of Bonds issued pursuant to this including earnings on or gain realized on any moneys or investments therein, shall be Resolution. The Authority agrees to perform or cause to be performed such calculation, held by the Trustee in trust and applied and invested as provided by instructions to the collection and payment in accordance with the requirements of the Code, and hereby Authority contained in the tax certificate delivered pursuant to Section 820 hereof. indemnifies and holds harmless the Trustee from any liability arising out of the nonperformance by the Authority of such requirements under the Code. (a) The Authority shall determine or shall cause to be determined the amounts necessary to be rebated to the Internal Revenue Service (the "Rebate Section 511. Moneys Remaining in Funds and Accounts; Requirement") and the Authority shall cause each Municipality to deposit such amounts Reimbursement of County. Except with respect to unclaimed funds pursuant to in the Rebate Fund or shall cause the transfer of such amounts from a Municipal Article XIII hereof, upon the final maturity of any Series of Bonds issued hereunder, any Account in the Proceeds Fund to the Rebate Fund and the Authority shall transfer or moneys remaining in the Funds and Accounts held under this Resolution shall be paid cause to be transferred by the Trustee pursuant to the written instructions of the to the County by the Trustee free and clear of the lien and pledge of this Resolution to Authority, at such times and to such person as required by section 148 of the Code an the extent required to reimburse the County for County Guarantee Costs and further, amount equal to the Rebate Requirement from the Rebate Fund. To the extent such after such payment has been made to the County, to the extent any moneys are amounts on deposit in the Rebate Fund are not sufficient to meet the Rebate remaining in such Funds and Accounts and the Fiduciaries have unreimbursed Requirement, amounts shall be immediately paid by each Municipality to the Trustee for expenses, such moneys shall be paid to each such Fiduciary by the Trustee, free and deposit in the Rebate Fund. Notwithstanding the above, moneys comprising excess clear of the lien and pledge of this Resolution to the extent required to reimburse such Bond proceeds and investment earnings transferred to a Municipal Account in the Fiduciary for such expenses, and thereafter the balance therein shall be paid and shall Proceeds Fund pursuant to Sections 503(8) and 507(6)(a) may be transferred to the belong to the Authority free and clear of the lien and pledge of the Bond Resolution. Rebate Fund and may be used to pay the cost of performing an arbitrage rebate calculation or paying arbitrage rebate as may be directed in writing by an Authorized Authority Representative.
Notwithstanding anything contained in this Resolution to the contrary, neither the Authority nor the Trustee shall be responsible or liable for any loss, liability, or expense incurred to the extent incurred as a result of the failure of each Municipality to fulfill its respective obligations with respect to the calculation and payment of the Rebate Requirement.
(b) The Trustee, as directed in writing, by an Authorized Authority Representative, shall apply or cause to be applied the amounts in the Rebate Fund at the times and in the amounts required by section 148 of the Code solely for the purpose of paying the United States in accordance with section 148 of the Code.
(c) Moneys held in the Rebate Fund shall be invested and reinvested by the Trustee in Investment Securities, as directed, in writing, by an Authorized Authority Representative, that mature not later than such times as shall be necessary to
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ARTICLE VI Price of and interest on any Series of Bonds, or to give security for any moneys which shall be represented by Investment Securities purchased as an investment of such DEPOSITORIES OF MONEYS, SECURITY FOR DEPOSITS AND moneys. INVESTMENT OF FUNDS 3. All moneys deposited with the Trustee and each Fiduciary shall be Section 601. Depositories. 1. All moneys held by the Trustee and credited to the particular Fund or Account, including any Municipal Account, to which the Authority under the provisions of this Resolution shall constitute trust funds and the such moneys belong and, except as provided with respect to the investment of moneys Authority may deposit such moneys with the Trustee or any one of the Fiduciaries in in Investment Securities in Section 603 hereof, the moneys credited to each particular trust for the Authority, each Municipality and, as applicable, the County. All moneys Fund or Account shall be kept separate and apart from, and not commingled with, any deposited under the provisions of this Resolution with the Trustee shall be held in trust moneys credited to any other Fund or Account or any other moneys deposited with the and applied only in accordance with the provisions of this Resolution, and each of the Trustee and each Fiduciary. Funds and Accounts established by this Resolution shall be a trust fund for the purpose thereof. Section 603. Investment of Certain Funds. 1. Moneys held in the Revenue Fund or the Debt Service Fund, including the Municipal Account(s) 2. Each Fiduciary shall be a bank or trust company organized under established therein, shall be invested and reinvested by the Trustee to the fullest extent the laws of the State of New Jersey or a national banking association having capital practicable in the types of securities defined in subsection (a) (1), (2) and (3) of the stock, surplus and undivided earnings of $100,000,000 or more and willing and able to definition of Investment Securities in Section 101 hereof, which Investment Securities accept the office on reasonable and customary terms and authorized by law to act in shall mature not later than such times as shall be necessary to provide moneys when accordance with the provisions of this Resolution. No moneys shall be deposited with needed for payments to be made from such Funds. Moneys held in the Acquisition and any Fiduciary in any amount exceeding fifteen percent (15%) of the amount which an Improvement Fund, the Operating Fund and the Proceeds Fund may be invested and officer of such Fiduciary shall certify to the Authority and the Trustee as to the capital reinvested in Investment Securities which mature not later than such times as shall be stock and surplus of such Fiduciary. necessary to provide moneys when needed for payments to be made from such Funds. Moneys held in the Rebate Fund, if any, shall be invested and reinvested in accordance Section 602. Deposits. 1. All Revenues and moneys held by the with the written instructions received from any Authorized Authority Representative. Trustee or any Fiduciary under this Resolution may be placed on demand or time The Trustee shall make all such investments of moneys held by it in accordance with deposit, if and as directed by the Authority, provided that such deposits shall permit the written instructions from time to time received from any Authorized Authority moneys so held to be available for use at the time when needed. Any such deposit may Representative. In making any investment in any Investment Securities with moneys in be made in the commercial banking department of any Fiduciary which may honor any Fund established under this Resolution, the Authority may instruct the Trustee or checks and drafts on such deposit with the same force and effect as if it were not such any Fiduciary in writing to combine such moneys in any other Fund, if permitted Fiduciary. All moneys held by any Fiduciary, as such, may be deposited by such hereunder, but solely for purposes of making such investment in such Investment Fiduciary in its banking department on demand or, if and to the extent directed by the Securities. Authority and acceptable to such Fiduciary, on time deposit, provided that such moneys on deposit be available for use at the time when needed. 2. All interest (net of that which represents a return of accrued interest paid in connection with the purchase of any investment and net of any losses suffered) 2. All moneys held under this Resolution by the Trustee or any earned or any gain realized on any moneys or investments in the Acquisition and Fiduciary shall be (a) either (1) continuously and fully insured by the Federal Deposit Improvement Fund, Debt Service Fund and Proceeds Fund and any Municipal Accounts Insurance Corporation, or (2) continuously and fully secured by lodging with the Trustee established within such Funds shall be (i) be transferred by the Trustee to the Operating or its agents, as custodian, as collateral security, such securities as are described in Fund to pay the amount equal to the respective Municipality’s pro rata share of Authority subsection (a) (1) and (3) of the definition of Investment Securities in Section 101 Administrative Expenses and County Guarantee Costs for each Bond Year, and (ii) hereof having a market value at the time of deposit (exclusive of accrued interest) not following such transfer to the Operating Fund, if moneys remain, be transferred by the less than the amount of such moneys, or (b) secured in such other manner as may then Trustee and held for the benefit of the Municipal Accounts in the Proceeds Fund and be required by applicable Federal or State laws and regulations and applicable state allocated to the respective Municipality and shall be paid into the respective Municipal laws and regulations of the state in which the Trustee or such Fiduciary (as the case Accounts in the Proceeds Fund on a periodic basis at least quarterly or as otherwise may be) is located, regarding security for, or granting a preference in the case of, the shall be directed by the Authority. The Trustee shall annually notify each Municipality, deposit of trust funds; provided, however, that it shall not be necessary for the the County, and the Authority in writing of such interest and earnings. Such interest in Fiduciaries to give security under this paragraph 2 for the deposit of any moneys with each Municipal Account in the Proceeds Fund may be applied by the Authority in them held in trust and set aside by them for the payment of the principal or Redemption accordance with the provisions of Section 507(6) hereof.
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3. In the absence of written investment direction from an Authorized The Trustee shall not be liable or responsible for any loss resulting from Authority Representative, the Trustee shall invest all uninvested moneys which the any such investment, sale or presentation for investment made in the manner provided Authority has failed to direct in money market funds customarily invested in by the above. Trustee.
4. Notwithstanding anything herein to the contrary, the Authority may direct the Trustee to deposit interest earnings from the Revenue Fund and Operating Fund into the Rebate Fund to pay any amounts required to be set aside for rebate to the Internal Revenue Service pursuant to the Code.
5. Nothing in this Resolution shall prevent any Investment Securities acquired as investments of or security for funds held under this Resolution from being issued or held in book-entry form on the books of the Department of the Treasury of the United States.
6. Nothing in this Resolution shall preclude the Trustee from investing or reinvesting moneys through its bond department; provided, however, that the Authority may, in its discretion, direct that such moneys be invested or reinvested in a manner other than through such bond department.
Section 604. Valuation and Sale of Investments. Obligations purchased as an investment of moneys in any Fund or Account created under the provisions of this Resolution shall be deemed at all times to be a part of such Fund or Account and any profit realized from the liquidation of such investment shall be credited to such Fund or Account, and any loss resulting from the liquidation of such investment shall be charged to the respective Fund or Account, subject to any transfers authorized hereunder.
In computing the amount in any Fund or Account created under the provisions of this Resolution for any purpose provided in this Resolution, obligations purchased as an investment of moneys therein shall be valued at the lesser of cost or market value thereof.
Except as otherwise provided in this Resolution, the Authority shall direct the Trustee to sell at the best price reasonably obtainable or present for redemption or transfer as provided in the next sentence any obligation so purchased as an investment whenever either shall be requested in writing by an Authorized Authority Representative to do so or whenever it shall be necessary in order to provide moneys to meet any payment or transfer from any Fund or Account held by it. In lieu of such sale or presentment for redemption, the Trustee may, in making the payment or transfer from any Fund or Account mentioned in the preceding sentence, transfer at cost such investment obligations or coupons for interest appertaining thereto if such investment obligations or coupons shall mature or be collectable at or prior to the time the proceeds thereof shall be needed.
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ARTICLE VII (v) such other certificates, documents, opinions and information as the Authority and the County may LEASES OR LOAN AGREEMENTS WITH MUNICIPALITIES reasonably require in connection with the execution, delivery and implementation of each Lease and/or Loan Agreement Section 701. Terms and Conditions for Lease or Loan Agreement. and the issuance of such Series of Bonds. The Authority shall enter into a Lease and/or a Loan Agreement with each Municipality, in the manner, on the terms and conditions and upon submission of the documents All opinions and certificates required under this Section 703 shall be dated required by this Article VII. the closing date of such Series of Bonds and all such opinions shall be addressed to the Authority, the County, the underwriter and the Trustee. Section 702. Form of Lease and Loan Agreement. Each Lease and Loan Agreement shall be substantially in the forms approved by the Authority pursuant Section 704. Default Under Each Lease or Loan Agreement. The to the Determination Resolution with such revisions therein as shall be approved by the Trustee shall, by 3:00 p.m. of the second Business Day after a Lease Payment Date or Authority. Loan Payment Date, immediately notify the Authority, the Chief Financial Officer of the County and the nonpaying Municipality of the Trustee's failure to receive a Basic Rent Section 703. Delivery of Documents in Connection with Leases payment or Basic Loan Payment from such Municipality and of any other Event of and the Loan Agreements. Prior to or at the execution and delivery of the Lease and Default under the Lease or Loan Agreement known to the Trustee pursuant to Section Loan Agreement with each Municipality and the closing on each Series of Bonds, the 908 hereof. Authority and the Trustee shall have received the following documents from each Municipality: Notwithstanding the above, the failure of the Trustee to receive any Basic Rent payment or Basic Loan Payment from any Municipality on any Lease Payment (i) an opinion of counsel or bond counsel for each Date or Loan Payment Date shall not cause an Event of Default for the purposes of Municipality executing a Lease and/or Loan Agreement with Article IX of this Resolution or the acceleration of any of the Bonds then Outstanding. the Authority, as approved by Bond Counsel to the Authority and counsel to the County, to the effect that the Lease In the event of a default in the payment of Basic Rent or Basic Loan and/or Loan Agreement was duly authorized by such Payment due and owing to the Authority by any Municipality under the applicable Lease Municipality and is a valid and binding obligation of such or Loan Agreement, the County shall be unconditionally obligated to pay such sum of Municipality; money due and owing by such Municipality to the Trustee pursuant to the County Guarantee and the Guarantee Agreement so as not to cause an Event of Default under (ii) counterparts of each Lease and/or Loan Section 901(i) or (ii) hereunder and an acceleration of any Series of Bonds. Agreement executed by each Municipality; Section 705. The Trustee's Obligations. 1. Subject to the (iii) copies of the ordinance(s) adopted by the provisions of Article IX and Section 1003 hereof, the Trustee shall reasonably assist and governing bodies of each Municipality authorizing the cooperate with the Authority and the County in the enforcement of all terms and execution and delivery of the Lease and/or Loan Agreement conditions of each Lease and/or Loan Agreement with each Municipality, including and related applicable matters, certified by an Authorized (without limitation) the prompt payment of all Basic Rent, Basic Loan Payments, Municipal Representative or the clerk of the Municipality; Additional Rent payments and Additional Loan Payments, and all other amounts due to the Trustee thereunder, and the observance and performance of all duties, covenants, (iv) evidence satisfactory to Bond Counsel to the obligations and agreements thereunder. Authority and counsel to the County that the Basic Rent, Basic Loan Payments, Additional Rent payments and The Trustee shall not release the duties, covenants, obligations or Additional Loan Payments under each Lease or Loan agreements of each Municipality under each Lease and/or Loan Agreement and shall at Agreement, assuming the Basic Rent, Basic Loan all times, to the extent permitted by law, defend, enforce, preserve and protect the rights Payments, Additional Rent payments and Additional Loan and privileges of the Authority, the County and the Holders under or with respect to Payments attributable to each Lease or Loan Agreement are each Lease and/or Loan Agreement; provided, however, that this provision shall not be timely paid by each Municipality, are sufficient to pay Debt construed to prevent the Trustee (with the written consent of the Authority and the Service on each Series of Bonds, Authority Administrative County) from settling a default under each Lease and/or Loan Agreement on such terms Expenses and all costs of the program, respectively; and
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as the Trustee shall determine to be in the best interests of the Authority and the Section 708. County Guarantee. (a) Each Lease and/or Loan Holders. Agreement shall provide that each Municipality shall pay on each Lease Payment Date and/or Loan Payment Date during the Bond Year, Basic Rent and/or Basic Loan 2. The Trustee, the Authority and the Chief Financial Officer of the Payments which together with other moneys on deposit in the Municipal Account in the County or its designee shall receive from each Municipality, on an annual basis as long Debt Service Fund will equal the Debt Service Requirement on the Bonds attributable to as the County Guarantee is in effect and any Debt Service on the Bonds attributable to such Municipality on the next succeeding Interest Payment Date and Principal each Municipality remains unpaid, within five (5) Business Days after the adoption of a Installment Date, as applicable under each Lease and/or Loan Agreement during each temporary budget appropriation and/or the filing of an annual budget as introduced by Bond Year. Each Basic Rent payment and/or Basic Loan Payment due under each the Municipality with the Division of Local Government Services, a certificate of the Lease and/or Loan Agreement shall be on deposit in the Revenue Fund not later than Chief Financial Officer of the Municipality stating that the temporary budget the Lease Payment Date and/or Loan Payment Date. appropriation and/or annual budget contains a line item which represents an amount due under the Lease and/or Loan Agreement for all Rental Payments and/or Loan (b) Not later than 3:00 p.m. of the second Business Day after any Payments due from the Municipality during the Municipality's Fiscal Year (as used Lease Payment Date and/or Loan Payment Date the Trustee shall determine (i) whether herein, the "Certificate"). Such Certificate shall have attached a copy of the page of the the amounts on deposit in each Municipal Account in the Debt Service Fund are temporary budget appropriation and/or budget on which the line item appears. The sufficient to meet the Debt Service Requirement on such Series of Bonds for the next Trustee, the Authority and the Chief Financial Officer of the County or its designee shall succeeding Interest Payment Date and Principal Installment Date, as applicable, and (ii) also receive from each Municipality, within five (5) Business Days thereof, notice of any which, if any, Municipality has not made a Basic Rent payment and/or Basic Loan revisions to such line item or the transfer of any moneys out of such line item. In the Payment or portion thereof, which determination shall be made as at the close of event such Certificate is not received by the Trustee sixty (60) days following the business on the Lease Payment Date and/or Loan Payment Date. In the event such beginning of the Municipality's Fiscal Year or the Trustee otherwise has actual amounts are insufficient to meet such Debt Service Requirement the Trustee shall, in knowledge that the Municipality has revised its budget or transferred money out of a line writing, notify the Authority, the Chief Financial Officer of the County or its designee and item, as applicable, the Trustee shall promptly notify the Authority and the Chief the nonpaying Municipality of such deficiency no later than 3:00 p.m. of the second Financial Officer of the County or its designee of such event(s) and the Authority and Business Day after such Lease Payment Date and/or Loan Payment Date, which notice the County shall take immediate action to cause all Lease Payments and/or Loan shall be in conformance with the provisions of subsection (c) hereof, and shall demand Payments to be timely paid by the Municipality. For purposes of this section, the such Basic Rent payment and/or Basic Loan Payment from such Municipality with Trustee shall be deemed to have actual knowledge only if an officer of the corporate directions to make such Lease Payment and/or Loan Payment not later than thirty (30) trust department of the Trustee has actual knowledge thereof. days before any Interest Payment Date and Principal Installment Date, as applicable. The County shall acknowledge receipt of any such notice from the Trustee within two Section 706. Termination of Each Lease and/or Loan Agreement. (2) Business Days after receipt thereof. Upon the payment in full by each Municipality of all amounts due under its Lease and/or Loan Agreement, the Trustee shall, at the written direction of the Authority, undertake (c) In accordance with Section 508 hereof, in the event a Municipality such actions as shall be required to effectuate the provisions of Article VIII of the Lease, has failed to make a payment of Basic Rent on any Lease Payment Date and/or Basic including (without limitation) the execution of all relevant documents in connection with Loan Payment on any Loan Payment Date so that the total amount of Basic Rent such actions. payments and/or Basic Loan Payments so received by the Trustee and on deposit in each of the Municipal Accounts in the Debt Service Fund is insufficient to meet the Debt Section 707. Files. After the execution and delivery of each Lease Service Requirement on a Series of Bonds due on the next ensuing Interest Payment and/or Loan Agreement, the Trustee shall retain all the documents received by it Date and Principal Installment Date, as applicable, the Trustee shall notify the Authority pursuant to this Article VII in connection with each Lease and/or Loan Agreement and the Chief Financial Officer of the County or its designee in writing in accordance executed by each Municipality in a file pertaining to each Municipality, to which file the with the County Guarantee Agreement of such deficiency not later than 3:00 p.m. of the Trustee shall from time to time add all records and other documents pertaining to Rental second Business Day after a Lease Payment Date and/or Loan Payment Date, which Payments and/or Loan Payments and other amounts received by the Trustee under notification shall specify the amount of the Interest Payment and Principal Installment each Lease and/or Loan Agreement and all communications from or received by the due and payable and the amount of such deficiency owed by the nonpaying Municipality Trustee with respect to the Municipality. Such file shall be kept at the principal and shall state that an amount equal to such deficiency is required to be paid by the corporate trust office of the Trustee and shall be available for inspection by the Authority County, which amount shall be due and payable by the County to the Trustee not later at reasonable times and under reasonable circumstances. than two (2) Business Days prior to the Interest Payment Date and Principal Installment Date, as applicable, on such Series of Bonds, unless the deficiency shall have been satisfied by the defaulting Municipality no later than thirty (30) days prior to the next
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ensuing Interest Payment Date and Principal Installment Date, as applicable. The ARTICLE VIII County shall acknowledge receipt of any such notice within two (2) Business Days after receipt thereof. Notwithstanding the above, failure of the Trustee to give the notices PARTICULAR COVENANTS OF THE AUTHORITY required under Sections 704 and 705 hereof, or any defect in the notice to the County shall not relieve the County of its obligations under the County Guarantee. The Authority covenants and agrees with the Trustee and the Bondholders as follows: (d) The County shall take all actions necessary and permitted by law, which actions may include ex parte actions, to make payment of an amount, equal to Section 801. Payment of Bonds. The Authority shall duly and the deficiency owed by the nonpaying Municipality, which amount, when added to punctually pay or cause to be paid, but solely from the Pledged Property, the principal of available amounts on deposit in such nonpaying Municipality's Municipal Account in the every Bond and the interest thereon, at the dates and places and in the manner Debt Service Fund, shall be sufficient to pay the principal of and interest on the Bonds provided in the Bonds, according to the true intent and meaning thereof. due on the next ensuing Interest Payment Date and Principal Installment Date, as applicable. Section 802. Extension of Payment of Bonds. The Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Section 709. Subrogation of County to Bondholders. The County Bonds or the time of payment of any claims for interest by the purchase or funding of shall, to the extent it incurs County Guarantee Costs pursuant to the County Guarantee such Bonds or claims for interest or by any other arrangement, and in case the maturity and the Guarantee Agreement to cure a deficiency in Debt Service resulting from a of any of the Bonds or the time for payment of any such claims for interest shall be deficiency in Basic Rent payments of Basic Loan Payments, which payments are to be extended, such Bonds or claims for interest shall not be entitled, in case of any default applied to the payment of principal or Redemption Price of and interest on a Series of under this Resolution, to the benefit of this Resolution or to any payment out of Bonds, become subrogated to the rights of Bondholders. In the case of subrogation for Revenues or Funds established by this Resolution, including the investment, if any, payments applied to the payment of Debt Service on a Series of Bonds on any Interest thereof, pledged under this Resolution or the moneys (except moneys held in trust for Payment Date or Principal Installment Date, as applicable, the Trustee shall note on its the payment of particular Bonds or claims for interest pursuant to this Resolution) held records the County's rights as subrogee on the Funds and Accounts of the Authority by the Fiduciaries, except subject to the prior payment of the principal of all Bonds held under this Resolution. Notwithstanding anything in this Resolution to the contrary, Outstanding the maturity of which has not been extended and of such portion of the the Trustee shall make payment of delinquent Basic Rent payments or Basic Loan accrued interest on the Bonds as shall not be represented by such extended claims for Payments received from the defaulting Municipality directly to the County to the extent interest. Nothing herein shall be deemed to limit the right of the Authority to issue the County is a subrogee with respect thereto, unless otherwise directed by the County Refunding Bonds pursuant to Section 205 and such issuance shall not be deemed to pursuant to Section 508 hereof. constitute an extension of maturity of the Bonds. Section 803. Offices for Servicing Bonds. The Authority shall at all times maintain one or more agencies in the State of New Jersey, and may maintain one or more such agencies in any other state or states, where Bonds may be presented for payment. The Authority hereby appoints the Trustee as a Bond Registrar, and the Authority shall at all times maintain one or more agencies where Bonds may be presented for registration or transfer and where notices, demands and other documents may be served upon the Authority in respect of the Bonds or of this Resolution, and the Trustee shall continuously maintain or make arrangements to provide such services.
Section 804. Further Assurance. At any and all times the Authority shall, as far as it may be authorized by law, comply with any reasonable request of the Trustee to pass, make, do, execute, acknowledge and deliver all and every such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring, conveying, granting, pledging, assigning and confirming all and singular the rights, Revenues and other moneys, securities and funds hereby pledged, or intended so to be, or which the Authority may become bound to pledge.
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Section 805. Power to Issue Bonds and Pledge Pledged Property. Authority is in default with respect to any of the covenants, agreements or conditions on The Authority is duly authorized under all applicable laws to create and issue the Bonds, its part contained in this Resolution, and if so, the nature of such default. to adopt this Resolution and to pledge the Pledged Property purported to be subjected to the lien of this Resolution in the manner and to the extent provided in this Resolution. 4. The Authority shall file or cause to be filed with the Trustee and the Except to the extent otherwise provided in this Resolution, the Pledged Property so County (a) forthwith upon becoming aware of any Event of Default or default in the pledged is and will be free and clear of any other pledge, lien, charge or encumbrance performance by the Authority of any covenant, agreement or condition contained in this thereon or with respect thereto prior to, or of equal rank with the pledge and assignment Resolution, a certificate signed by an Authorized Authority Representative and created by this Resolution, and all action on the part of the Authority to that end has specifying such Event of Default or default and (b) within ninety (90) days after the end been and will be duly and validly taken. The Bonds and the provisions of this of each Fiscal Year, a certificate signed by an appropriate Authorized Authority Resolution are and will be the valid and legally binding obligations of the Authority. The Representative stating whether, to the best of his knowledge and belief, the Authority Authority shall at all times, to the extent permitted by law, defend, preserve and protect has kept, observed, performed and fulfilled its covenants and obligations contained in the pledge of the Pledged Property under this Resolution and all the rights of the this Resolution and that there does not exist at the date of such certificate any default Bondholders under this Resolution against all claims and demands of all persons by the Authority under this Resolution or any Event of Default or other event which, with whomsoever. the lapse of time specified in Section 901, would become an Event of Default, or, if any such default or Event of Default or other event shall so exist, specifying the same and Section 806. Creation of Liens. The Authority shall not issue any the nature and status thereof. bonds, notes, debentures or other evidences of indebtedness of similar nature, other than the Bonds, payable out of or secured by a pledge or assignment of the Pledged 5. The reports, statements and other documents required to be Property held or set aside by the Authority or by Fiduciaries under this Resolution, and furnished to the Trustee pursuant to any provisions of this Resolution shall be available shall not create or cause to be created any lien or charge on the Pledged Property; for the inspection of the Bondholders at the principal corporate trust office of the Trustee provided, however, that nothing contained in this Resolution shall prevent the Authority and shall be mailed to each Bondholder, at the expense of the Authority, who shall file a from issuing, if and to the extent permitted by law, evidences of indebtedness payable written request therefor with the Authority. The Authority may charge or cause to be out of or secured by a pledge and assignment of the Pledged Property on and after charged each Bondholder requesting such reports, statements and other documents a such date as the pledge of the Pledged Property provided in this Resolution shall be reasonable fee to cover reproduction, handling and postage. discharged and satisfied as provided in Section 1301 hereof. Section 808. Payment of Taxes and Charges. The Authority will Section 807. Accounts and Reports. 1. The Authority shall keep or from time to time duly pay and discharge, or cause to be paid and discharged, all taxes, cause to be kept proper books of record and account (separate from all other records assessments and other governmental charges, or required payments in lieu thereof, and accounts) in accordance with generally accepted accounting principles in which lawfully imposed upon the properties of the Authority or upon the rights, revenues, complete and correct entries shall be made of its transactions relating to the amount of income, receipts, and other moneys, securities and funds of the Authority when the Revenues and the application thereof, each Fund or Account established under this same shall become due (including all rights, moneys and other property transferred, Resolution and the payment of County Guarantee Costs by the County. All books and assigned or pledged under this Resolution), and all lawful claims for labor and material papers of the Authority shall, subject to the terms thereof, at all times be subject to the and supplies, except those taxes, assessments, charges or claims which the Authority inspection of the Trustee, the County and the Holders of the Bonds or their shall in good faith contest by proper legal proceedings if the Authority shall in all such representatives duly authorized in writing. cases have set aside on its books reserves deemed adequate with respect thereto.
2. The Trustee and any Fiduciary shall advise the Authority as soon Section 809. The Leases or Loan Agreements. The Authority shall as practicable after the end of each Month of the respective transactions during such collect or cause to be collected and forthwith cause to be deposited in the Revenue Month relating to each Fund or Account held by it under the Resolution. Fund held by the Trustee all amounts, if any, payable to it pursuant to each Lease and/or Loan Agreement. The Authority shall provide the Trustee with a certified copy of 3. The Authority shall annually, within 120 days after the close of its all requests for Additional Rent under each Lease and/or Additional Loan Payments Fiscal Year, file or cause to be filed with the Trustee and the County, and otherwise as under each Loan Agreement. The Authority shall enforce or cause to be enforced all of provided by law, a copy of an annual report for such Fiscal Year, accompanied by an the provisions of each Lease and/or Loan Agreement. Subject to the provisions of Accountant's Certificate and including the following statements in reasonable detail: Section 815 hereof, the Authority will not consent or agree to or permit any amendment, (i) a statement of assets and liabilities as of the end of such Fiscal Year; and (ii) a change or modification to the Lease and/or Loan Agreement which would adversely statement of revenues and expenses of the Authority for such Fiscal Year. Such affect the rights or security of Bondholders or the County. Copies of each Lease and Accountant's Certificate shall state whether or not, to the knowledge of the signer, the Loan Agreement certified by an Authorized Authority Representative shall be filed with
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the Trustee, and copies of any such amendment certified by an Authorized Authority 4. The Authority shall file with the Trustee annually, within 100 days Representative shall be filed with the Trustee and the County. after the close of each calendar year, a certificate of an Authorized Authority Representative setting forth a description in reasonable detail of the insurance then in Section 810. Power to Determine and Collect Rentals and/or Loan effect with respect to the Improvement and/or Equipment and that the Authority has Payments. The Authority has, and will have as long as any Bonds are Outstanding complied in all respects with the requirements of this Section. hereunder, good right and lawful power to establish and collect or cause to be established and collected the Rentals and the Loan Payments. Section 814. Application of Insurance Proceeds. The Proceeds of any insurance, including the Proceeds of any self-insurance fund, or condemnation Section 811. Rentals and/or Loan Payments. Prior to the execution award paid on account of any damage or destruction to the Equipment or any portion of each Lease and/or Loan Agreement, and in each and every Fiscal Year during which thereof (other than any business interruption loss insurance) shall be applied as set the Bonds are Outstanding, the Authority shall at all times establish and collect or cause forth in Section 5.4 of each Lease and Section 503(6), Section 506(2) and Section 507 to be established and collected Rentals and Loan Payments, as applicable, as shall be hereof. required to provide Revenues at least sufficient, in the aggregate, together with other available funds, for the payment of the sum of: Section 815. Enforcement of Leases and Loan Agreements; Amendments. The Authority shall enforce the provisions of each Lease and Loan (a) an amount equal to the Debt Service on the Agreement and shall duly perform its covenants and agreements thereunder, as Bonds for such Fiscal Year; and applicable, for the benefit of the Trustee, the Bondholders and the County. Each Lease and/or Loan Agreement may not be amended, changed, modified, altered or terminated (b) all other charges or liens whatsoever payable so as to adversely affect the interests of the County or the Holders of Outstanding out of Revenues during such Fiscal Year. Bonds without the prior written consent of (a) the County and (b)(i) the Holders of at least fifty-one percent (51%) in aggregate principal amount of the Bonds then Section 812. Acquisition and Installation of Improvement or Outstanding, or (ii) in case less than all of the several Series of Bonds then Outstanding Equipment and its Operation and Maintenance. 1. The Authority shall cause each are affected by the modifications or amendments, the Holders of not less than fifty-one Municipality to acquire and install each Improvement or Item of Equipment with due percent (51%) in aggregate principal amount of the Bonds of each Series so affected diligence and in a sound and economical manner. then Outstanding; provided, however, that if such modification or amendment will, by its terms, not take effect so long as any Bonds of any specified Series remain Outstanding, 2. The Authority shall at all times cause each Municipality to use the the consent of the Holders of such Bonds shall not be required and such Bonds shall Improvement or Equipment properly and in an efficient and economical manner, not be deemed to be Outstanding for the purpose of any calculation of Outstanding consistent with good business practices, and shall maintain, preserve, reconstruct and Bonds under this Section; provided, further, that no such amendment, change, keep the same or cause the same to be so maintained, preserved, reconstructed and modification, alteration or termination will reduce the percentage of the aggregate kept, with the appurtenances and every part and parcel thereof, in good repair, working principal amount of Outstanding Bonds the consent of the Holders of which is a order and condition, and shall from time to time make, or cause to be made, all requirement for any such amendment, change, modification, alteration or termination, or necessary and proper repairs, replacements and renewals so that at all times the decrease the amount of any payment required to be made under each Lease and/or leasing of the Equipment or the loan for the undertaking of the Improvement may be Loan Agreement or extend the time of payment thereof. Each Lease and/or Loan properly and advantageously conducted. Agreement may be amended, changed, modified or altered without the consent of the Section 813. Maintenance of Insurance. 1. The Authority shall at Holders of Outstanding Bonds (but with the prior written consent of the County) to all times cause each Municipality (for the benefit of the Authority) to maintain such provide necessary changes in connection with the issuance of Refunding Bonds, to cure insurance as shall be required by the provisions of each Lease and/or Loan Agreement. any ambiguity therein, to correct or supplement any provisions contained in each Lease and/or Loan Agreement which may be defective or inconsistent with any other 2. The Authority shall also maintain any additional or other insurance provisions contained in each Lease and/or Loan Agreement or to provide other changes which it shall deem necessary or advisable to protect its interests and those of the which will not adversely affect the interest of such Holders, provided that any such Bondholders. changes shall not cause the Lease Payments and/or Loan Payments thereunder to be insufficient to pay Debt Service on all Outstanding Bonds. Notwithstanding the above, 3. Any such insurance shall be in the form of policies or contracts for amendments to each Lease and/or Loan Agreement to add, delete or substitute insurance with insurers of good standing. Equipment and to effectuate amendments to Exhibits A and G to each Lease resulting therefrom pursuant to Section 8.1 of the Lease may be accomplished with the prior written consent of the Authority but without the consent of the County and the Trustee,
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written or otherwise. Subsequent to the execution by the Authority of any amendment Section 819. General Conditions. 1. Upon the date of to each Lease and/or Loan Agreement, a copy thereof certified by an Authorized authentication and delivery of any Series of Bonds, all conditions, acts and things Authority Representative shall be filed with the Trustee and the County. required by law and this Resolution to exist, to have happened and to have been performed precedent to and in the issuance of such Series of Bonds shall exist, have Section 816. Termination of the Lease or Loan Agreement. In the happened and have been performed and the issue of such Series of Bonds, together event any Municipality is unable to pay when due the Rental Payments and/or Loan with all other indebtedness of the Authority, shall comply in all respects with the Payments to be paid under the Lease and/or Loan Agreement or is unable to observe applicable laws of the State. and perform any covenant or agreement on its part to be observed or performed under the Lease and/or Loan Agreement, the Authority upon written request of the County and 2. The Authority shall at all times maintain its existence and shall do either the Trustee or the Holders of fifty-one percent (51%) in principal amount of the and perform or cause to be done and performed all acts and things required to be done Bonds then Outstanding, shall exercise its right to accelerate the Lease and/or Loan or performed by or on behalf of the Authority under the provisions of the Act, this Agreement and exercise remedies pursuant to Article VII of the Lease or Loan Resolution and the County Guarantee Agreement, including the exercise of its remedies Agreement. thereunder.
Section 817. Enforcement of County Guarantee Agreement. The Section 820. Tax Covenant. 1. The Authority covenants to maintain Authority shall undertake all actions necessary so as to entitle it to collect payments the exclusion from gross income for Federal income tax purposes of interest on the from the County, if necessary, in accordance with the terms of the Act and the terms of Bonds, to the extent that Bond Counsel has rendered an opinion to the effect that, the County Guarantee Agreement. The Authority shall not release or modify the subject to the conditions and qualifications contained in each Lease and/or Loan obligations of the County under the terms of the County Guarantee Agreement in any Agreement, interest on the Bonds is excludable from gross income for Federal income manner which would adversely affect the County's obligation to make payments tax purposes. In furtherance of the covenant contained in the preceding sentence, the thereunder. Any modification of the County Guarantee Agreement shall be Authority will, among other things, comply with the instructions as to compliance with accompanied by a written consent of the County and an opinion of counsel to the rebate contained in the tax certificate delivered by the Authority as of the date of, and County, or its successor, which states that such modification is in compliance with the with respect to, the first issuance and delivery of the Bonds, as a source of guidance for provisions of this Section. Any such modification shall be delivered to the Trustee prior achieving compliance with the Code. Notwithstanding any other provision of this to its effective date. The Authority shall take all reasonable measures which are Resolution to the contrary, so long as it is necessary in order to maintain the exclusion permitted by the Act or otherwise by law, to enforce prompt payment to the Trustee of from gross income for Federal income tax purposes of interest on each of the Bonds, all amounts due under the County Guarantee Agreement, and shall at all times, to the the covenants contained in this Section 820 shall survive the payment or discharge extent permitted by the Act or otherwise by law, defend, enforce, preserve and protect thereof pursuant to Section 1301 of this Resolution. the rights, benefits and privileges of the Authority and of the Bondholders under or with respect to the County Guarantee Agreement. 2. The Authority hereby particularly covenants and agrees with the Holders of the Bonds which are issued as Tax-Exempt Obligations that (a) no part of the Section 818. Enforcement by County Against Municipalities. In proceeds which are derived from the sale of any Series of the Bonds which are issued the event a default under the Lease and/or Loan Agreement by any Municipality has as Tax-Exempt Obligations shall be used directly or indirectly to acquire any occurred for the nonpayment of Basic Rent on any Lease Payment Date and/or Basic "investment property", as such term is defined in the Code, or any securities or Loan Payment on any Loan Payment Date and the County has made payments to the obligations the acquisition of which would cause any such Bond to be an "arbitrage Trustee on behalf of the Municipality pursuant to the County Guarantee to cure any bond", as such term is defined in section 148 of the Code (an "Arbitrage Bond"), and deficiency in the Debt Service Requirement due and owing on the Bonds on the next (b) it will not take, and shall to the extent reasonably possible prohibit all other persons ensuing Interest Payment Date and Principal Installment Date, as applicable, then the from taking, any actions which, if taken, would cause any such Bond to be an "Arbitrage County shall be entitled under the Lease and/or Loan Agreement and this Resolution to Bond". enforce its rights against any Municipality, in addition to the rights of the Trustee and the Authority hereunder and under the Lease and/or Loan Agreement, including but not Section 821. Secondary Market Disclosure. The Authority has limited to, the County's right to pursue independently any action, suit or proceeding at determined that no financial or operating data concerning the Authority is material to law or in equity to collect from any defaulting Municipality all amounts sufficient to any decision to purchase, hold or sell the Bonds and the Authority will not provide any reimburse the County for County Guarantee Costs under the Lease, the Loan such information. Further, the Authority shall have no liability to the Holders of the Agreement, the Guarantee Agreement and this Resolution. Bonds or any other person with respect thereto. The Authority will require each Municipality in the Lease and/or Loan Agreement and the County in the Guarantee Agreement, if the same are determined by the Authority to be Obligated Persons as
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defined under the Rule (as hereinafter defined), to covenant and agree that each such ARTICLE IX entity will undertake all responsibilities for compliance with secondary market disclosure requirements pursuant to section (b) of Rule 15c2-12 (the "Rule") promulgated by the REMEDIES OF BONDHOLDERS Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended and supplemented, as described in the Continuing Disclosure Agreement Section 901. Events of Default. The following events shall constitute (the "Continuing Disclosure Agreement") to be executed by and between the Authority an Event of Default under this Resolution: and each Municipality and the County. Notwithstanding any other provision of this Bond Resolution, the failure of a Municipality or the County, as applicable, to comply with the (i) if default shall be made by the Authority in the provisions of the Continuing Disclosure Agreement shall not be considered an Event of due and punctual payment of the principal or Redemption Default hereunder and the Beneficial Owners of the Bonds (as defined in the Continuing Price of any Bond when and as the same shall become due Disclosure Agreement) may take such actions as set forth in the Continuing Disclosure and payable, whether at maturity or by call for redemption, or Agreement as may be necessary and appropriate to cause the Municipality or the otherwise, as applicable; or County, as applicable, to comply with its obligations set forth in the Lease and/or Loan (ii) if default shall be made by the Authority in the Agreement, the Guarantee Agreement and the Continuing Disclosure Agreement. due and punctual payment of any installment of interest on any Bond or the unsatisfied balance of any Sinking Fund Installment therefor, when and as such interest installment or Sinking Fund Installment shall become due and payable; or
(iii) if default shall be made by the County pursuant to the County Guarantee and Guarantee Agreement in the due and punctual payment of principal of or interest on the Bonds when such payment shall become due and payable, not less than two (2) Business Days before any Interest Payment Date and Principal Installment Date, as applicable, upon notice by the Trustee to the Authority and the County under Section 5 of the Guarantee Agreement and such default is not cured by such Interest Payment Date and Principal Installment Date, as applicable; or
(iv) if default shall be made by the Authority in the performance or observance of any other of the covenants, agreements or conditions on its part in this Resolution or in the Bonds contained, and such default shall continue for a period of sixty (60) days after written notice thereof to the Authority by the Trustee or to the Authority and to the Trustee by the Holders of not less than fifty-one percent (51%) in principal amount of the Bonds Outstanding; provided that, the failure of the Authority, the Municipality or the County to comply with the requirements of Section 821 hereof shall not constitute an Event of Default hereunder, however performance by an Obligated Person may be compelled by Bondholders pursuant to the provisions hereof and the Continuing Disclosure Agreement; or
(v) if the Authority shall commence a voluntary case or similar proceeding under any applicable bankruptcy,
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insolvency or other similar law now or hereafter in effect or under the Bonds or under this Resolution (other than the payment of principal and shall authorize, apply for or consent to the appointment of or interest due and payable solely by reason of such declaration) shall be made good or taking possession by a receiver, liquidator, assignee, be secured to the satisfaction of the Trustee or provision deemed by the Trustee to be trustee, custodian, sequestrator or similar official of its adequate shall be made therefor, then and in every such case the Holders of fifty-one properties and/or its rents, fees, charges or other revenues percent (51%) in principal amount of the Bonds Outstanding, by written notice to the therefrom, or shall make any general assignment for the Authority, the County and the Trustee, may rescind such declaration and annul such benefit of creditors, or shall make a written declaration or default in its entirety, or, if the Trustee shall have acted itself, and if there shall not have admission to the effect that it is unable to meet its debts as been theretofore delivered to the Trustee written direction to the contrary by the Holders such debts mature, or shall authorize or take any action in of fifty-one percent (51%) in principal amount of the Bonds Outstanding, then any such furtherance of any of the foregoing; or declaration shall ipso facto be deemed to be rescinded and any such default shall ipso facto be deemed to be annulled, but no such rescission or annulment shall extend to or (vi) if a court having jurisdiction in the premises affect any subsequent default or impair or exhaust any right or power consequent shall enter a decree or order for relief in respect of the thereon. Authority in an involuntary case or similar proceeding under any applicable bankruptcy, insolvency or other similar law Section 902. Accounting and Examination of Records After now or hereafter in effect, or a decree or order appointing a Default. 1. The Authority covenants that if an Event of Default shall have happened receiver, liquidator, assignee, custodian, trustee, and shall not have been remedied, the books of record, papers and accounts of the sequestrator or similar official for the Authority, of its Authority shall at all times be subject to the inspection and use of the Trustee and its properties and/or the rents, fees, charges or other revenues agents and attorneys and the Holders of the Bonds or their representatives duly therefor, or a decree or order for the dissolution, liquidation authorized in writing. or winding up of the Authority and its affairs or a decree or order finding or determining that the Authority is unable to 2. The Authority covenants that if an Event of Default shall have meet its debts as such debts mature, and any such decree happened and shall not have been remedied, the Authority, upon demand of the or order shall remain unstayed and in effect for a period of Trustee will account, as if it were the trustee of an express trust, for all Revenues and sixty (60) consecutive days; other moneys, securities and funds pledged or held under this Resolution for such period as shall be stated in such demand. then, so long as such Event of Default shall not have been remedied, unless the principal of all the Bonds of a particular Series shall have already become due and Section 903. Application of Pledged Property After Default. 1. payable, the Trustee by notice in writing to the Authority may, or upon receipt of a The Authority covenants that if an Event of Default shall happen and shall not have direction in writing from the Holders of not less than fifty-one percent (51%) in principal been remedied, the Authority, upon the demand of the Trustee, shall pay over or cause amount of the Bonds Outstanding, shall declare the principal of all the Bonds then to be paid over to the Trustee (a) forthwith, all Pledged Property then held by the Outstanding, and the interest accrued thereon, to be due and payable immediately, and Authority under this Resolution, and (b) all Revenues, if any, which are not paid directly upon any such declaration the same shall become and be immediately due and to the Trustee as promptly as practicable after receipt thereof. payable, anything in this Resolution or in any of the Bonds contained to the contrary notwithstanding. 2. During the continuance of an Event of Default, the Trustee shall apply the Pledged Property, including all moneys, securities, funds and Revenues The right of the Trustee or of the Holders of not less than fifty-one percent received by the Trustee pursuant to any right given or action taken under the provisions (51%) in principal amount of the Bonds to make any such declaration as aforesaid, of this Article together with all Funds held by the Trustee under this Resolution as however, is subject to the condition that if, at any time after such declaration, but before follows and in the following order: the Bonds shall have matured by their terms, all overdue installments of interest upon the Bonds, together with interest on such overdue installments of interest (to the extent (i) Expenses of Fiduciaries -- to the payment of permitted by law) and the reasonable and proper fees, charges, expenses and liabilities the reasonable and proper fees (including reasonable of the Trustee, and all other sums then payable by the Authority and the County under attorneys' fees), charges, expenses and liabilities of the this Resolution (except the principal of, and interest accrued since the next preceding Fiduciaries; Interest Payment Date on, the Bonds due and payable solely by virtue of such declaration) shall either be paid by or for the account of the Authority or the County or (ii) Principal and Interest -- to the payment of the provision satisfactory to the Trustee shall be made for such payment, and all defaults interest and principal then due on the Bonds, as follows:
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(a) unless the principal of all of the Bonds moneys, securities and funds deposited or pledged, or required by the terms of this shall have become or have been declared due and payable, Resolution to be deposited or pledged, with the Trustee) and thereupon the Authority, the County and the Trustee shall be restored, respectively, to their former positions and First: Interest -- To the payment to the rights under this Resolution. No such payment over to the Authority or the County by persons entitled thereto of all installments of interest then the Trustee nor such restoration of the Authority, the County and the Trustee to their due in the order of the maturity of such installments, together former positions and rights shall extend to or affect any subsequent default under this with accrued and unpaid interest on the Bonds, and, if the Resolution or impair any right consequent thereon. amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then Section 904. Proceedings Brought by Trustee. 1. If an Event of to the payment thereof ratably, according to the amounts Default shall happen and shall not have been remedied, then and in every such case, due thereon, to the persons entitled thereto, without any the Trustee, by its agents and attorneys, may proceed, and upon written request of the discrimination or preference; and Holders of not less than fifty-one percent (51%) in principal amount of the Bonds Outstanding shall proceed, to protect and enforce its rights and the rights of the Holders Second: Principal -- To the payment to of the Bonds under this Resolution forthwith by a suit or suits in equity or at law, the persons entitled thereto of the unpaid principal and whether for the specific performance of any covenant herein contained, or in aid of the Sinking Fund Installment of any Bonds which shall have execution of any power herein granted, or for an accounting against the Authority as if become due in the order of their due dates, and, if the the Authority were the trustee of an express trust, or in the enforcement of any other amount available shall not be sufficient to pay in full all the legal or equitable right as the Trustee, being advised by counsel, shall deem most Bonds due on any date, then to the payment thereof ratably, effectual to enforce any of its rights or to perform any of its duties under this Resolution. according to the amounts of principal due on such date, to the persons entitled thereto, without any discrimination or 2. All rights of action under this Resolution may be enforced by the preference; Trustee without the possession of any of the Bonds or the production thereof at the trial or other proceedings, and any such suit or proceedings instituted by the Trustee shall (b) If the principal of all of the Bonds shall be brought in its name. have become or have been declared due and payable, to the payment of the principal and interest then due and unpaid 3. The Holders of fifty-one percent (51%) in principal amount of the upon the Bonds without preference or priority of principal Bonds at the time Outstanding may direct the time, method and place of conducting any over interest or of interest over principal, or of any proceeding for any remedy available to the Trustee, or exercising any trust or power installment of interest over any other installment of interest, conferred upon the Trustee, provided that the Trustee shall have the right to decline to or of any Bond over any other Bond, ratably, according to follow any such direction if the Trustee shall be advised by counsel that the action or the amounts due respectively for principal and interest, to proceeding so directed may not lawfully be taken, or if the Trustee in good faith shall the persons entitled thereto without any discrimination or determine that the action or proceeding so directed would involve the Trustee in preference except as to any difference in the respective personal liability or be unjustly prejudicial to the Bondholders not parties to such rates of interest specified in the Bonds. direction.
3. Whenever all overdue installments of all Bonds, together with the 4. Upon commencing a suit in equity or upon other commencement of reasonable and proper charges, fees (including reasonable attorneys' fees), expenses judicial proceedings by the Trustee to enforce any right under this Resolution, the and liabilities of the Trustee, and all other sums payable by the Authority and the County Trustee shall be entitled to exercise any and all rights and powers conferred in this under this Resolution, including the principal of and accrued unpaid interest on all Resolution and provided to be exercised by the Trustee upon the occurrence of any Bonds which shall then be payable, by declaration or otherwise shall either be paid by Event of Default. or for the account of the Authority or the County, or provisions satisfactory to the Trustee shall be made for such payment, and all defaults under this Resolution or the 5. Regardless of the happening of an Event of Default, the Trustee Bonds shall be made good or secured to the satisfaction of the Trustee or provision shall have power to, but unless requested in writing by the Holders of fifty-one percent deemed by the Trustee to be adequate shall be made therefor, the Trustee shall pay (51%) in principal amount of the Bonds then Outstanding and furnished with adequate over to the Authority and to the County (to the extent of County Guarantee Costs security and indemnity satisfactory to the Trustee, shall be under no obligation to, incurred pursuant to the County Guarantee and the Guarantee Agreement) all moneys, institute and maintain such suits and proceedings as it may be advised shall be securities and funds then remaining unexpended in the hands of the Trustee (except necessary or expedient to prevent any impairment of the security under this Resolution
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by any acts which may be unlawful or in violation of this Resolution, and such suits and 2. Prior to the declaration of maturity of the Bonds as provided in proceedings as the Trustee may be advised shall be necessary or expedient to Section 901, the Holders of fifty-one percent (51%) in principal amount of the Bonds at preserve or protect its interests and the interests of the Bondholders. the time Outstanding, or their attorneys-in-fact duly authorized, may on behalf of the Holders of all of the Bonds waive any past default under this Resolution and its Section 905. Restrictions on Bondholder's Action. 1. No Holder consequences, except a default in the payment of interest on or principal of or premium of any Bond shall have any right to institute any suit, action or proceeding at law or in (if any) on any of the Bonds. No such waiver shall extend to any subsequent or other equity for the enforcement of any provision of this Resolution or the execution of any default or impair any right consequent thereon. trust under this Resolution or for any remedy under this Resolution, unless such Holder shall have previously given to the Trustee written notice of the happening of an Event of Section 908. Notice of Default. The Trustee shall promptly mail Default, as provided in this Article, and the Holders of at least fifty-one percent (51%) in written notice of the occurrence of any Event of Default of which the Trustee has actual principal amount of the Bonds then Outstanding shall have filed a written request with knowledge to each registered owner of Bonds then Outstanding at his address, if any, the Trustee, and shall have offered it reasonable opportunity, either to exercise the appearing upon the registry books of the Authority. The Trustee shall also give prompt powers granted in this Resolution or by the Act or by the laws of the State or to institute notice of the occurrence of a payment event of default of each Municipality or an Event such action, suit or proceeding in its own name, and unless such Holders shall have of Default of which the Trustee has actual knowledge to the Authority, the County and offered to the Trustee adequate security and indemnity satisfactory to the Trustee the Paying Agent. For purposes of this Section, the Trustee will be deemed to have against the costs, fees (including reasonable attorneys' fees), expenses and liabilities to actual knowledge only if an officer of the corporate trust department of the Trustee has be incurred therein or thereby, and the Trustee shall have refused to comply with such actual knowledge. request for a period of sixty (60) days after receipt by it of such notice, request and offer of indemnity, it being understood and intended that no one or more Holders of Bonds Section 909. Notice to Trustee to Exercise Remedies Under Lease shall have any right in any manner whatever by his or their action to affect, disturb or and/or Loan Agreement. The Authority covenants that if an Event of Default under prejudice the pledge created by this Resolution, or to enforce any right under this the Lease and/or Loan Agreement of any Municipality shall occur and be continuing, it Resolution, except in the manner therein provided; and that all proceedings at law or in will not exercise any of such remedies set forth in each Lease and/or Loan Agreement equity to enforce any provision of this Resolution shall be instituted, had and maintained without written consent of the Trustee and the County thereto, which consent shall not in the manner provided in this Resolution and for the equal benefit of all Holders of the be unreasonably withheld; provided, however, in the event the County is in default Outstanding Bonds, subject only to the provisions of Section 902. under its Lease and/or Loan Agreement, the County's consent shall not be required.
2. Nothing contained in this Resolution or in the Bonds shall affect or impair the obligation of the Authority, which is absolute and unconditional, to pay at the respective dates of maturity and places therein expressed, the principal of (and redemption premium, if any) and interest on the Bonds to the respective Holders thereof, or affect or impair the right of action, which is also absolute and unconditional, of any Holder to enforce such payment of his Bond.
Section 906. Remedies Not Exclusive. No remedy by the terms of this Resolution conferred upon or reserved to the Trustee or the Bondholders is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Resolution or existing at law or in equity or by statute on or after the date of execution and delivery of this Resolution.
Section 907. Effect of Waiver and Other Circumstances. 1. No delay or omission of the Trustee or any Bondholder to exercise any right or power arising upon the happening of an Event of Default shall impair any right or power or shall be construed to be a waiver of any such Event of Default or be an acquiescence therein; and every power and remedy given by this Article to the Trustee or to the Bondholders may be exercised from time to time and as often as may be deemed expedient by the Trustee or by the Bondholders.
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ARTICLE X provisions of paragraph 2 of this Section 1003, no Fiduciary shall be liable in connection with the performance of its duties hereunder except for its own gross negligence or CONCERNING THE FIDUCIARIES willful misconduct.
Section 1001. Trustee; Appointment and Acceptance of Duties. TD 2. The Trustee, prior to the occurrence of an Event of Default and Bank, National Association, Cherry Hill, New Jersey is hereby appointed Trustee under after the curing of all Events of Default which may have occurred, undertakes to perform this Resolution. The Trustee shall signify its acceptance of the duties and obligations such duties and only such duties as are specifically set forth in this Resolution. In case imposed upon it by this Resolution by executing and delivering to the Authority a written an Event of Default has occurred (which has not been cured) the Trustee shall exercise acceptance thereof, and by executing such acceptance the Trustee shall be deemed to such of the rights and powers vested in it by this Resolution, and use the same degree have accepted such duties and obligations with respect to all the Bonds thereafter to be of care and skill in their exercise, as a prudent man would exercise or use under the issued, but only, however, upon the terms and conditions set forth in this Resolution. circumstances in the conduct of his own affairs. Any provision of this Resolution relating to action taken or to be taken by the Trustee or to evidence upon which the Section 1002. Paying Agents; Appointment and Acceptance of Trustee may rely shall be subject to the provisions of this Section 1003 and Section Duties; Bond Registrar. 1. The Authority shall appoint one or more Paying Agents 1004 hereof. for the Bonds, and may at any time or from time to time appoint one or more other Paying Agents. All Paying Agents appointed shall have the qualifications set forth in Section 1004. Evidence on Which Fiduciaries May Act. 1. Each Section 1013 for a successor Paying Agent. The Trustee is hereby appointed Paying Fiduciary, upon receipt of any notice, resolution, requisition, request, consent, order, Agent. certificate, report, opinion, bond or other paper or document furnished to it pursuant to any provision of this Resolution, shall examine such instrument to determine whether it 2. Unless otherwise provided, the principal corporate trust offices of conforms to the requirements of this Resolution and shall be protected in acting upon the Paying Agents are designated as the respective offices or agencies of the Authority any such instrument believed by it in good faith to be genuine and to have been signed for the payment of the interest on and principal or Redemption Price of the Bonds. or presented by the proper party or parties. Each Fiduciary may consult with counsel, who may or may not be counsel to the Authority, and the opinion of such counsel shall 3. Each Paying Agent shall signify its acceptance of the duties and be full and complete authorization and protection in respect of any action taken or obligations imposed upon it by this Resolution by executing and delivering to the suffered by it under this Resolution in good faith and in accordance therewith. Authority and to the Trustee a written acceptance thereof. No Paying Agent shall be liable for the acts or omissions of any other Paying Agent. 2. Whenever any Fiduciary shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action under this 4. The Authority shall appoint a Bond Registrar, which shall be the Resolution, such matter (unless other evidence in respect thereof be therein specifically Trustee. The Bond Registrar shall have the duties and the responsibilities provided in prescribed) may be deemed to be conclusively proved and established by a certificate this Resolution. The Bond Registrar shall accept the responsibilities of a Bond of an Authorized Authority Representative, and such certificate shall be full warrant for Registrar hereunder with respect to all Bonds by executing a certificate to be delivered any action taken or suffered in good faith under the provisions of this Resolution upon to the Trustee and the Authority. the faith thereof; but in its discretion the Fiduciary may in lieu thereof accept other evidence of such fact or matter or may require such further or additional evidence as it Section 1003. Responsibilities of Fiduciaries. 1. The recitals of fact may deem reasonable. herein and in the Bonds contained shall be taken as the statements of the Authority and no Fiduciary assumes any responsibility for the correctness of the same. No Fiduciary 3. Except as otherwise expressly provided in this Resolution, any makes any representations as to the validity or sufficiency of this Resolution or of any request, order, notice or other direction required or permitted to be furnished pursuant to Bonds issued hereunder or as to the security afforded by this Resolution, and no any provision hereof by the Authority to any Fiduciary shall be sufficiently executed in Fiduciary shall incur any liability in respect thereof. The Trustee or Bond Registrar shall, the name of the Authority when signed by an Authorized Authority Representative. however, be responsible for its representations contained in its certificate of authentication on the Bonds. No Fiduciary shall be under any responsibility or duty with Section 1005. Compensation. The Authority shall pay to each respect to the application of any moneys paid by such Fiduciary in accordance with the Fiduciary from time to time reasonable compensation for all services rendered under provisions of this Resolution to the Authority or to any other Fiduciary. No Fiduciary this Resolution, and also all reasonable expenses, charges, counsel fees and other shall be under any obligation or duty to perform any act which would involve it in disbursements, including without limitation those of its attorneys, agents and expense or liability or to institute or defend any suit in respect thereof, or to advance any employees, incurred in and about the performance of their powers and duties under this of its own moneys, unless properly indemnified to its satisfaction. Subject to the Resolution, in accordance with the agreements made from time to time between the
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Authority and the Fiduciary, and subject to the rights of Bondholders hereunder, the Authorized Authority Representative, but if the Authority does not appoint a successor Trustee and each Paying Agent shall have a lien therefor on any and all funds at any Trustee within sixty (60) days, then by the Holders of fifty-one percent (51%) in principal time held by it under this Resolution. Subject to the provisions of Section 1003, the amount of the Bonds then Outstanding, excluding any Bonds held by or for the account Authority further agrees to indemnify and save each Fiduciary harmless against any of the Authority, by an instrument or concurrent instruments in writing signed and losses, liabilities, expenses and fees which it may incur in the exercise and performance acknowledged by such Bondholders or by their attorneys-in-fact duly authorized and of its powers and duties hereunder and which are not due to such Fiduciary's gross delivered to such successor Trustee, notification thereof being given to the Authority negligence or willful misconduct. The provisions of this Section shall survive the and the predecessor Trustee. After such appointment of a successor Trustee, the payment of the Bonds pursuant to Section 1301 hereof. Authority shall mail notice of any such appointment by it or by the Bondholders to the registered owners of the Bonds then Outstanding and to Moody's and Standard & Section 1006. Certain Permitted Acts. Any Fiduciary, individually or Poor's, if the Bonds are then rated by such rating agency or agencies. otherwise, may become the owner of any Bonds, with the same rights it would have if it were not a Fiduciary. To the extent permitted by law, any Fiduciary may act as 2. If no appointment of a successor Trustee shall be made pursuant to depository for, and permit any of its officers or directors to act as a member of, or in any the foregoing provisions of this Section within forty-five (45) days after the Trustee shall other capacity with respect to, any committee formed to protect the rights of have given to the Authority written notice as provided in Section 1007 hereof or after a Bondholders or to effect or aid in any reorganization growing out of the enforcement of vacancy in the office of the Trustee shall have occurred by reason of its inability to act, the Bonds or this Resolution, whether or not any such committee shall represent the removal, or for any other reason whatsoever, the Trustee or the Holder of any Bond Holders of a majority in principal amount of the Bonds then Outstanding. To the extent may apply to any court of competent jurisdiction to appoint a successor Trustee. Said permitted by law, any Fiduciary may provide banking, financial and similar services to court may thereupon, after such notice, if any, as such court may deem proper, appoint the Authority. a successor Trustee.
Section 1007. Resignation of Trustee. The Trustee may at any time 3. Any Trustee appointed under the provisions of this Section 1009 in resign and be discharged of the duties created by this Resolution by giving not less than succession to the Trustee shall be a bank or trust company organized under the laws of sixty (60) days prior written notice thereof to the Authority and the County, and mailing any state or a national banking association and shall have capital stock, surplus and notice thereof to the Holders of Bonds then Outstanding, specifying the date when such undivided earnings aggregating at least $100,000,000 if there be such a bank or trust resignation shall take effect, and such resignation shall take effect upon the day company or national banking association willing and able to accept the office on specified in such notice unless (i) previously a successor shall have been appointed by reasonable and customary terms and authorized by law to perform all the duties the Authority or the Bondholders as provided in Section 1009 hereof, in which event imposed upon it by this Resolution. such resignation shall take effect immediately on the appointment of such successor, or (ii) a successor shall not have been appointed by the Authority or the Bondholders as Section 1010. Transfer of Rights and Property to Successor provided in Section 1009 on such date, in which event such resignation shall not take Trustee. Any successor Trustee appointed under this Resolution shall execute, effect until a successor is appointed. acknowledge and deliver to its predecessor Trustee, and also to the Authority, an instrument accepting such appointment, and thereupon such successor Trustee, without Section 1008. Removal of the Trustee. The Trustee may be removed any further act, deed or conveyance, shall become fully vested with all moneys, estates, at any time with or without cause by an instrument or concurrent instruments in writing, properties, rights, powers, duties and obligations of such predecessor Trustee, with like filed with the Trustee, and signed by the Holders of fifty-one percent (51%) in principal effect as if originally named as Trustee; but the Trustee ceasing to act shall amount of the Bonds then Outstanding or their attorneys-in-fact duly authorized, nevertheless, on the written request of the Authority or of the successor Trustee, excluding any Bonds held by or for the account of the Authority. So long as no Event of execute, acknowledge and deliver such instrument of conveyance and further Default, or an event which, with notice or passage of time, or both, would become an assurance and do such other things as may reasonably be required for more fully and Event of Default, shall have occurred and be continuing, the Trustee may be removed at certainly vesting and confirming in such successor Trustee all the right, title and interest any time for just cause by a resolution of the Authority filed with the Trustee. of the predecessor Trustee in and to any property, rights, interests and estates held by it under this Resolution, and shall pay over, assign and deliver to the successor Trustee Section 1009. Appointment of Successor Trustee. 1. In case at any any money or other property subject to the trusts and conditions herein set forth. time the Trustee shall resign or shall be removed or shall become incapable of acting, Should any deed, conveyance or instrument in writing from the Authority be required by or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of such successor Trustee for more fully and certainly vesting in and confirming to such the Trustee, or of its property, shall be appointed, or if any public officer shall take successor Trustee any such estates, rights, powers and duties, any and all such deeds, charge or control of the Trustee, or of its property or affairs, a successor Trustee may conveyances and instruments in writing shall, on request, and so far as may be be appointed by the Authority by a duly executed written instrument signed by an authorized by law, be executed, acknowledged and delivered by the Authority. Any
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such successor Trustee shall promptly notify the Paying Agents and Bond Registrar of its fiduciary responsibilities, determines that there are conflicts, ambiguities or its appointment as Trustee. inconsistencies between the provisions of the County Guarantee Agreement and this Resolution, the Trustee may rely upon a written opinion from Bond Counsel addressed Section 1011. Merger or Consolidation. Any company into which any to the County and the Trustee directing the Trustee to adhere to the provisions of either Fiduciary may be merged or converted or with which it may be consolidated or any the County Guarantee Agreement or this Resolution. The Trustee shall be fully company resulting from any merger, conversion or consolidation to which it shall be a protected in the performance of its fiduciary responsibilities to the extent it acts in party or any company to which any Fiduciary may sell or transfer all or substantially all accordance with such opinion. of its corporate trust business, provided such company shall be a bank or trust company organized under the laws of any state of the United States or a national banking association and shall be authorized by law to perform all the duties imposed upon it by this Resolution, shall be the successor to such Fiduciary without the execution or filing of any paper or the performance of any further act.
Section 1012. Adoption of Authentication. In case any of the Bonds contemplated to be issued under this Resolution shall have been authenticated but not delivered, any successor Trustee may adopt the certificate of authentication of any predecessor Trustee so authenticating such Bonds and delivering such Bonds so authenticated; and in case any of the said Bonds shall not have been authenticated, any successor Trustee may authenticate such Bonds in the name of the predecessor Trustee, or in the name of the successor Trustee, and in all such cases such certificate shall have the full force which it is anywhere in said Bonds or in this Resolution provided that the certificate of the Trustee shall have.
Section 1013. Resignation or Removal of Paying Agent or Bond Registrar and Appointment of Successor. 1. Any Paying Agent or Bond Registrar may at any time resign and be discharged of the duties and obligations created by this Resolution by giving at least sixty (60) days prior written notice thereof to the Authority, the Trustee and the Paying Agent or Bond Registrar, as applicable. Any Paying Agent or Bond Registrar may be removed by the Authority at any time by an instrument filed with such Paying Agent or Bond Registrar and the Trustee and signed by an Authorized Authority Representative. Any successor Paying Agent or Bond Registrar shall be appointed by the Authority with the approval of the Trustee and shall be a commercial bank or trust company organized under the laws of any state of the United States or a national banking association, having capital stock, surplus and undivided earnings aggregating at least $100,000,000, and willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Resolution.
2. In the event of the resignation or removal of any Paying Agent or Bond Registrar, such Paying Agent or Bond Registrar shall pay over, assign and deliver any moneys held by it as Paying Agent or Bond Registrar to its successor, or if there be no successor, to the Trustee. In the event that for any reason there shall be a vacancy in the office of any Paying Agent or Bond Registrar, the Trustee shall act as such Paying Agent or Bond Registrar.
Section 1014. Conflict Between Provisions of Bond Resolution And County Guarantee Agreement. In the event the Trustee, in the performance of
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ARTICLE XI to the rights of the County and the Holders of the Bonds, as are necessary or appropriate to accomplish or recognize SUPPLEMENTAL RESOLUTIONS such certificated form Bonds, substitute for any such Fiduciary or custodian, provide for in, and amend any Section 1101. Supplemental Resolutions Effective Upon Filing provisions in, this Resolution relating to the giving of notice, With the Trustee. For any one or more of the following purposes and at any time or and specify and determine the matters and things relative to from time to time, a Supplemental Resolution of the Authority may be adopted, which, the issuance of such certificated form Bonds as are upon the filing with the Trustee and the County of a copy thereof certified by an appropriate or necessary; Authorized Authority Representative, shall be fully effective in accordance with its terms: (7) To confirm, as further assurance, any pledge (1) To close this Resolution against, or provide under, and the subjection to any lien or pledge created or to limitations and restrictions in addition to the limitations and be created by, this Resolution, of the Revenues or of any restrictions contained in this Resolution on, the other moneys, securities or funds; authentication and delivery of Bonds or the issuance of other evidences of indebtedness; (8) To confirm, as further assurance, any pledge or assignment under, and the subjection to any security (2) To add to the covenants and agreements of interest, pledge or assignment created or to be created by, the Authority in this Resolution, other covenants and this Resolution of the Pledged Property and to pledge any agreements to be observed by the Authority which are not additional revenues, moneys, securities or other contrary to or inconsistent with this Resolution, the County agreements; and Guarantee and the Guarantee Agreement, as theretofore in effect; (9) To modify any of the provisions of this Resolution in any other respect whatever, provided that (i) (3) To add to the limitations and restrictions in this such modification shall be, and be expressed to be, effective Resolution, other limitations and restrictions to be observed only after all Bonds of each Series Outstanding at the date of by the Authority which are not contrary to or inconsistent with the adoption of such Supplemental Resolution shall cease to this Resolution as theretofore in effect; be Outstanding, and (ii) such modification shall become effective prior to the authentication and delivery of the first (4) To authorize Refunding Bonds of a Series and, Bond authorized to be issued pursuant to this Resolution, in connection therewith, specify and determine, or delegate each Supplemental Resolution shall be specifically referred to an Authorized Authority Representative the power to to in the text of all Bonds authenticated and delivered after specify and determine, the matters and things referred to in the date of the adoption of such Supplemental Resolution Section 202 and Section 205(2) hereof and also any other and of Bonds issued in exchange therefor or in place matters and things relative to such Refunding Bonds which thereof. are not contrary to or inconsistent with this Resolution as theretofore in effect, or to amend, modify or rescind any such Section 1102. Supplemental Resolutions Effective Upon Consent authorization, specification or determination at any time prior of Trustee and the County. For any one or more of the following purposes and at any to the first authentication and delivery of such Refunding time or from time to time, a Supplemental Resolution may be adopted, which, upon (i) Bonds; the filing with the Trustee and the County of a copy thereof certified by an Authorized Authority Representative, and (ii) the filing with the Trustee, the County and the (5) Reserved; Authority of instruments in writing made by the Trustee and the County consenting thereto, shall be fully effective in accordance with its terms: (6) To authorize, in compliance with all applicable law, Bonds of each Series to be issued in the form of fully (1) To cure any ambiguity, supply any omission, or registered Bonds issued and held in certificated form on the cure or correct any defect or inconsistent provision in this books of the Authority, any Fiduciary or custodian appointed Resolution; or for that purpose by the Authority and, in connection therewith, make such additional changes herein, not adverse
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(2) To insert such provisions clarifying matters or ARTICLE XII questions arising under this Resolution as are necessary or desirable and are not contrary to or inconsistent with this AMENDMENTS Resolution and the County Guarantee as theretofore in effect. Section 1201. Mailing and Publication. 1. Any provision in this Article for the mailing of a notice or other matter to Bondholders by the Authority shall Section 1103. Supplemental Resolutions Effective With Consent of be fully complied with if it is mailed postage prepaid only (i) to each registered owner of the County and Bondholders. At any time or from time to time, a Supplemental Bonds then Outstanding at his address, if any, appearing upon the registry books of the Resolution may be adopted subject to consent by Bondholders and the County and in Authority, (ii) to the County, and (iii) to the Trustee. If the Bonds are rated by Moody's accordance with and subject to the provisions of Article XII, which Supplemental and Standard & Poor's, then the Authority shall give notice to the rating agency or Resolution, upon the filing with the Trustee and the County of a copy thereof certified by agencies that rated the Bonds of any material amendments to this Resolution. an Authorized Authority Representative and upon compliance with the provisions of said Article XII, shall become fully effective in accordance with its terms as provided in said 2. Any provision in this Article for publication of a notice or other Article XII upon the filing with the Trustee of a copy thereof certified by an Authorized matter shall require the publication thereof only in an Authorized Newspaper of the Authority Representative and upon compliance with the provisions of such Article XII. Authority.
Section 1104. General Provisions. 1. This Resolution shall not be Section 1202. Powers of Amendment. Any modification or modified or amended in any respect except as provided in and in accordance with and amendment of this Resolution and of the rights and obligations of the Authority and of subject to the provisions of this Article XI and Article XII hereof. Nothing contained in the Holders of the Bonds hereunder in any particular, may be made by a Supplemental this Article XI or Article XII shall affect or limit the right or obligation of the Authority to Resolution with the written consent, given as provided in Section 1203, of the County adopt, make, do, execute, acknowledge or deliver any resolution, act or other and the Holders of at least fifty-one percent (51%) in principal amount of the Bonds instrument pursuant to the provisions of Section 804 or the right or obligation of the Outstanding at the time such consent is given; provided, however, that if such Authority to execute and deliver to any Fiduciary any instrument which elsewhere in this modification or amendment will, by its terms, not take effect so long as any Bonds of Resolution it is provided shall be delivered to said Fiduciary. any specified maturity remain Outstanding, the consent of the Holders of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the 2. Any Supplemental Resolution referred to and permitted or purpose of any calculation of Outstanding Bonds under this Section. No such authorized by Sections 1101 and 1102 herein may be adopted by the Authority without modification or amendment shall permit a change in the maturity of the principal of any the consent of any of the Bondholders, but shall become effective only on the Outstanding Bond or of any installment of interest thereon or a reduction in the principal conditions, to the extent and at the time provided in said Sections, respectively. The amount or in the rate of interest thereon without the consent of the County and the copy of every Supplemental Resolution when filed with the Trustee shall be Holder of such Bond, or shall reduce the percentages or otherwise affect the classes of accompanied by an opinion of Bond Counsel stating that such Supplemental Resolution Bonds the consent of the County and the Holders of which is required to effect any such has been duly and lawfully adopted in accordance with the provisions of this Resolution modification or amendment, or shall change or modify any of the rights or obligations of and the County Guarantee, is authorized or permitted by this Resolution and the County any Fiduciary without its written assent thereto. The Trustee may in its discretion Guarantee, and is valid and binding upon the Authority and enforceable in accordance determine whether or not, in accordance with the foregoing powers of amendment, with its terms subject to any applicable bankruptcy, insolvency or other laws affecting Bonds of any particular maturity would be affected by any modification or amendment of creditors' rights generally. this Resolution and any such determination shall be binding and conclusive on the Authority and all Holders of Bonds. 3. The Trustee is hereby authorized to accept the delivery of a certified copy of any Supplemental Resolution referred to and permitted or authorized Section 1203. Consent of County and Bondholders. The Authority by Sections 1101, 1102 or 1103 hereof and to make all further agreements and may at any time adopt a Supplemental Resolution making a modification or amendment stipulations which may be therein contained, and the Trustee, in taking such action, permitted by the provisions of Section 1202 to take effect when and as provided in this shall be fully protected in relying on an opinion of Bond Counsel that such Supplemental Section 1203. A copy of such Supplemental Resolution (or brief summary thereof or Resolution is authorized or permitted by the provisions of this Resolution. reference thereto approved by the Trustee), together with a request to Bondholders and the County for their consent thereto in form satisfactory to the Trustee, shall be mailed 4. No Supplemental Resolution shall change or modify any of the by the Authority to the County and Bondholders (but failure to mail such copy and rights or obligations of any Fiduciary without its written assent thereto. request shall not affect the validity of the Supplemental Resolution when consented to as in this Section 1203 provided). Such Supplemental Resolution shall not be effective
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unless and until (i) there shall have been filed with the Trustee (a) the written consents jurisdiction setting aside such Supplemental Resolution in a legal action or equitable of the County and Holders of the percentages of Outstanding Bonds specified in Section proceeding for such purpose commenced within such forty (40) day period; provided, 1202 hereof and (b) an opinion of Bond Counsel stating that such Supplemental however, that the Trustee and the Authority during such forty (40) day period and any Resolution has been duly and lawfully adopted and filed by the Authority in accordance such further period during which any such action or proceeding may be binding shall be with the provisions of this Resolution, is authorized or permitted by this Resolution, and entitled in their absolute discretion to take such action, or to refrain from taking such is valid and binding upon the Authority and enforceable in accordance with its terms, action, with respect to such Supplemental Resolution as they may deem expedient. subject to any applicable bankruptcy, insolvency or other laws affecting creditors' rights generally, and (ii) a notice shall have been given as hereinafter in this Section 1203 Section 1204. Modifications by Unanimous Consent. The terms provided. The consent of the County shall be effective if given by written instrument and provisions of this Resolution and the rights and obligations of the Authority, the and the consent of the Holders of the Bonds shall be effective only if accompanied by County and of the Holders of the Bonds thereunder may be modified or amended in any proof of the holding, at the date of such consent, of the Bonds with respect to which respect upon the adoption and filing by the Authority of a Supplemental Resolution and such consent is given, which proof shall be such as is permitted by Section 1303. A the consents of the County and the Holders of all of the Bonds then Outstanding, such certificate or certificates executed by the Trustee and filed with the Authority and the consents to be given as provided in Section 1203, except that no notice to Bondholders County stating that it has examined such proof and that such proof is sufficient in shall be required; provided, however, that no such modification or amendment shall accordance with Section 1303 shall be conclusive that the consents have been given by change or modify any of the rights or obligations of any Fiduciary without the filing with the Holders of the Bonds described in such certificate or certificates of the Trustee. Any the Trustee of the written assent thereto of such Fiduciary, of the County and of the such consent shall be binding upon the County and the Holder of the Bonds giving such Bondholders. consent and, anything in Section 1303 to the contrary notwithstanding, upon any subsequent Holder of such Bonds and of any Bonds issued in exchange therefor Section 1205. Exclusion of Bonds. Bonds owned or held by or for (whether or not such subsequent Holder thereof has notice thereof) unless such the account of the Authority shall not be deemed Outstanding for the purpose of consent is revoked in writing by the County or the Holder of such Bonds giving such consent or other action or any calculation of Outstanding Bonds provided for in this consent or a subsequent Holder thereof by filing with the Trustee, prior to the time when Article XII, and the Authority shall not be entitled with respect to such Bonds to give any the written statement of the Trustee hereinafter in this Section 1203 provided for is filed, consent or take any other action provided for in this Article. At the time of any consent such revocation and, if such Bonds are transferable by delivery, proof that such Bonds or other action taken under this Article, the Authority shall furnish the Trustee with a are held by the signer, of such revocation in the manner permitted by this Section 1203. certificate of an Authorized Authority Representative, upon which the Trustee may rely, The fact that a consent has not been revoked may likewise be proved by a certificate of describing all Bonds so to be excluded. the Trustee filed with the Authority to the effect that no revocation thereof is on file with the Trustee. At any time after the County and the Holders of the required percentages Section 1206. Notation on Bonds. Bonds authenticated and of Bonds shall have filed their consents to the Supplemental Resolution, the Trustee delivered after the effective date of any action taken as in Article XI or this Article XII shall make and file with the Authority a written statement that the County and Holders of provided may, and, if the Trustee so determines, upon advice of counsel, shall, bear a such required percentages of Bonds have filed such consents. Such written statements notation by endorsement or otherwise in form approved by the Authority and the shall be conclusive that such consents have been so filed. At any time thereafter, Trustee as to such action, and in that case upon demand of the Holder of any Bond notice stating in substance that the Supplemental Resolution (which may be referred to Outstanding at such effective date and presentation of his Bond for the purpose at the as a Supplemental Resolution adopted by the Authority on a stated date, a copy of principal corporate trust office of the Trustee or upon any transfer or exchange of any which is on file with the Trustee) has been consented to by the County and Holders of Bond Outstanding at such effective date, suitable notation shall be made on such Bond the required percentages of Bonds and will be effective as provided in this Section or upon any Bond issued upon any such transfer or exchange by the Trustee as to any 1203, may be given to Bondholders by the Authority by mailing such notice to such action. If the Authority or the Trustee shall so determine, new Bonds so modified Bondholders (but failure to mail such notice shall not prevent such Supplemental as in the opinion of the Trustee and the Authority to conform to such action shall be Resolution from becoming effective and binding as in this Section 1203 provided). The prepared, authenticated and delivered, and upon demand of the Holder of any Bond Authority shall file with the Trustee proof of the mailing thereof. A record, consisting of then Outstanding shall be exchanged, without cost to such Bondholder, for Bonds of the the certificates or statements required or permitted by this Section 1203 to be made by same maturity then Outstanding, upon surrender of such Bonds. the Trustee, shall be proof of the matters therein stated. Such Supplemental Resolution making such amendment or modification shall be deemed conclusively binding upon the Authority, the County, the Trustee and the Holders of all Bonds at the expiration of forty (40) days after the filing with the Trustee of the proof of the mailing of such last mentioned notice, except in the event of a final decree of a court of competent
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ARTICLE XIII interest due and to become due on said Bonds on or prior to the redemption date or maturity date thereof, as the case may be and (b) in the event said Bonds are not by MISCELLANEOUS their terms subject to redemption within the next succeeding sixty (60) days, the Authority shall have given the Trustee, in form satisfactory to it, instructions to mail as Section 1301. Defeasance. 1. If, subject to the provisions set forth in provided in Article IV hereof a notice to the Holders of such Bonds that the deposit the next succeeding sentence, the Authority shall pay or cause to be paid, or there shall required by (a) above has been made with the Trustee and that said Bonds are deemed otherwise be paid, to or for the account of the Holders of all Bonds the principal, to have been paid in accordance with this Section 1301 and stating such maturity or redemption premium, if applicable, and interest due or to become due thereon, at the redemption date upon which moneys are expected, subject to the provisions of times and in the manner stipulated in the Bonds and in this Resolution, then the pledge paragraph 6 of this Section 1301, to be available for the payment of the principal or of the Pledged Property, any Revenues, and other moneys and securities pledged Redemption Price, if applicable, on said Bonds, and (c) in case any of said Bonds are to under this Resolution and all covenants, agreements and other obligations of the be redeemed on any date prior to their maturity, the Authority shall have given to the Authority to the Bondholders and the provisions of the County Guarantee, shall Trustee, in form satisfactory to it, instructions to mail as provided in Article IV hereof thereupon cease, terminate and become void and be discharged and satisfied. In such notice of redemption of such Bonds (other than Bonds which have been purchased by event, the Trustee shall cause an accounting for such period or periods as shall be the Trustee at the direction of the Authority or purchased or otherwise acquired by the requested by the Authority to be prepared and filed with the Authority and, upon the Authority and delivered to the Trustee as hereinafter provided prior to the mailing of request of the Authority, shall execute and deliver to the Authority all such instruments such notice of redemption) on said date. Any notice of redemption mailed pursuant to as may be desirable to evidence such discharge and satisfaction, and, after the the preceding sentence with respect to Bonds which constitute less than all of the Fiduciaries have paid all amounts due and payable to the County for County Guarantee Outstanding Bonds of any maturity within a Series shall specify the letter and number or Costs, the Fiduciaries shall pay over or deliver to the Authority the Funds and Accounts other distinguishing mark of each such Bond. For purposes of this Section 1301 only, and all moneys or securities held by them pursuant to this Resolution which are not the term Investment Securities shall mean only those Investment Securities described in required for the payment of principal, redemption premium, if any, and interest on Bonds clause a(1) of the definition of Investment Securities contained in Section 101 hereof not theretofore surrendered for such payment or redemption. If the Authority shall pay unless the Authority shall have received written confirmation from Moody's, if the Bonds or cause to be paid, or there shall otherwise be paid, to the Holders of the Outstanding are then rated by Moody's and Standard & Poor's, if the Bonds are then rated by Bonds of a particular maturity or particular Bonds within a maturity, the principal, Standard & Poor's, that defeasance with Investment Securities other than those redemption premium, if any, and interest due or to become due thereon, at the times described in clause a(1) of the definition in Section 101 hereof will result in the Bonds and in the manner stipulated therein and in this Resolution, such Bonds shall cease to being rated in the highest investment grade or category of each such rating agency. be entitled to any lien, benefit or security under this Resolution and the County The Trustee shall, if so directed by the Authority prior to the maturity date of Bonds Guarantee, and all covenants, agreements and obligations of the Authority to the deemed to have been paid in accordance with this Section 1301 which are not to be Holders of such Bonds and the County shall thereupon cease, terminate and become redeemed prior to their maturity date or prior to the maturity date of any Bonds deemed void and be discharged and satisfied. to have been paid in accordance with this Section 1301 which are to be redeemed on any date prior to their maturity, apply moneys deposited with the Trustee in respect of 2. Principal and/or interest installments for the payment or redemption such Bonds and redeem or sell Investment Securities so deposited with the Trustee and of which moneys or Investment Securities shall have been set aside and shall be held in apply the proceeds thereof to the purchase of such Bonds so purchased; provided, trust by the Trustee or Paying Agents (through deposit by the Authority of funds for such however, that the moneys and Investment Securities remaining on deposit with the payment or redemption or otherwise) at the maturity date thereof shall be deemed to Trustee after the purchase and cancellation of such Bonds shall be sufficient (as verified have been paid within the meaning and with the effect expressed in paragraph 1 of this by an independent certified public accountant as stated in a verification report Section. Subject to the provisions of paragraph 3 through paragraph 5 of this Section, addressed to the Authority, the County and the Trustee) to pay when due the Principal any Outstanding Bonds shall, prior to the maturity date thereof, be deemed to have Installment, redemption premium, if any, and interest due or to become due on all been paid within the meaning and with the effect expressed in paragraph 1 of this Bonds, in respect of which such moneys and Investment Securities are being held by Section if (a) there shall have been deposited with the Trustee either moneys in an the Trustee on or prior to the redemption date or maturity date thereof, as the case may amount which shall be sufficient, or Investment Securities (including any Investment be. If, at any time prior to the maturity date of Bonds deemed to have been paid in Securities issued or held in book-entry form on the books of the Department of the accordance with this Section 1301 which are not to be redeemed prior to their maturity Treasury of the United States) the principal of and the interest on which when due will date or Bonds which are to be redeemed prior to their maturity date, the Authority shall provide moneys which, together with the moneys, if any, deposited with the Trustee at purchase or otherwise acquire any such Bonds and deliver such Bonds to the Trustee the same time, shall be sufficient (as shall be verified by an independent certified public prior to their maturity date, the Trustee shall immediately cancel all such Bonds so accountant as stated in a verification report addressed to the Authority, the County and delivered; such delivery of Bonds to the Trustee shall be accompanied by directions the Trustee) to pay when due the principal or Redemption Price, if applicable, and
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from the Authority to the Trustee as to the manner in which such Bonds are to be redemption prior to their maturity other than at the option of the Holder thereof or as to applied against the obligation of the Trustee to pay Bonds deemed paid in accordance which an irrevocable notice of redemption of such securities on a specified redemption with this Section 1301. The directions given by the Authority to the Trustee referred to date has been given and such securities are not otherwise subject to redemption prior in the preceding sentences shall also specify the portion, if any, of such Bonds so to such specified date other than at the option of the Holder thereof, or (z) upon purchased or delivered and canceled to be applied against the obligation of the Trustee compliance with the provisions of paragraph 3 of this Section 1301, such securities as to pay Bonds deemed paid in accordance with this Section 1301 upon their maturity are described in this paragraph 1301(2) which are subject to redemption prior to date or dates and the portion, if any, of such Bonds so purchased or delivered and maturity at the option of the issuer thereof on a specified date or dates. canceled to be applied against the obligation of the Trustee to redeem Bonds deemed paid in accordance with this Section 1301 on any date or dates prior to their maturity. In 3. Investment Securities described in clause (z) of paragraph 2 of this the event that on any date as a result of any purchases, acquisitions and cancellations Section 1301 may be included in the Investment Securities deposited with the Trustee of Bonds as provided in this Section 1301 such amount is in excess (as verified by an in order to satisfy the requirements of clause (a) of paragraph 2 of this Section 1301 independent certified public accountant as stated in a verification report addressed to only if the determination as to whether the moneys and Investment Securities to be the Authority, the County and the Trustee) of the total amount which would have been deposited with the Trustee in order to satisfy the requirements of such clause (a) would required to be deposited with the Trustee on such date in respect of the remaining be sufficient to pay when due either on the maturity date or the redemption date thereof, Bonds in order to satisfy subclause (a) of this paragraph 2 of Section 1301, the Trustee the principal, redemption premium, if any, and interest on the Bonds which will be shall, after having paid all amounts (to the extent available) due and owing to the deemed to have been paid as provided in paragraph 2 of this Section 1301 is made County under the County Guarantee Agreement, if requested by the Authority, pay the both (i) on the assumption that the Investment Securities described in clause (z) were amount of such excess to the Authority free and clear of any trust, lien, pledge or not redeemed at the option of the issuer prior to the maturity date thereof and (ii) on the assignment securing said Bonds or otherwise existing under this Resolution. Except as assumption that such Investment Securities would be redeemed by the issuer thereof at otherwise provided in this paragraph 2 of Section 1301 and in paragraph 3 through its option on each date on which such option could be exercised, that as of such date or paragraph 5 of this Section 1301, neither Investment Securities nor moneys deposited dates interest ceased to accrue on such Investment Securities and that the proceeds of with the Trustee pursuant to this Section nor principal or interest payments on any such such redemption would not be reinvested by the Trustee. Investment Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal, redemption premium, if any, and 4. In the event after compliance with the provisions of paragraph 3 of interest on said Bonds; provided that any cash received from such principal or interest this Section 1301 the Investment Securities described in clause (z) of paragraph 2 of payments on such Investment Securities deposited with the Trustee, (A) to the extent this Section 1301 are included in the Investment Securities deposited with the Trustee such cash will not be required (as verified by an independent certified public accountant in order to satisfy the requirements of clause (a) of paragraph 2 of this Section 1301 and as stated in a verification report addressed to the Authority, the County and the Trustee) any such Investment Securities are actually redeemed by the issuer thereof prior to their at any time for such purpose after having paid all amounts (to the extent available) due maturity date, then the Trustee at the direction of the Authority, provided that the and owing to the County under the County Guarantee Agreement, shall be paid over to aggregate of the moneys and Investment Securities to be held by the Trustee, taking the Authority as received by the Trustee, free and clear of any trust, lien or pledge into consideration any changes in redemption dates or instructions to give notice of securing said Bonds or otherwise existing under this Resolution, and (B) to the extent redemption given to the Trustee by the Authority in accordance with paragraph 3 of this such cash will be required for such purpose at a later date, shall, to the extent Section 1301, shall at all times be sufficient (as verified by an independent certified practicable, be reinvested in Investment Securities maturing at times and in amounts public accountant as stated in a verification report addressed to the Authority, the sufficient (as verified by an independent certified public accountant as stated in a County and the Trustee) to satisfy the requirements of clause (b) of paragraph 2 of this verification report addressed to the Authority, the County and the Trustee) to pay when Section 1301, shall reinvest the proceeds of such redemption in Investment Securities. due the principal, redemption premium, if any, and interest to become due on said Bonds on or prior to such maturity date thereof, as the case may be, and interest 5. In the event that after compliance with the provisions of paragraph earned from such reinvestment after having paid all amounts (to the extent available) 4 of Section 1301 the Investment Securities described in clause (z) of paragraph 2 of due and owing to the County under the County Guarantee Agreement shall be paid over Section 1301 are included in the Investment Securities deposited with the Trustee in to the Authority, as received by the Trustee, free and clear of any trust, lien, pledge or order to satisfy the requirements of clause (a) of paragraph 2 of Section 1301, then any assignment securing said Bonds or otherwise existing under this Resolution. For the notice of defeasance and notice of redemption to be mailed by the Trustee and any set purposes of this Section, Investment Securities shall mean and include only (x) such of instructions relating to a notice of defeasance and notice of redemption given to the securities as are described in this paragraph 1301(2) which shall not be subject to Trustee may provide, at the option of the Authority, that any redemption date or dates in redemption prior to their maturity other than at the option of the Holder thereof, (y) such respect of all or any portion of the Bonds to be redeemed on such date or dates may at securities as are described in this paragraph 1301(2) which shall not be subject to the option of the Authority be changed to any other permissible redemption date or dates and that redemption dates may be established for any Bonds deemed to have
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been paid in accordance with this Section 1301 upon their maturity date or dates at any Fiduciaries have unreimbursed expenses, such moneys shall be paid to each such time prior to the actual mailing of any applicable notice of redemption in the event that Fiduciary by the Trustee, free and clear of the lien and pledge of this Resolution to the all or any portion of any Investment Securities described in clause (z) of paragraph 2 of extent required to reimburse each Fiduciary for such expenses, and if thereafter there Section 1301 have been called for redemption pursuant to an irrevocable notice of are any unclaimed moneys remaining in the Funds and Accounts, then to the Authority. redemption or have been redeemed by the issuer thereof prior to the maturity date thereof. No such change of redemption date or dates or establishment of redemption Section 1303. Evidence of Signatures of Bondholders and date or dates may be made unless taking into account that on such changed Ownership of Bonds. 1. Any request, consent, revocation of consent or other redemption date or dates or newly established redemption date or dates the moneys instrument which this Resolution may require or permit to be signed and executed by and Investment Securities on deposit with the Trustee including any Investment the Bondholders may be signed or executed in one or more instruments of similar tenor, Securities or redemption proceeds in accordance with paragraph 5 of Section 1301 and shall be signed or executed by such Bondholders in person or by their attorneys pursuant to clause (a) of paragraph 2 of Section 1301 would be sufficient to pay when appointed in writing. Proof of (i) the execution of any such instrument, or of an due the principal and Redemption Price, if applicable, and interest on all Bonds deemed instrument appointing any such attorney, or (ii) the holding by any person of the Bonds to have been paid in accordance with paragraph 2 of Section 1301 which have not as shall be sufficient for any purpose of this Resolution (except as otherwise therein yet been paid. expressly provided) if made in the following manner, or in any other manner satisfactory to the Trustee, which may nevertheless in its discretion require further or other proof in 6. If the Bonds are rated by Moody's and Standard & Poor's, then the cases where it deems the same desirable: Authority shall give notice to the rating agency or agencies that rated the Bonds of any defeasance of all or any of the Bonds. (1) The fact and date of the execution by any Bondholder or his attorney of such instruments may be Section 1302. Unclaimed Funds. 1. Anything in this Bond Resolution proved by a guarantee of the signature thereon by a bank or to the contrary notwithstanding, but subject to any provision of State or Federal law to trust company or by the certificate of any notary public or the contrary, any moneys held by a Fiduciary in trust for the payment and discharge of other officer authorized to take acknowledgments of deeds, any of the Bonds which remain unclaimed for five (5) years (or such other time period that the person signing such request or other instrument as may be set forth in N.J.S.A. 46:30B-37) after the date when such Bonds have acknowledged to him the execution thereof, or by an affidavit become due and payable, at their stated maturity dates or by call for earlier redemption, of a witness of such execution, duly sworn to before such shall be presumed to be abandoned pursuant to the provisions of N.J.S.A. 46:30B-37 notary public or other officer. Where such execution is by an and shall be paid by the Fiduciary to the State Treasurer in accordance with the officer of a corporation or association or a member of a provisions of N.J.S.A. 46:30B-1 et seq. free and clear of the lien of this Bond partnership, on behalf of such corporation, association or Resolution, and the Fiduciary shall thereupon be released and discharged with respect partnership, such signature, guarantee, certificate or affidavit thereto and the Bondholders shall look only to the State Treasurer for the payment of shall also constitute sufficient proof of his authority. such Bonds, all in accordance with the provisions of N.J.S.A. 46:30B-1 et seq.; provided, however, that before being required to make any such payment to the State (2) The amount of Bonds transferable by delivery Treasurer, the Fiduciary shall, at the expense of the Authority, cause to be published at held by any person executing any instrument as a least twice, at an interval of not less than seven (7) days between publications, in an Bondholder, the date of his holding such Bonds, and the Authorized Newspaper, a notice that said moneys remain unclaimed and that, after a numbers and other identification thereof, may be proved by a date named in said notice, which date shall be not less than thirty (30) days after the certificate, which need not be acknowledged or verified, in date of the first publication of such notice, the balance of such moneys then unclaimed form satisfactory to the Trustee, executed by the Trustee or shall be forwarded to the State Treasurer. by a member of a financial firm or by an officer of a bank, trust company, insurance company, or financial corporation 2. In the event the County pays money to the Trustee pursuant to the or other depositary wherever situated, showing at the date County Guarantee Agreement to cure a deficiency in a Municipal Account in the Debt therein mentioned that such person exhibited to such Service Fund on behalf of a Municipality and the County remains unreimbursed for the member or officer or had on deposit with such depositary the County Guarantee Costs associated with the making of such payment, then to such Bonds described in such certificate. Such certificate may be extent, any unclaimed moneys remaining in the Funds and Accounts (but not including given by a member of a financial firm or by an officer of any any sums which are paid to the State Treasurer pursuant to Section 1302(1) hereof) bank, trust company, insurance company or financial shall be paid to the County and further, after such payment has been made to the corporation or depositary with respect to Bonds owned by it, County, to the extent any moneys are remaining in such Funds and Accounts and the if acceptable to the Trustee. In addition to the foregoing
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provisions, the Trustee may from time to time make such manner herein provided, then such publication in lieu thereof as shall be made with the reasonable regulations as it may deem advisable permitting approval of the Authority shall constitute a sufficient publication of such notice. other proof of holding of Bonds transferable by delivery. Section 1309. Severability of Invalid Provisions. If any one or more 2. The ownership of Bonds registered otherwise than to bearer and of the covenants or agreements provided in this Resolution on the part of the Authority the amount, numbers and other identification, and date of holding the same shall be or any Fiduciary to be performed should be contrary to law, then such covenant or provided by the registry books. covenants or agreement or agreements shall be deemed severable from the remaining covenants and agreements, and shall in no way affect the validity of the other provisions 3. Any request or consent by the owner of any Bond shall bind all of this Resolution. future owners of such Bond in respect of anything done or suffered to be done by the Authority or any Fiduciary in accordance therewith. Section 1310. Holidays. Except with respect to the computation of a Record Date, if the date for making any payment or the last date for performance of any Section 1304. Moneys Held for Particular Bonds. The amounts held act or the exercising of any right, as provided in this Resolution, shall be a legal holiday by any Fiduciary for the payment of the interest or principal due on any date with or a day on which banking institutions in the municipality in which is located the principal respect to particular Series of Bonds or for particular Bonds within such Series of Bonds corporate trust office of the Trustee or the operational office of the Authority are shall, on and after such date and pending such payment, be set aside on its books and authorized by law to remain closed, such payment may be made or act performed or held in trust by it for the Holders of the Bonds entitled thereto. right exercised on the next succeeding day not a legal holiday or a day on which such banking institutions are authorized by law to remain closed, with the same force and Section 1305. Preservation and Inspection of Documents. All effect as if done on the nominal date provided in this Resolution, and no interest shall documents received by any Fiduciary under the provisions of this Resolution shall be accrue for the period after such nominal date. retained in its possession for a period of seven (7) years and shall be subject at all reasonable times to the inspection of the Authority, the County, any other Fiduciary and Section 1311. Notices and Demands. All notices, demands or other any Bondholder and their agents and their representatives, any of whom may make communications provided for in this Resolution shall be in writing and shall be by copies thereof. facsimile transmission (with written confirmation of receipt) followed by hard copy sent by personal delivery or certified or registered mail or by recognized overnight delivery, Section 1306. Parties Interest Herein. Nothing in this Resolution to (i) each Municipality as set forth in a certificate delivered by the Authority to the expressed or implied is intended or shall be construed to confer upon, or to give to, any Trustee upon delivery of the Bonds, (ii) the Authority at 101 Interchange Plaza, person or corporation, other than the Authority, the County, the Fiduciaries and the Cranbury, New Jersey 08512, Attn: Chairman, (iii) the County at the Middlesex County Holders of the Bonds, any right, remedy or claim under or by reason of this Resolution Administration Building, John F. Kennedy Square, 75 Bayard Street, New Brunswick, or any covenant, condition or stipulation thereof; and all the covenants, stipulations, New Jersey 08901, Attn: Chief Financial Officer of the County and Clerk of the Board of promises and agreements in this Resolution contained by and on behalf of the Authority Chosen Freeholders, (iv) the Trustee at 1006 Astoria Boulevard, Cherry Hill, New shall be for the sole and exclusive benefit of the Authority, the County, the Fiduciaries Jersey, 08034, Attn: Institutional Trust Department/Kelly M. Bekas, (v) Bond Counsel to and the Holders of the Bonds. the Authority, Wilentz, Goldman & Spitzer, P.A., 90 Woodbridge Center Drive, Woodbridge, New Jersey, 07095 Attn: Anthony J. Pannella, Esq., and (vi) Counsel to Section 1307. No Recourse on the Bonds. No recourse shall be had the County, Thomas F. Kelso, Esq., County Counsel, Middlesex County Administration for the payment of the principal of or interest on the Bonds or for any claim based Building, John F. Kennedy Square, 75 Bayard Street, New Brunswick, New Jersey thereon or on this Resolution against any member or officer of the Authority, the County 08901, or to such other representatives or addresses as the Authority, the Municipality, or any person executing the Bonds. the County or the Trustee may from time to time designate by written notice to the parties hereto or beneficiaries hereof. Section 1308. Publication of Notice; Suspension of Publication. 1. Any publication to be made under the provisions of this Resolution in successive weeks Section 1312. Headings. The Article and Section headings in this or on successive dates may be made in each instance upon any Business Day of the Resolution are inserted for convenience of reference only and are not intended to define week and need not be made in the same Authorized Newspaper for any or all of the or limit the scope of any provision of this Resolution. successive publications but may be made in a different Authorized Newspaper. Section 1313. Governing Law. This Resolution shall be governed by 2. If, because of the temporary or permanent suspension of the and construed in accordance with the laws of the State of New Jersey. publication or general circulation of any Authorized Newspaper or for any other reason, it is impossible or impractical to publish any notice pursuant to this Resolution in the
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Section 1314. Separate Financings. Nothing contained in this ARTICLE XIV Resolution shall be construed to prevent the Authority from acquiring, constructing or financing through the issuance of its bonds, notes, or other evidences of indebtedness BOND FORMS AND EFFECTIVE DATE any other public facilities or from securing such bonds, notes or other evidences of indebtedness by a mortgage of such public facilities so financed or by a pledge of, or Section 1401. Form of Bonds. Subject to the provisions of this other security interest in, the revenues thereunder or any lease or other agreement with Resolution, the form of each series of Bonds shall be substantially as follows: respect thereto or any revenues derived from such lease or other agreement; provided that such bonds, notes, or other evidences of indebtedness shall not be payable out of or secured by the Revenues or any Fund held under this Resolution and neither the cost of such public facilities nor any expenditure in connection therewith or with the financing thereof shall be payable from the Revenues or from any such Fund hereunder.
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UNITED STATES OF AMERICA Bonds, Series 2014" (the "Bond" or "Bonds") of the Authority, limited to the aggregate STATE OF NEW JERSEY principal amount of $______and authorized and issued under and pursuant to MIDDLESEX COUNTY IMPROVEMENT AUTHORITY the County Improvement Authorities Law, 1960 N.J. Laws c.183, as amended and COUNTY-GUARANTEED CAPITAL EQUIPMENT supplemented, and under and in accordance with a resolution of the Authority duly AND IMPROVEMENT REVENUE BONDS, SERIES 2014 adopted August 13, 2014 entitled, "Resolution of the Middlesex County Improvement Authority Authorizing the Issuance of County-Guaranteed Capital Equipment and No. R- Improvement Revenue Bonds" (the "Bond Resolution") and a resolution of the Authority duly adopted August 13, 2014 entitled, "Resolution of the Middlesex County INTEREST RATE CUSIP NUMBER Improvement Authority Authorizing Certain Actions and Approving Certain Documents 596564___ Necessary in Connection with the Issuance of the Authority's Proposed Not to Exceed $18,000,000 Aggregate Principal Amount of County-Guaranteed Capital Equipment and Improvement Revenue Bonds, Series 2014" (the "Determination Resolution") (the Bond MATURITY DATE BOND DATE AUTHENTICATION DATE Resolution and the Determination Resolution are hereinafter collectively referred to as September 15, ______. 2014 ______. 2014 the "Resolution") and the Series Certificate (as defined in the Bond Resolution). Copies of the Resolution are on file in the office of the Authority in Cranbury, New Jersey and at REGISTERED OWNER: the principal corporate trust office of TD Bank, National Association, Cherry Hill, New Jersey (the "Trustee"), as trustee under the Resolution. PRINCIPAL SUM: This Bond is a direct, limited and special obligation of the Authority payable from the Revenues and secured by a lien on the Pledged Property of the Authority, as such term is defined in the Bond Resolution, and from any other moneys The MIDDLESEX COUNTY IMPROVEMENT AUTHORITY, in the County pledged therefor under the Bond Resolution; provided, however, that the power and of Middlesex, State of New Jersey (hereinafter called the "Authority"), a public body obligation of the Authority to cause application of such Pledged Property and other corporate and politic organized and existing under and by virtue of the laws of the State funds to the payment of the principal or redemption price of and the interest on the of New Jersey, acknowledges itself indebted and for value received hereby promises to Bonds is subject to the terms of the Bond Resolution. This Bond is also an obligation pay to the REGISTERED OWNER stated above, or registered assigns, the PRINCIPAL which is entitled to the benefit of a guarantee of the County of Middlesex, State of New SUM stated above, on the MATURITY DATE stated above or on the date fixed for Jersey (the "County"), authorized pursuant to an ordinance of the County duly adopted redemption, as the case may be, together with interest on such PRINCIPAL SUM from on August 21, 2014 (the "County Guarantee") and the Guarantee Agreement by and the date of this Bond (as hereinafter defined) until the Authority's obligation with respect between the County and the Authority dated as of September 30, 2014 (the "Guarantee to the payment of such PRINCIPAL SUM shall be discharged, at the INTEREST RATE Agreement"), which County Guarantee and Guarantee Agreement secure the payment per annum stated above on March 15, 2015, and semiannually thereafter on the of principal of and interest on the Bonds (but not redemption premium, if any). fifteenth day of September and March. This Bond (as hereinafter defined), as to principal, when due, will be payable at the principal corporate trust office of TD Bank, The Bonds are issued in the form of Registered Bonds without coupons in National Association, Cherry Hill, New Jersey. Interest on this Bond will be payable by book-entry only form in the denomination of $5,000 or any integral multiple thereof. check which will be mailed or shall be by wire transfer to the Registered Owner hereof whose name shall appear on the registration books of the Authority which shall be kept As defined in the Bond Resolution, and for purposes of this Bond, and maintained by the Bond Registrar hereinafter mentioned, as determined on the first "Business Day" shall mean any day that is not a Saturday, a Sunday or a legal holiday day of March and September (whether or not a Business Day) (the "Record Date"); in the State of New Jersey or the State of New York or a day on which the Trustee, the provided however, that a Registered Owner of $1,000,000 or more in principal amount Bond Registrar, the Authority or any Paying Agent is legally authorized to close. All of Bonds shall be entitled, upon five (5) Business Days' written notice to the Trustee in other terms used herein which are not defined shall have the meanings ascribed to such advance of the applicable Record Date, to receive interest payments by wire transfer of terms in the Bond Resolution. immediately available funds. Payment of the principal of and interest on this Bond shall The Bonds maturing prior to ______, 20__ are not subject to be made in any coin or currency of the United States of America which at the time of redemption prior to their stated maturity dates. payment is legal tender for the payment of public and private debts. The Bonds maturing on and after ______, 20__ are subject to This Bond is one of the duly authorized issue of revenue bonds, each redemption prior to maturity at the option of the Authority, upon the written consent of designated as "County-Guaranteed Capital Equipment and Improvement Revenue
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the County, on or after ______, 20__, upon notice to the Registered Owner hereof redemption of the Bonds upon the making of provision for the payment thereof on the as hereinafter provided, as a whole or in part at any time, in inverse order of maturities terms and conditions set forth in the Resolution. at the respective redemption prices (expressed as percentages of the principal amount of the Bonds or portions thereof to be redeemed) set forth below for the applicable This Bond is transferable, as provided in the Bond Resolution, only upon redemption period, together with interest accrued thereon, to the date fixed for the registration books of the Authority which are kept and maintained for that purpose at redemption: the principal corporate trust office of TD Bank, National Association, Cherry Hill, New Jersey (the "Bond Registrar"), as registrar under the Resolution, or its successor as Optional Redemption Period Redemption Price Bond Registrar, by the Registered Owner hereof in person or by his attorney duly (Both Dates Inclusive) authorized in writing, upon surrender hereof together with a written instrument of % transfer which is satisfactory to the Bond Registrar and which is duly executed by the Registered Owner or by such duly authorized attorney, together with the required signature guarantee, and thereupon the Authority shall issue in the name of the If less than all of the Bonds of like maturity Outstanding are to be transferee a new registered Bond or Bonds, of the same aggregate principal amount redeemed, the particular Bonds to be redeemed shall be selected as provided in the and series, designation, maturity and interest rate as the surrendered Bond as provided Bond Resolution. in the Bond Resolution, upon payment of the charges therein prescribed. The Authority, the Trustee, the Bond Registrar and any Paying Agent of the Authority may Notice of each optional or mandatory redemption of the Bonds shall be treat and consider the person in whose name this Bond is registered as the Holder and mailed by the Trustee, via first class mail, postage prepaid, not less than thirty (30) days absolute owner of this Bond for the purpose of receiving payment of the principal or nor more than sixty (60) days prior to the redemption date, to the Registered Owner Redemption Price of and interest due thereon and for all other purposes whatsoever. hereof, in accordance with the provisions of the Bond Resolution. If notice of redemption shall have been provided as aforesaid, the Bonds which are specified in Reference to the Resolution, to the County Guarantee, to the Guarantee said notice shall become due and payable at the applicable Redemption Price on the Agreement and to the Act is made for a description of the nature and extent of the redemption date therein designated, and if, on the redemption date, moneys for security for the Bonds, the Pledged Property, the funds pledged for the payment payment of the Redemption Price of all of the Bonds which are to be redeemed, thereof, the nature, manner and extent of the enforcement of such pledge, the rights together with interest accrued thereon to the redemption date, shall be available for and remedies of the Holders of the Bonds with respect thereto, the terms and conditions such payment on said date, then from and after the redemption date, interest on such upon which the Bonds are issued and upon which they may be issued thereunder, and Bonds shall cease to accrue and become payable to the Holders who are entitled to a statement of the rights, duties, immunities and obligations of the Authority, the County receive payment thereof upon such redemption. So long as this Bond is registered in and of the Trustee. the name of The Depository Trust Company, New York, New York ("DTC") or its nominee, Cede & Co., notice of redemption shall be mailed by the Trustee to DTC or its THE ACT PROVIDES THAT NEITHER THE MEMBERS OF THE nominee, and the Trustee shall not be required to mail notices of redemption to any AUTHORITY NOR ANY PERSON EXECUTING THE BONDS SHALL BE LIABLE other person or entity. PERSONALLY ON THE BONDS BY REASON OF THE ISSUANCE THEREOF.
Pursuant to the Bond Resolution, the Authority may hereafter issue THE BONDS ARE NOT AND SHALL NOT BE IN ANY WAY A DEBT OR refunding bonds (herein called "Refunding Bonds") for the purposes, in the amounts LIABILITY OF THE STATE OF NEW JERSEY OR ANY SUBDIVISION THEREOF and on the conditions prescribed in the Bond Resolution. All bonds issued and to be OTHER THAN THE AUTHORITY, AND AS APPLICABLE UNDER AND LIMITED BY issued under the Bond Resolution, including Refunding Bonds, are and will be equally THE COUNTY GUARANTEE AND THE GUARANTEE AGREEMENT, THE COUNTY, secured by the pledge of funds and Revenues provided in the Bond Resolution except AND DO NOT AND SHALL NOT CREATE OR CONSTITUTE ANY INDEBTEDNESS, as otherwise provided in or pursuant to the Bond Resolution. LIABILITY OR OBLIGATION OF SAID STATE, OR OF ANY SUBDIVISION OTHER THAN THE AUTHORITY, AND AS APPLICABLE UNDER AND LIMITED BY THE To the extent and in the respects permitted by the Resolution, the COUNTY GUARANTEE AND THE GUARANTEE AGREEMENT, THE COUNTY, provisions of the Resolution or any resolution amendatory thereof or supplemental EITHER LEGAL, MORAL OR OTHERWISE. THE AUTHORITY IS OBLIGATED TO thereto may be modified or amended by action taken on behalf of the Authority in the PAY THE PRINCIPAL OR REDEMPTION PRICE OF, AND INTEREST ON THE manner and subject to the conditions and exceptions which are set forth in the BONDS FROM THE REVENUES AND FUNDS PLEDGED THERETO. NEITHER THE Resolution. The pledge of the Pledged Property and other obligations of the Authority FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OR ANY under the terms of the Bond Resolution may be discharged at or prior to the maturity or POLITICAL SUBDIVISION THEREOF (OTHER THAN THE COUNTY, AS APPLICABLE, UNDER AND LIMITED BY THE COUNTY GUARANTEE AND COUNTY
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GUARANTEE AGREEMENT) IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL ASSIGNMENT OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS.
It is hereby certified and recited that all conditions, acts and things which FOR VALUE RECEIVED, the undersigned hereby sells, assigns and are required by the Constitution or by the statutes of the State of New Jersey or by the transfers unto ______Resolution to exist, to have happened or to have been performed precedent to or in the ______issuance of this Bond exist, have happened and have been performed and that the ______Bonds, together with all other indebtedness of the Authority, are within every debt and PLEASE PRINT OR TYPE NAME, ADDRESS AND TAXPAYER IDENTIFICATION NO. other limit prescribed by said Constitution or statutes. OF ASSIGNEE
This Bond shall not be entitled to any security or benefit under the terms of the Resolution or be valid or obligatory for any purpose unless the certificate of authentication has been manually executed by the Trustee upon original issuance and the within Bond and all rights thereunder, and hereby irrevocably constitutes and thereafter by the Bond Registrar. appoints ______, as Attorney, to transfer the within Bond on the registration books of the Middlesex County Improvement Authority with full power of IN WITNESS WHEREOF, MIDDLESEX COUNTY IMPROVEMENT substitution and revocation. AUTHORITY has caused this Bond to be signed in its name and on its behalf by the manual or facsimile signature of its [Vice] Chairman and its corporate seal to be affixed, impressed or reproduced hereon, and this Bond and such seal to be attested by the ______manual or facsimile signature of its [Assistant] Secretary, all as of the BOND DATE set forth above. NOTICE: The signature to this assignment must correspond with the name of the MIDDLESEX COUNTY IMPROVEMENT registered owner hereof as it appears upon AUTHORITY the face of the within bond in every particular, without alteration or enlargement or any change whatsoever. ATTEST:
Dated: ______BY:______, Secretary , Chairman SIGNATURE GUARANTEE:
(National Bank, trust company or SEAL commercial bank located in the City or State of New York, or the State of New Jersey, or any member of the New York Stock Exchange)
______
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Section 1402. Form of Certificate of Authentication of Trustee or Section 1404. Effective Date. This Resolution shall take effect Bond Registrar. The form of Certificate of Authentication by the Trustee or Bond immediately upon its adoption in accordance with the Act. Registrar on the Bonds shall be substantially as follows:
“CERTIFICATE OF AUTHENTICATION
This bond is one of the issue of County-Guaranteed Capital Equipment and Improvement Revenue Bonds, Series 2014 of the Middlesex County Improvement Authority, described and delivered pursuant to the within mentioned Resolution and being dated September 30, 2014.
______, Trustee or Bond Registrar
By:______Authorized Signature“
Section 1403. Form of County Guarantee. The form of County Guarantee which shall appear on the Bonds shall be substantially as follows:
"GUARANTEE OF THE COUNTY OF MIDDLESEX, STATE OF NEW JERSEY
Pursuant to the provisions of the County Improvement Authorities Law referred to in the within Bond, the payment of the principal of and interest on the within Bond is hereby FULLY AND UNCONDITIONALLY GUARANTEED by the County of Middlesex, State of New Jersey, and the County of Middlesex, State of New Jersey, is unconditionally liable for the payment, when due, of the principal of and interest on said Bond in accordance with its terms.
IN WITNESS WHEREOF, the County of Middlesex, State of New Jersey, has caused this Guarantee to be executed on its behalf by the manual or facsimile signature of its Director or Deputy Director of its Board of Chosen Freeholders ,and the seal of the County of Middlesex, State of New Jersey, to be impressed, imprinted or otherwise reproduced hereon, all as of the date of the within Bond.
COUNTY OF MIDDLESEX, STATE OF NEW JERSEY
By: , (Deputy) Director of the Board of Chosen Freeholders" (SEAL)
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APPENDIX D
COPY OF THE GUARANTEE ORDINANCE AND FORM OF THE GUARANTEE AGREEMENT
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COUNTY GUARANTEE AGREEMENT
By and Between
MIDDLESEX COUNTY IMPROVEMENT AUTHORITY
and
COUNTY OF MIDDLESEX, STATE OF NEW JERSEY
Dated as of September 30, 2014
#7577340.1(104875.111)
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THIS COUNTY GUARANTEE AGREEMENT (the "Guarantee Agreement") made and dated as of the 30th day of September, 2014 by and between the Middlesex County Improvement Authority (the "Authority"), a public body politic and corporate of the State of New Jersey, and the County of Middlesex (the "County"), a public body politic and corporate of the State of New Jersey.
W I T N E S S E T H:
WHEREAS, the Authority has been created by resolution of the Board of Chosen Freeholders of the County, duly adopted September 6, 1990, as a public body politic and corporate of the State of New Jersey, pursuant to the provisions of the County Improvement Authorities Law, chapter 183 of the Laws of New Jersey of 1960, and the acts amendatory thereof and supplemental thereto (N.J.S.A. 40:37A-44 et seq.) (the "Act"); and
WHEREAS, pursuant to the terms of the Act, the Authority is authorized to provide public facilities, as such term is defined in the Act, including capital improvements and equipment, within the County, including the County or a beneficiary county; and
WHEREAS, the Authority has determined to finance the various capital improvements to be undertaken by and the acquisition, installation and, as applicable, subsequent leasing of certain capital equipment, including but not limited to police and passenger vehicles, to various governmental entities within the County, including the County (the "Project"); and
WHEREAS, to provide funds for, among other things, payment of the costs of the Project, the Authority will issue its County-Guaranteed Capital Equipment And Improvement Revenue Bonds, Series 2014 in an aggregate principal amount of $17,275,000 (the "Bonds") as more fully described and authorized in a resolution duly adopted by the Authority on August 13, 2014, authorizing the issuance of such Bonds entitled, "Resolution of the Middlesex County Improvement Authority Authorizing the Issuance of County-Guaranteed Capital Equipment And Improvement Revenue Bonds" and a resolution entitled "Resolution of the Middlesex County Improvement Authority Authorizing Certain Actions and Approving Certain Documents Necessary In Connection with the Issuance of the Authority's Proposed Not to Exceed $18,000,000 Aggregate Principal Amount of County-Guaranteed Capital Equipment And Improvement Revenue Bonds, Series 2014" duly adopted by the Authority on August 13, 2014 (collectively, the "Bond Resolution"); and
WHEREAS, pursuant to the provisions of N.J.S.A. 40:37A-80, the County is authorized to fully and unconditionally guarantee the punctual payment of the principal of, and the interest on any obligations issued by the Authority by ordinance duly adopted by the Board of Chosen Freeholders of the County in the manner provided in the Local Bond Law, N.J.S.A. 40A:2-1 et seq. (the “Local Bond Law”); and
#7577340.1(104875.111) WHEREAS, to provide an inducement to the prospective purchasers of the Bonds to purchase same and to provide additional security to the holders thereof, in accordance with the terms of the Act, particularly N.J.S.A. 40:37A-80, the Authority has requested the County to guarantee the full and punctual payment of the principal of and interest, when due, on the Bonds; and
WHEREAS, by an ordinance duly adopted by the Board of Chosen Freeholders of the County on August 21, 2014 pursuant to and in accordance with the Act, the County authorized and provided for the guarantee of the full and punctual payment of the principal of and interest on the Bonds of the Authority, to be issued in an aggregate principal amount not exceeding $18,000,000 (the "County Guarantee") in accordance with and under the terms and conditions of this Guarantee Agreement; and
WHEREAS, prior to issuance of the Bonds, each Municipality shall, pursuant to a duly adopted loan ordinance and/or lease ordinance, as applicable, enter into a loan and security agreement (the “Loan Agreement” and collectively, the “Loan Agreements”) and/or lease agreement (the "Lease" and collectively, the "Leases"), in form and substance satisfactory to Bond Counsel to the Authority, and County Counsel, embodying the obligation of such Municipality to unconditionally perform the obligations thereunder including the payment of Loan Payments (as defined in the Loan Agreement) and/or Rent, (as defined in the Lease) and to repay to the County any amounts which are due as a result of a payment by the County pursuant to the provisions of the Bond Resolution, the Loan Agreement, the Lease, County Guarantee and this Guarantee Agreement, due to the failure of such Municipality to make any required Loan Payment or Loan Payments or payment or payments of Rent, plus any other County Guarantee Costs (as such term is hereinafter defined), and to provide that the provisions of the Loan Agreement and/or Lease by their terms and as permitted by the Act, shall not be subject to annual or other appropriation; and
WHEREAS, under the Authority's Bond Resolution, upon the County incurring County Guarantee Costs to satisfy a Debt Service Requirement of the Bonds pursuant to the County Guarantee, the County shall become subrogated to the rights of the holders of the Bonds to all delinquent Loan Payments or payments of Basic Rent, which shall be paid directly to the County, in accordance with Sections 508, 708, and 709 of the Bond Resolution, upon receipt by the Trustee of a proper requisition therefor, unless the Trustee is otherwise directed, pursuant to Section 508 of the Bond Resolution, by the County to apply the same as a credit toward subsequent Loan Payments or payments of Basic Rent; further, in the event no such delinquent Loan Payments or payments of Basic Rent are made by any such defaulting Municipality, and the County remains unreimbursed for County Guarantee Costs incurred to satisfy a Debt Service Requirement of the Bonds, or, upon the County incurring any County Guarantee Costs, other than amounts paid to the Trustee to satisfy a Debt Service Requirement of the Bonds, the County's right to reimbursement from all Funds and Accounts established under the Authority's Bond Resolution shall be noted, and, pursuant to Sections 708 and 709 of the Bond Resolution, after all Bonds are paid in full, any funds remaining therein shall be paid to the County to the extent such costs remain unreimbursed.
-2- #7577340.1(104875.111) NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, the Authority and the County, each binding itself and its successors and assigns, do mutually covenant, promise and agree as follows:
Section 1. Pursuant to the provisions of the Act, the County hereby agrees to unconditionally and irrevocably guarantee the punctual payment of the principal of and interest on the Bonds issued by the Authority, in the aggregate principal amount of $17,275,000. The full faith and credit of the County are hereby pledged for the full and punctual performance of this guarantee (the "County Guarantee").
Section 2. The Director or Deputy Director of the Board of Chosen Freeholders of the County shall execute on each of the Bonds by manual or facsimile signature, a certificate evidencing the guarantee by the County of the punctual payment of the principal of and the interest thereon, such County Guarantee to be in substantially the following form:
"GUARANTEE OF THE COUNTY OF MIDDLESEX, STATE OF NEW JERSEY
Pursuant to the provisions of the County Improvement Authorities Law referred to in the within Bond, the payment of the principal of and interest on the within Bond is hereby FULLY AND UNCONDITIONALLY GUARANTEED by the County of Middlesex, State of New Jersey, and the County of Middlesex, State of New Jersey, is unconditionally liable for the payment, when due, of the principal of and interest on said Bond in accordance with its terms.
IN WITNESS WHEREOF, the County of Middlesex, State of New Jersey, has caused this Guarantee to be executed on its behalf by the manual or facsimile signature of its Director or Deputy Director of its Board of Chosen Freeholders, and the seal of the County of Middlesex, State of New Jersey to be impressed, imprinted or otherwise reproduced hereon, all as of the date of the within Bond.
(SEAL) COUNTY OF MIDDLESEX STATE OF NEW JERSEY
By:______, (Deputy) Director of the Board of Chosen Freeholders"
-3- #7577340.1(104875.111) Section 3. It is hereby found, determined and declared by the County that:
(a) This Guarantee Agreement may be entered into notwithstanding any statutory or other debt limitation, including particularly any limitation or requirement under or pursuant to the Local Bond Law, however, the aggregate principal amount of the Bonds which shall be entitled to the benefits of the County Guarantee pursuant to the terms hereof, is $17,275,000, and shall be reflected in the debt statements of the County in the manner provided in the Act, particularly N.J.S.A. 40:37A-80.
(b) The principal amount of the Bonds which shall be entitled to the benefits of the County Guarantee pursuant to the terms hereof and which shall be included in the gross debt of the County shall be deducted from, and shall constitute a deduction from, such gross debt under and for all purposes of the Local Bond Law (i) from and after the time of issuance of the Bonds until the end of the fiscal year beginning next after the completion of acquisition of the Project being financed from the proceeds of the Bonds, that being the undertaking of capital improvements or the acquisition of the capital equipment being financed with the proceeds of the Bonds, and (ii) in any annual debt statement which is required to be filed pursuant to the Local Bond Law, as of the end of such fiscal year or any subsequent fiscal year if the revenues or other receipts or moneys of the Authority relative to the Project, in such year are sufficient to pay its expenses of operation and maintenance, including the expenses of administration of the Project, in such year and all amounts which are payable in such year on account of the principal of and interest on the Bonds, all bonds of the County or any Municipality issued as provided in N.J.S.A. 40:37A-79, and all bonds of the Authority issued under the Act, or shall be deducted as otherwise permitted by law.
(c) In order to allow the County to determine its ability to deduct the Bonds from the County's gross debt, the Authority shall provide the County with advance notice of the sale and issuance of all bonds of any Municipality issued pursuant to N.J.S.A. 40:37A-79 and all bonds issued by the Authority pursuant to the Act, and of any other circumstances which would cause the Bonds or the County Guarantee or the Guarantee Agreement to be included in the gross debt of the County or which would prevent the deduction of the Bonds or the County Guarantee or Guarantee Agreement from the gross debt of the County, as described above. Said advance notice shall be directed to the Chief Financial Officer of the County and received not less than thirty (30) days prior to the sale of such obligations or the occurrence of such circumstance described herein.
(d) The purpose described herein is not a current expense of the County and no part of the cost thereof has been or shall be assessed on property specially benefited thereby.
(e) A supplemental debt statement of the County has been duly made by the Chief Financial Officer of the County and filed in the office of the Clerk of the Board of Chosen Freeholders upon the introduction of the County Guarantee on July 17, 2014, and a complete executed duplicate thereof shall be filed in the office of the Director of the Division of Local Government Services, New Jersey Department of Community Affairs,
-4- #7577340.1(104875.111) prior to the final adoption of the County Guarantee, and such debt statement shall show that while the gross debt of the County, as defined in the Local Bond Law, has been increased by the amount of Bonds issued by the Authority, upon satisfaction of the conditions set forth in N.J.S.A. 40:37A-80, in accordance with the provisions of the Act, the net debt of the County shall not be increased, and the obligation of the County which is authorized by or incurred pursuant to the County Guarantee and the terms hereof is permitted notwithstanding any statutory debt or other limitations, including particularly any limitation of the Local Bond Law, which exception to statutory limitations is contained in the Act.
Section 4. The County and the Authority hereby agree as follows:
(a) The maximum principal amount of the Bonds of the Authority which are hereby and hereunder fully and unconditionally guaranteed as to payment of principal of and interest, is $17,275,000 in Bonds at any one time Outstanding.
(b) All Bonds issued pursuant to the Authority's Bond Resolution shall be guaranteed by the County pursuant to the Act, the County Guarantee, and as authorized herein.
(c) The County, as an Obligated Person, hereby covenants to comply with the requirements of Rule 15c2-12 as promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 (the "Rule") including the secondary market disclosure requirements contained therein. The Freeholder Director, the County Administrator, the Clerk of the Board of Chosen Freeholders, the Chief Financial Officer of the County or any other Authorized County Representative are each hereby authorized and directed to execute and deliver all certificates, documents and agreements including, without limitation, the Continuing Disclosure Agreement, to the Authority in connection therewith and to file budgetary, financial and operating data on an annual basis and notices of certain enumerated events as required to comply with and in accordance with the provisions of the Rule; provided that the failure of the County to observe or perform its obligations in connection therewith shall not constitute an event of default under the Bond Resolution or hereunder; and provided further that the Beneficial Owners of the Bonds (as defined in the Continuing Disclosure Agreement) may take such actions as are necessary and appropriate to cause the County to comply with its obligations set forth in the Continuing Disclosure Agreement or hereunder.
Section 5. (a) The Authority's Bond Resolution, Loan Agreement and the Lease shall provide that each Loan Payment and/or Basic Rent payment, as applicable, shall be due no later than the fifteenth day of the second month immediately preceding the Debt Service Payment Date to which such Loan Payment and/or Basic Rent payment, as applicable, relates (or more frequently as provided in the Loan Agreements, Leases and the Authority's Bond Resolution). The Trustee shall notify the County and the Authority in writing in accordance with Section 17 hereof, no later than 3:00 p.m. on the date which is two (2) Business Days after the Loan Payment Date and/or Lease Payment Date when such Loan Payment and/or Basic Rent payment, as applicable, is due, of the payment, insufficient payment, or non-payment of the same by each such Municipality, and the
-5- #7577340.1(104875.111) County shall acknowledge receipt thereof in writing in accordance with Section 17 hereof, within two (2) Business Days. The Trustee and the Authority shall cooperate with the reasonable requests of the County to secure payment of the amounts due from such Municipality.
(b) The Authority's Bond Resolution shall further provide that if on any Loan Payment Date and/or Lease Payment Date, which date shall be not less than the fifteenth day of the second month immediately preceding the next Interest Payment Date or Principal Installment Date (each, a "Debt Service Payment Date"), the available funds on deposit in each Municipal Account in the Debt Service Fund are insufficient to provide for the payment of the principal of and interest on the Bonds on the next succeeding Debt Service Payment Date, the Trustee shall notify the County, the Authority and the defaulting Municipality in writing in accordance with Section 17 hereof no later than 3:00 p.m. on the date which is two (2) Business Days after such Loan Payment Date and/or Lease Payment Date of the amount which is necessary to provide for the full payment of the principal of and interest on the Bonds on such next Debt Service Payment Date, together with the identity of the Municipality which failed to make a sufficient Loan Payment and/or Basic Rent payment, the amount of such deficiency, and shall demand that such deficiency be cured by the defaulting Municipality no later than thirty (30) days before the next ensuing Debt Service Payment Date. The County shall acknowledge receipt of such notice in writing in accordance with Section 17 hereof within two (2) Business Days. If the deficiency of such defaulting Municipality is not so cured thirty (30) days prior to the next ensuing Debt Service Payment Date, the Trustee shall so notify the County within two (2) Business Days thereafter and the County shall acknowledge receipt thereof within two (2) Business Days, and, no later than two (2) Business Days prior to such Debt Service Payment Date, the County shall make payment in immediately available funds to the Trustee of the amount of such deficiency in the Debt Service Fund then existing for such defaulting Municipality. Such County payment shall be deposited by the Trustee into the appropriate defaulting Municipality's Municipal Account in the Debt Service Fund, as and to the extent provided in the Authority's Bond Resolution. Notwithstanding any other provision of this Guarantee Agreement to the contrary, failure of the Trustee to give the County notice as provided herein and as set forth in subparagraph (a) above shall not relieve the County of its obligation to make payment to the Trustee under the terms of the County Guarantee, provided, however, that nothing herein shall be construed as a waiver of the County's right to proceed against the Authority or the Trustee for the County's damages, if any, arising from the failure to give timely notice to the County. Notwithstanding the foregoing, the Trustee shall not be responsible for any losses, liabilities, expenses or fees (including counsel fees) which are not due to its own gross negligence or willful misconduct.
(c) When notice has been provided as described above, the County shall take all actions necessary and permitted by law to make payment of an amount which, when added to the available amounts which are on deposit in the Debt Service Fund, is sufficient to pay the principal of and interest on the Bonds due on such Debt Service Payment Date.
-6- #7577340.1(104875.111) Section 6. (a) In the event the County is required to make any payment or incurs any expense pursuant to the provisions of the County Guarantee or this Guarantee Agreement, any Municipality which is the cause of such payment or expense shall repay or cause to be repaid to the County, in accordance with the Bond Resolution, all direct and indirect costs of the County hereunder including, but not limited to, an amount equal to such payment, together with interest on such amount at an interest rate equal to the County's cost of obtaining funds required to make such payment (which cost is deemed to include earnings which the County is caused to forgo on the investment of available funds used to make such payment, as determined by the County), or the net interest cost of the Bonds, whichever is higher, plus reasonable attorneys' fees and other costs of the County arising from such payment or expense, together with interest accrued on such sum until the County is reimbursed (such payments pursuant to the County Guarantee, including interest costs, attorneys' fees, accrued interest and similar costs, but not including those costs and expenses incurred by the County in connection with curing its own default under its Loan Agreement and/or Lease as a Municipality, are herein referred to collectively as the "County Guarantee Costs"), as set forth in a certificate of an Authorized County Representative to the Authority and to the Trustee.
(b) The Authority's Bond Resolution, Loan Agreement and the Lease shall provide that: (i) in the event the County makes a payment to the Trustee to satisfy a Debt Service Requirement of the Bonds pursuant to the County Guarantee, the County shall acquire the rights as a subrogee to the Bondholders and any delinquent Loan Payment or Basic Rent payment made by any defaulting Municipality shall be paid to the Trustee first for deposit to the Revenue Fund and then to the Debt Service Fund and immediately disbursed therefrom by the Trustee, in accordance with Sections 508, 708 and 709 of the Bond Resolution, to the County upon appropriate requisition, unless otherwise instructed by the County, pursuant to Section 508 of the Bond Resolution; (ii) in the event a payment made under subsection (i) herein remains unreimbursed or a County Guarantee Cost is incurred or paid (other than an amount paid to the Trustee to satisfy a Debt Service Requirement of the Bonds) under the County Guarantee or the County Guarantee Agreement, any defaulting Municipality shall reimburse such costs to the County by the payment thereof to the Trustee first for deposit to the Revenue Fund and then to the Operating Fund and immediately disbursed by the Trustee to the County, in accordance with Section 505 of the Bond Resolution, upon appropriate requisition; (iii) in the event County Guarantee Costs are not otherwise reimbursed to the County, the Trustee shall note on its records the County's right to reimbursement from all Funds and Accounts established under the Authority's Bond Resolution so that upon full payment or defeasance of the Bonds, any moneys remaining in such Funds and Accounts under the Authority's Bond Resolution shall be applied to the reimbursement of such County Guarantee Costs; and (iv) in addition to and concurrent with the above-described rights of the County to reimbursement, the County shall have the right to enforce the provisions of the Loan Agreement and/or Lease and each Loan Agreement and/or Lease shall provide that each Municipality acknowledges the County's right to bring ex parte injunctive action to enforce the full and timely payment of Loan Payments and/or Basic Rent payments.
(c) The Authority covenants to take all action within its power (in accordance with applicable law) to enable the Authority to repay or cause to be repaid to
-7- #7577340.1(104875.111) the County all County Guarantee Costs. Such action shall include, without limitation, requiring each Municipality to enter into a Loan Agreement and/or Lease embodying the obligation of such Municipality (i) to pay all amounts due in respect of said Municipality's pro rata share of the Bonds, and to repay to the County all County Guarantee Costs which were incurred due to the failure of such Municipality to make any required payment or payments to the Authority or the Trustee; (ii) to grant the County a direct right to enforce the Loan Agreement and/or Lease to collect the repayment of County Guarantee Costs; (iii) to covenant to make the appropriation for (a) the full Loan Payment due under its Loan Agreement and/or (b) the full Basic Rent payment due under its Lease for such fiscal year each as a specific line item appropriation in each annual budget and to direct an Authorized Municipal Representative or the Chief Financial Officer of such Municipality to certify to the Trustee that such appropriation is included in each such temporary or annual budget as adopted, and in the case of each annual budget, as filed with the Director of the Division of Local Government Services, New Jersey Department of Community Affairs (the "Division"), and to attach to such certification the extract of said budget reflecting each such line item appropriation, such certification to be received by the Trustee within five (5) Business Days of such budget adoption or filing, and (iv) to covenant to provide written notice to the Trustee of any revision of or transfer from the line item appropriation described in subsection (iii) hereof within five (5) Business Days of such revision or transfer.
(d) Pursuant to the Authority's Bond Resolution, Loan Agreements and/or the Leases, each Municipality shall submit to the Trustee, the Authority and the County Chief Financial Officer all certifications and notices described in subsection (c) hereof.
(e) The Authority covenants to provide to the County the notices set forth in Section 3(c) hereof.
Section 7. The County will take all actions necessary and permitted by law to provide for and authorize the payment by the County, as needed, of all amounts due under this Guarantee Agreement or otherwise pursuant to the County Guarantee. The County further agrees to cause the levy and collection of ad valorem taxes upon all taxable property within the County in an amount sufficient to pay said amounts, to the extent other funds available to the County are not sufficient therefor.
Section 8. The Authority will keep proper books of records and accounts in which complete and correct entries shall be made of all its transactions, including, without limitation, transactions relating to the Project, and which, together with all other public books and papers of the Authority, whether or not relating to the Project, shall at all reasonable times be subject to inspection by the County or its representatives. The Authority shall cause its books and accounts to be accurately audited annually by a registered municipal accountant or certified public accountant of New Jersey, and annually, within the time periods provided by law, copies of the report of such audits shall be furnished to the County, including statements in reasonable detail, accompanied by an unqualified opinion signed by such accountant, of financial conditions, of revenues and operating expenses, and of all such funds held by or for the Authority.
-8- #7577340.1(104875.111) Section 9. The obligations of the County hereunder are unconditional. Failure on the part of the Authority or the Trustee in any instance or under any circumstances to observe or fully perform any obligation assumed by or imposed upon either the Authority or the Trustee by this Guarantee Agreement or by law shall not relieve the County from making any payment or fully performing any other obligations imposed by the Guarantee Agreement, but the County may have and pursue any and all remedies provided by law or in the Authority's Bond Resolution for compelling performance by the Authority or the Trustee of obligations assumed by or imposed upon the Authority or the Trustee. Notwithstanding the foregoing, the Trustee shall not be responsible for any losses, liabilities, expenses or fees (including counsel fees) which are not due to its own gross negligence or willful misconduct.
Section 10. This Guarantee Agreement may not be assigned by the County or the Authority without the prior written consent of the other party and the written acknowledgement thereto by the Trustee; provided, however, that because this Guarantee Agreement is made with particular reference to the holders or prospective holders of the Bonds for the purpose of assuring and protecting the interests of such holders, the Authority may, pursuant to the Authority's Bond Resolution, assign and pledge to the Trustee for the benefit and security of the holders of the Bonds all of its rights under the provisions of this Guarantee Agreement to receive payments from the County with respect to the Bonds. This ability to assign rights shall be limited solely to those rights specifically set forth in this Guarantee Agreement. During the term of this Guarantee Agreement, the rights of the Authority or the Trustee to receive payments from the County under this Guarantee Agreement shall not be terminated, modified or amended. Notice of any such assignment shall be provided to the Rating Agency within five (5) Business Days of the consent of the Trustee in the manner provided in Section 17 hereof.
Section 11. Within five (5) Business Days after the issuance of the Bonds, the Authority shall prepare and provide to the County Chief Financial Officer, County Counsel, County Bond Counsel and the Clerk of the Board of Chosen Freeholders of the County, a certificate setting forth the principal amount, designation, date of issue, place of payment, maturities, rates of interest, rights of redemption prior to maturity, and redemption prices (if any) of such Bonds, together with a copy of the Authority's Bond Resolution, each certified by its Secretary and under its seal, and, within forty-five (45) days of the Closing, a transcript of all executed closing documents relating to the Bonds. At least one such transcript shall include originally executed documents.
Section 12. The Authority may at any time, with the prior consent, by ordinance, of the County, issue additional bonds for purposes of refunding all or any part of the Bonds, which additional bonds shall be guaranteed by the County, in accordance with the provisions of the Bond Resolution.
Whenever the consent of the County is required pursuant to the provisions of the Bond Resolution, the Loan Agreement, the Lease or this Guarantee Agreement, such consent of the County may be given by written instrument executed by an Authorized County Representative unless such consent is otherwise required by law to be evidenced
-9- #7577340.1(104875.111) by an ordinance or resolution duly adopted by the Board of Chosen Freeholders of the County.
Section 13. The obligations of the County under this Guarantee Agreement shall be absolute and unconditional and shall remain in full force and effect until the entire principal of and interest on the Bonds shall have been paid or duly provided for in accordance with the provisions of the Bond Resolution. The obligations of the County hereunder shall not be affected, modified or impaired upon the occurrence, from time to time, of any event, including without limitation any of the following, whether or not with notice to, or the consent of, the County:
(a) The waiver, compromise, settlement, release or termination of any or all of the obligations, covenants or agreements of the Authority which are contained in each Loan Agreement, Lease, the Bond Resolution or any other agreement which has been or is executed and delivered for or with respect to the Bonds (collectively, the "Financing Documents"), or of the payment, performance or observance thereof;
(b) The failure to give notice to the County of the occurrence of an event of default or any other notice under the provisions of the Loan Agreements, the Leases or this Guarantee Agreement;
(c) The transfer or assignment or the purported transfer or assignment of all or any part of the interest or security interest of the Authority in the Project, if applicable;
(d) The extension of the time for payment of the principal of or interest on the Bonds or of the time for performance of any obligations, covenants or agreements under or arising out of the Financing Documents;
(e) The modification or amendment (whether material or otherwise) of any obligation, covenant or agreement set forth in the Financing Documents;
(f) The taking, suffering or the omission of any of the actions referred to in the Financing Documents or of any actions under this Guarantee Agreement;
(g) Any failure, omission, delay or lack on the part of the Authority to enforce, assert or exercise any right, power or remedy conferred on the Authority in this Guarantee Agreement, the Financing Documents or any other act or acts on the part of the Authority or any of the holders from time to time of the Bonds;
(h) The voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all of the assets, marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition with creditors
-10- #7577340.1(104875.111) or readjustment or other similar proceedings affecting the Authority or any party to the Financing Documents or any of the assets of any of them, or any allegation or contest of the validity of the County Guarantee, or the Financing Documents;
(i) To the extent permitted by law, any event or action that would, in the absence of this clause, result in the release or discharge by operation of law of the County from the performance or observance of any obligation, covenant or agreement contained in this Guarantee Agreement;
(j) The default or failure of the County to fully perform any of its obligations set forth in this Guarantee Agreement; or
(k) The destruction, non-use or non-availability of the Project.
Section 14. No set-off, counterclaim, reduction, or diminution of any obligation, or any defense of any kind or nature (other than performance by the County of its obligations hereunder) which the County has or may have against the Authority, or against any holder of the Bonds, shall be available to the County against the Authority or anyone succeeding to the Authority's interest.
Section 15. The County further guarantees that all payments made with respect to the Bonds will, when made, be final and agrees that if such payment is recovered from or repaid by or on behalf of the Authority or the holders of the Bonds in whole or in part in any bankruptcy, insolvency or similar proceeding instituted by or against the Authority, the County Guarantee shall continue to be fully applicable to such liabilities to the same extent as though the payment so recovered or repaid had never been originally made on such liabilities.
Section 16. The County hereby acknowledges and consents to the irrevocable assignment of the County Guarantee by the Authority to the Trustee for the benefit of the holders of the Bonds, as and to the extent provided in Section 501 of the Bond Resolution.
Section 17. All notices and submissions required hereunder shall be given to the following, or their successors, by facsimile transmission (with written confirmation of receipt), followed by hard copy sent by certified or registered mail, personal delivery or recognized overnight delivery:
(a) To the County: Mr. Giuseppe Pruiti Chief Financial Officer/Treasurer Middlesex County Administration Building John F. Kennedy Square 75 Bayard Street New Brunswick, New Jersey 08901 Facsimile: (732) 745-4356
-11- #7577340.1(104875.111) Margaret E. Pemberton Clerk of the Board of Chosen Freeholders Middlesex County Administration Building John F. Kennedy Square 75 Bayard Street New Brunswick, New Jersey 08901 Facsimile: (732) 745-3110
(b) To the Authority: Mr. Leonard J. Roseman, Chairman Middlesex County Improvement Authority 101 Interchange Plaza Cranbury, New Jersey 08512 Facsimile: (609) 655-4748
(c) To the Authority's Daria Anne Venezia, Esq. Counsel: Venezia & Nolan, P.C. 306 Main Street P.O. Box 399 Woodbridge, New Jersey 07095-0399 Facsimile: (732) 634-2031
(d) Copies of all notices to the Trustee from time to time with respect to the Bonds:
TD Bank, National Association 1006 Astoria Boulevard Cherry Hill, New Jersey 08034 Attn: Institutional Trust Department/Kelly M. Bekas Facsimile: (856) 685-5267
(e) Copies of all notices to the Rating Agency from time to time with respect to the Bonds:
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. 55 Water Street New York, New York 10041
Each party shall give notice from time to time to the other parties, in the manner specified herein, of any change of the identity or address of anyone listed herein.
Section 18. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Authority's Bond Resolution. As used herein, "resolution" shall mean an act or regulation of a governing body which is reduced to writing and which may be finally passed at the meeting at which it was introduced.
-12- #7577340.1(104875.111) Section 19. This Guarantee Agreement may be executed in any number of counterparts, each of which shall be executed by authorized officers of the Authority and the County and acknowledged and accepted by the Trustee and all of which together shall be regarded for all purposes as one original and shall constitute and be but one and the same.
Section 20. If any one or more of the covenants or agreements in this Guarantee Agreement to be performed on the part of the Authority and the County should be contrary to law, then such covenant or covenants, agreement or agreements, shall be deemed severable from the remaining covenants and agreements and shall in no way affect the validity of the other provisions of this Guarantee Agreement.
Section 21. This Guarantee Agreement shall remain in effect so long as any Bonds or other obligations which are entitled to the benefit of the County Guarantee are Outstanding and until the Authority's Bond Resolution, Loan Agreements and the Leases terminate and the County has been reimbursed for all County Guarantee Costs, provided that the provisions hereof may be amended or modified or supplemented with the consent of the parties (by ordinance in the case of the County) and upon provision of opinions of Bond Counsel to the County and the Authority that such modification(s) will not adversely affect the rights of bondholders provided for herein, such opinions to be addressed to the County, the Authority and the Trustee (or accompanied by a reliance letter addressed to such parties).
-13- #7577340.1(104875.111) IN WITNESS WHEREOF, the County and the Authority have caused their respective seals to be hereunto affixed and attested, these presents to be signed by their respective officers thereunto duly authorized and this Guarantee Agreement to be dated as of the date and the year first above written.
(SEAL)
ATTEST: MIDDLESEX COUNTY IMPROVEMENT AUTHORITY
By: By: JACQUE EAKER, LEONARD J. ROSEMAN, Secretary/Treasurer Chairman
(SEAL)
ATTEST: COUNTY OF MIDDLESEX, STATE OF NEW JERSEY
By: By: MARGARET E. PEMBERTON, RONALD G. RIOS, Clerk Director Board of Chosen Freeholders Board of Chosen Freeholders
Acknowledged and Accepted:
TD BANK, NATIONAL ASSOCIATION, as Trustee
By: KELLY M. BEKAS, Trust Officer
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APPENDIX E
FORM OF THE LOAN AND SECURITY AGREEMENT
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND GENERAL PROVISIONS ...... 2 SECTION 1.1. Definitions ...... 2
ARTICLE II TERM OF LOAN; UNDERTAKING OF IMPROVEMENTS AND ACQUISITION OF EQUIPMENT ...... 10 SECTION 2.1. Term of Loan ...... 10 SECTION 2.2. Acquisition of Improvements or Items of Equipment ...... 10 SECTION 2.3. Issuance of Series 2014 Bonds ...... 11 2014 CAPITAL EQUIPMENT AND IMPROVEMENT FINANCING PROGRAM SECTION 2.4. Application of Bond Proceeds ...... 12 SECTION 2.5. Municipality's Liability ...... 12 SECTION 2.6. Disclaimer of Warranties...... 13 SECTION 2.7. Manufacturers' Warranties...... 13
LOAN AND SECURITY AGREEMENT ARTICLE III LOAN PAYMENTS AND OTHER PAYMENTS ...... 14 SECTION 3.1. Payment of Loan Payments ...... 14 SECTION 3.2. Indemnification of Authority and County ...... 15 BY AND BETWEEN SECTION 3.3. Nature of Obligations of the Municipality ...... 16 SECTION 3.4. Municipal Loan Payment Obligation ...... 17 SECTION 3.5. Municipal Prepayment in the Event of Optional Redemption ...... 17 MIDDLESEX COUNTY IMPROVEMENT AUTHORITY SECTION 3.6. Nature of Obligations of the Authority ...... 17 SECTION 3.7. Assignment of Loan Payments by Authority ...... 18
ARTICLE IV LOAN TERM; RENEWAL ...... 19 AND SECTION 4.1. Loan Term for Improvement(s) or Item(s) of Equipment ...... 19
SECTION 4.2. Effect of Noncompliance with Loan Agreement Provisions ...... 19
«FIELD1» OF «FIELD2» ARTICLE V COVENANTS OF MUNICIPALITY ...... 20 SECTION 5.1. Maintenance of Improvements or Equipment by Municipality ...... 20 IN THE COUNTY OF MIDDLESEX, STATE OF NEW JERSEY SECTION 5.2. Taxes, Other Governmental Charges and Utility Charges ...... 20 SECTION 5.3. Provisions Regarding Insurance ...... 20 SECTION 5.4. Advances ...... 20 DATED AS OF SEPTEMBER 30, 2014 SECTION 5.5. Financial Reports ...... 21 SECTION 5.6. Performance Bonds and Other Guaranty ...... 21 SECTION 5.7. Compliance with Laws ...... 21 SECTION 5.8. Covenant Not To Affect the Tax Exempt Status of the Series 2014 Bonds ...... 21 SECTION 5.9. Representations and Warranties of Municipality ...... 22 SECTION 5.10. Municipal Notice: Appropriation for Loan Payments ...... 23 SECTION 5.11. Third Party Beneficiaries ...... 23 SECTION 5.12. Secondary Market Disclosure ...... 23
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EXHIBITS ARTICLE VI TITLE ...... 25 SECTION 6.1. Title To Improvement and Equipment ...... 25 Exhibit A Description of Leased Equipment and Annual Loan Payments (with attached Basic Rent schedules) ...... A-1 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES ...... 26 Exhibit B Certificate as to Authorized Municipal Representative ...... B-1 SECTION 7.1. Events of Default ...... 26 Exhibit C Name/Address/Phone No. of Trustee ...... C-1 SECTION 7.2. Remedies ...... 27 SECTION 7.3. Reinstatement ...... 27 SECTION 7.4. Payments by County ...... 28 SECTION 7.5. No Remedy Exclusive ...... 29 SECTION 7.6. No Additional Waiver Implied By One Waiver ...... 29
ARTICLE VIII MISCELLANEOUS ...... 30 SECTION 8.1. Successors and Assigns ...... 30 SECTION 8.2. Severability ...... 30 SECTION 8.3. Amendments, Changes and Modifications...... 30 SECTION 8.4. Amounts Remaining under Bond Resolution ...... 30 SECTION 8.5. Counterparts ...... 31 SECTION 8.6. Notices and Demands ...... 31 SECTION 8.7. Headings ...... 31 SECTION 8.8. Non-Waiver ...... 31 SECTION 8.9. Survival of Loan Agreement ...... 31 SECTION 8.10. Governing Law ...... 31
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THIS LOAN AND SECURITY AGREEMENT, dated as of September 30, ARTICLE I 2014 by and between the Middlesex County Improvement Authority (hereinafter, the "Authority") and the «FIELD7» of «FIELD8», in the County of Middlesex, State of New DEFINITIONS AND GENERAL PROVISIONS Jersey (hereinafter, the "Municipality"). SECTION 1.1. Definitions. The terms set forth in this section shall have the W I T N E S S E T H: meanings ascribed to them for all purposes of this Loan Agreement unless the context clearly indicates some other meaning. Terms used herein and not defined herein shall have WHEREAS, the Authority is authorized by the County Improvement the meanings ascribed thereto in the Bond Resolution. Words in the singular shall include Authorities Law, chapter 183 of the Laws of New Jersey of 1960, as amended and the plural and words in the plural shall include the singular where the context so requires. supplemented (N.J.S.A. 40:37A-44 et seq.) (the "Act"), to provide within the County of Middlesex, State of New Jersey, or any beneficiary county, public facilities for use by the "Account" or "Accounts" shall mean, as the case may be, each or all of the State, the County or any municipality in the County or any beneficiary county, or any two (2) accounts established and created under Article V of the Bond Resolution. or more or any subdivisions, departments, agencies or instrumentalities of any of the foregoing for any of their respective governmental purposes; and "Acquisition and Improvement Fund" shall mean the Acquisition and Improvement Fund created and established pursuant to Section 502 of the Bond WHEREAS, the Authority is authorized by the Act to make a loan to any Resolution. governmental unit or person, for such consideration and for such period or periods of time and upon such other terms and conditions as it may fix and agree upon; and "Act" shall mean the County Improvement Authorities Law, chapter 183 of the Laws of New Jersey of 1960 (N.J.S.A. 40:37A-44 et seq.), as amended and WHEREAS, the Authority has determined pursuant to the Act to finance, as supplemented from time to time. applicable, the various capital improvements to be undertaken by and the acquisition, installation and, as applicable, subsequent leasing of certain capital equipment, including "Additional Loan Payments" shall mean all amounts payable by the but not limited to police and passenger vehicles, to various governmental entities within the Municipality to the Authority under this Loan Agreement (excluding Basic Loan Payments), County, including the County and the Authority (the "2014 Program"); and including, but not limited to, the annual Trustee's fee and the Authority Administrative Expenses, and where applicable, allocated to the Municipality on a pro rata basis with all WHEREAS, the Improvements (as hereinafter defined) and Equipment (as other Municipalities which are parties to this transaction in relation to the amount of Bonds hereinafter defined) will be financed through the issuance of County-Guaranteed Capital Outstanding in any Bond Year all as set forth in Exhibit A annexed hereto, professional fees Equipment And Improvement Revenue Bonds, Series 2014 (the “Bonds”); and incurred for any arbitrage rebate calculation, arbitrage rebate expenses, County Guarantee Costs, and all direct and indirect costs and expenses incurred by the Authority and the WHEREAS, all actions necessary and required under the Act for the issuance County related to the enforcement of this Loan Agreement and the County Guarantee and of the Bonds have been taken by the Authority; and the County Guarantee Agreement, including reasonable attorneys' fees related thereto.
WHEREAS, the Municipality has determined to participate in the 2014 "Annual Authority Administrative Fee" shall mean the annual fee for the Program and to receive a loan from the Authority pursuant to the terms and conditions set general administrative expenses of the Authority for the Series 2014 Bonds as shall be set forth hereunder; and forth in Exhibit A to this Loan Agreement.
WHEREAS, the Authority will, pursuant to the Act, provide for the financing of "Applicable Basic Loan Payments" shall mean the amount of Basic Loan the cost of, as applicable, the undertaking of the capital improvements and the acquisition of Payments payable on a given Loan Payment Date with respect to a particular Improvement the equipment through the issuance of the Bonds payable from Loan Payments to be or Item of Equipment as set forth in Exhibit A annexed hereto and incorporated by this received from the Municipality pursuant to the terms and conditions set forth herein; reference herein.
NOW, THEREFORE, the parties hereto mutually agree as follows: "Authority" shall mean the Middlesex County Improvement Authority, a public body corporate and politic organized and existing under the Act and created pursuant to a resolution of the Board of Chosen Freeholders of the County of Middlesex adopted on September 6, 1990, and any successor to its duties and functions.
"Authority Administrative Expenses" shall mean any and all expenses of the Authority and its agents, professionals and employees incurred or to be incurred by or on behalf of the Authority in the administration of its responsibilities under the Bond
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Resolution, the County Guarantee Agreement and this Loan Agreement, including, but not Bond Counsel shall mean Wilentz, Goldman & Spitzer, P.A., Woodbridge, limited to, (i) the Initial Authority Financing Fee, (ii) the Annual Authority Administrative Fee, New Jersey or any other lawyer or firm of lawyers with experience and nationally (iii) all fees and expenses, including but not limited to, indemnification expenses, if any, recognized expertise in the field of municipal finance selected by the Authority. incurred in connection with the issuance of the Series 2014 Bonds, the financing of the Improvements and Equipment or the compelling of the full and punctual performance of the "Bondholder", "Holder of Bonds", "Holder" or "Owner" shall mean any Bond Resolution and this Loan Agreement in accordance with the terms thereof and hereof, person who shall be the registered owner of any Bond or Bonds. (iv) all fees and expenses, including, but not limited to, indemnification expenses, if any, of counsel, Fiduciaries and others, and (v) any fees and expenses, including, but not limited "Bond Resolution" or “Resolution” shall mean the resolution adopted by to, indemnification expenses, if any, incurred by the Paying Agent, the Bond Registrar or the the Authority on August 13, 2014 entitled "Resolution of the Middlesex County Improvement Trustee or any or all Fiduciaries in connection with the performance of their respective Authority Authorizing the Issuance of County-Guaranteed Capital Equipment And fiduciary responsibilities under the Bond Resolution, the County Guarantee Agreement and Improvement Revenue Bonds", as the same may be amended, modified or supplemented this Loan Agreement, all to the extent not capitalized pursuant to the requirements of the in accordance with the provisions thereof. Bond Resolution, which Authority Administrative Expenses shall be paid as Additional Loan Payments by the Municipality and where applicable, allocated to the Municipality on a pro "Bond Year" shall mean the twelve (12) month period beginning September rata basis with all other Municipalities which are parties to this transaction in relation to the 15 and ending on September 14, excepting that the first Bond Year with respect to the amount of Bonds Outstanding in any Bond Year, all as set forth in Exhibit A attached Series 2014 Bonds shall commence on the date of original issuance of the Series 2014 hereto. Bonds and end on September 14, 2015.
"Authorized Authority Representative" shall mean any person or persons "Business Day" shall mean any day that is not a Saturday, Sunday or a authorized to act on behalf of the Authority by a written certificate signed on behalf of the legal holiday in the State of New Jersey or the State of New York or a day on which the Authority by the Chairman or Vice Chairman of the Authority containing the specimen Trustee, the Bond Registrar, any Paying Agent or the Authority is legally authorized to signature of each such person. close.
"Authorized County Representative" shall mean any person or persons "Code" shall mean the Internal Revenue Code of 1986, as amended from authorized to act on behalf of the County by a written certificate signed on behalf of the time to time, and the applicable regulations thereunder. County by the Director or Deputy Director of the Board of Chosen Freeholders of the County containing the specimen signature of each such person. "Cost" or "Costs" shall mean and be deemed to include, with respect to any Improvement or Item of Equipment for each Municipality and, where applicable, allocated "Authorized Municipal Representative" shall mean any person or persons on a pro rata basis with all other Municipalities which may be parties to the transaction with authorized to act on behalf of the Municipality by a written certificate signed on behalf of the respect thereto, together with any other proper and reasonable item of cost not specifically Municipality by the Mayor of the Municipality containing the specimen signature of each mentioned herein, whether incurred prior to or after the date of this Loan Agreement, (a) the such person, which Municipality shall also include the County acting in the capacity of a costs of payment of, or reimbursement for, acquisition, installation and financing of each municipal participant, which in the case of the County, such written certificate shall be such Improvement or Item of Equipment, including, but not limited to, advances or progress signed by the Director or Deputy Director of the Board of Chosen Freeholders, which form payments, installation costs, administrative costs and capital expenditures relating to of certificate is set forth as Exhibit B annexed hereto and incorporated by this reference installation, financing payments, sales taxes, excise taxes, costs of feasibility, herein. environmental and other reports, inspection costs, permit fees, filing and recordation costs, printing costs for all documents, reproduction and binding costs, fees and charges of the "Basic Loan Payments" shall mean the sum of money representing Trustee pursuant to the Bond Resolution, financing documents, legal fees and charges, principal and interest for each Improvement or Item of Equipment necessary to amortize financial, accounting and other professional consultant fees, the Initial Authority Financing Debt Service on the Series 2014 Bonds allocated to the Municipality and payable by the Fee for a particular Series of Bonds, all professional and consulting fees and charges of the Municipality on each Loan Payment Date, as set forth in Exhibit A annexed hereto and Authority and the County, costs of rating agencies, bond insurance, bond insurers or credit incorporated by this reference herein and as described in Section 3.1(a) herein and ratings, fees for the printing, execution, transportation and safekeeping of the Bonds, and redemption premium, if any, to the extent required to redeem the Bonds pursuant to Article any charges and fees in connection with any of the foregoing; (b) all other costs which the IV of the Bond Resolution. Municipality or the Authority shall be required to pay under the terms of any contract or contracts for any Improvement or the acquisition of any Item of Equipment, including, but "Bond" or "Bonds" shall mean, collectively, the Outstanding Bonds of the not limited to, the cost of insurance; (c) any sums required to reimburse the Municipality for Authority issued pursuant to Section 201 of the Bond Resolution, specifically, the not to advances made for any of the above items, or for any other costs incurred and for work exceed $18,000,000 County-Guaranteed Capital Equipment And Improvement Revenue done, which is properly chargeable to any Improvement or Item of Equipment; (d) deposits Bonds, Series 2014 and Refunding Bonds, if any. in any Fund or Account under the Bond Resolution, all as shall be provided in the Bond
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Resolution; and (e) such other expenses not specified herein as may be necessary or from the date of original issuance of the Series 2014 Bonds, whichever is later. Such incidental to the acquisition of any Improvement or Item of Equipment, the financing thereof interest and Principal Installments for such Series 2014 Bonds shall be calculated on the and the placing of the same in use and operation. Cost as defined herein shall be deemed assumption that no Bonds Outstanding at the date of calculation will cease to be to include (i) the costs and expenses incurred by any agent of the Authority or the Outstanding except by reason of the payment of each Principal Installment on the Principal Municipality for any of the above mentioned items and (ii) all costs and expenses incurred Installment Date. The calculations in the preceding sentence shall be made on the basis of by any agent of the County and the Authority in connection with the adoption, administration a 30-day month and 360-day year. and enforcement of this Loan Agreement and the County Guarantee, including, but not limited to, County Guarantee Costs. "Debt Service Fund" shall mean the Debt Service Fund created and established in Section 502 of the Bond Resolution. "County" shall mean the County of Middlesex, a public body politic and corporate of the State of New Jersey. "Debt Service Requirement" with respect to the next Interest Payment Date for the Series 2014 Bonds shall mean, (i) in the case of an Interest Payment Date on which "County Guarantee" shall mean the County's unconditional and irrevocable interest only shall be due, interest accrued and unpaid and to accrue to such date if such guarantee of the punctual payment of principal of and interest when due on the Bonds duly Principal Installment or Installments shall be deemed to accrue in the manner provided in adopted pursuant to section 37 of the Act, and specifically with respect to the Series 2014 clause (ii) of the definition of "Debt Service" set forth in Section 101 of the Bond Resolution, Bonds, duly adopted August 21, 2014 and entitled, "AN ORDINANCE AUTHORIZING and (ii) in the case of an Interest Payment Date on which both interest and a Principal THE GUARANTY BY THE COUNTY OF MIDDLESEX, STATE OF NEW JERSEY OF Installment or Installments shall be due, interest accrued and unpaid and to accrue to such THE PAYMENT OF PRINCIPAL OF AND INTEREST ON THE COUNTY- date plus the Principal Installment or Installments due on such date. The calculations in the GUARANTEED CAPITAL EQUIPMENT AND IMPROVEMENT REVENUE BONDS, preceding sentence shall be made on the basis of a 30-day month and 360-day year. ISSUED BY THE MIDDLESEX COUNTY IMPROVEMENT AUTHORITY IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $18,000,000 AND "Equipment" or "Item(s) of Equipment" shall mean the equipment AUTHORIZING A PUBLIC HEARING TO BE HELD THURSDAY, AUGUST 21, 2014 described in Exhibit A annexed hereto and incorporated by this reference herein purchased AT 7:00 P.M., AUTHORIZING PUBLICATION THEREOF, CONSENTING TO SUCH and acquired with the proceeds of the Series 2014 Bonds, including any equipment substituted or added pursuant to the terms of this Loan Agreement. FINANCING AND DETERMINING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH". "Event of Default" shall mean an event of default as defined in Section 7.1 hereof but not under the Bond Resolution. "County Guarantee Costs" shall mean all direct and indirect Costs and expenses of the County incurred with respect to its County Guarantee as defined in the "Favorable Opinion of Bond Counsel" shall mean an opinion of Bond County Guarantee Agreement, including amounts paid by the County pursuant to Sections Counsel, addressed to the Authority and the Trustee, to the effect that the action proposed 508 and 708 of the Bond Resolution, together with interest on such amounts at an interest to be taken is authorized or permitted by the Bond Resolution and the Act and will not rate equal to the County's cost of obtaining funds required to make such payments adversely affect the exclusion of interest on a Series of Bonds from gross income for (including, but not limited to, lost earnings on the investment of available funds used to purposes of Federal income taxation under section 103 of the Code. make such payments or the net interest cost of such Series of Bonds, whichever is higher, as shall be determined by the County), reasonable attorneys' fees and other costs arising "Fiduciary" or "Fiduciaries" shall mean the Trustee, the Paying Agent, the out of the required payment or expenses for the collection, enforcement and repayment Bond Registrar, or any or all of them, as may be appropriate. pursuant to the County Guarantee, together with interest accrued on such sum until the time of repayment to the County, but shall not include those costs and expenses incurred by the "Fiscal Year" shall mean the twelve (12) month fiscal period of the County in connection with curing a default under its Loan Agreement. Municipality, the County or the Authority, including any six-month transition year of the Municipality authorized pursuant to chapter 75 of the Laws of New Jersey of 1991. "Debt Service" for any period shall mean, as of any date of calculation, with respect to the Series 2014 Bonds, an amount equal to the sum of (i) the interest accruing "Fund" or "Funds" shall mean, as the case may be, each or all of the Funds during such period on such Bonds except to the extent such interest is to be paid from created and established in Section 502 of the Bond Resolution; provided, however, that deposits made from Bond proceeds into the Debt Service Fund, and (ii) that portion of each such Funds do not constitute "funds" in accordance with generally accepted accounting Principal Installment which would accrue during such period if such Principal Installment principles. were deemed to accrue daily in equal amounts from the immediately preceding Principal Installment Date or, if there should be no preceding Principal Installment Date, from a date "Guarantee Agreement" or "County Guarantee Agreement" shall mean one year (or such lesser period as shall be appropriate if Principal Installments shall the County Guarantee Agreement dated as of September 30, 2014, entered into by and become due more frequently than annually) preceding such Principal Installment Date or between the County and the Authority wherein the County has irrevocably and
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unconditionally guaranteed the punctual payment of the principal of and interest on the "Moody's" shall mean Moody's Investors Service, Inc., a corporation Series 2014 Bonds and setting forth the terms and conditions of the County Guarantee with organized and existing under the laws of the State of Delaware, and its successors and/or respect to the Series 2014 Bonds, as amended and supplemented. assigns, if any.
"Improvement" or "Improvements" shall mean the improvements "Municipal Account(s)" shall mean each of the account(s) created in the described in Exhibit A annexed hereto and incorporated by this reference herein undertaken Acquisition and Improvement Fund, Proceeds Fund and Debt Service Fund for each of the with the proceeds of the Series 2014 Bonds, including any improvements substituted or Municipalities in connection with the issuance of the Series 2014 Bonds into which moneys, added pursuant to the terms of this Loan Agreement. Proceeds, Series 2014 Bond proceeds and investment earnings, as applicable, allocable to the Municipality, shall be deposited pursuant to Article V of the Bond Resolution. "Initial Authority Financing Fee" shall mean the amount equal to $50,000 for the initial financing fee of the Authority, allocated to the Municipality based on the "Municipality" or "Municipalities" shall mean the Municipality as defined in percentage set forth in Exhibit A to each Loan Agreement, Lease Agreement or a the preamble hereof and, with respect to the Series 2014 Bonds, shall mean collectively all Supplemental Resolution authorizing a Series of Bonds. of the Municipalities, including the County, each of which have executed a Loan Agreement and/or Lease Agreement with the Authority for the purposes of undertaking improvements "Interest Payment Date" shall mean, with respect to the Series 2014 Bonds, or acquiring equipment, as applicable, with the proceeds of the Series 2014 Bonds, all of each March 15 and September 15, commencing March 15, 2015, and such other dates as which are situated in the County. shall be established by a Supplemental Resolution authorizing a Series of Bonds. In the event an Interest Payment Date is not a Business Day, interest shall be paid on the next "Operating Fund" shall mean the Operating Fund created and established succeeding Business Day for interest accrued to the Interest Payment Date. under Section 502 of the Bond Resolution.
“Lease Agreement” shall mean, with respect to the Series 2014 Bonds, "Ordinance" shall mean the ordinance duly adopted by the Municipality each or any Lease Agreement dated as of September 30, 2014, by and between the approving and authorizing the execution and delivery of this Loan Agreement and pledging Authority and any Municipality, as approved by the County, and any and all modifications, the full faith and credit of the Municipality for the repayment of its obligations under this alterations, amendments and supplements thereto made in accordance with the provisions Loan Agreement. thereof and the Bond Resolution. "Outstanding" when used with reference to Bonds, shall mean, as of any "Loan Agreement" shall mean, with respect to the Series 2014 Bonds, this date, Bonds theretofore or thereupon being authenticated and delivered under the Bond Loan and Security Agreement dated as of September 30, 2014, by and between the Resolution except: Authority and the Municipality, as approved by the County, and any and all modifications, alterations, amendments and supplements thereto made in accordance with the provisions (i) Bonds canceled by the Trustee at or prior to such date; hereof and the Bond Resolution. (ii) Bonds (or portions of Bonds) for the payment of which moneys, "Loan Payment" shall mean the Loan Payment consisting of Basic Loan equal to the principal amount or Redemption Price thereof, as the case may Payments payable on each Loan Payment Date and, as applicable, Additional Loan be, together with interest to accrue thereon to the date of maturity or Payments payable by the Municipality upon demand pursuant to Section 3.1(a) and (b) redemption date, shall be held in an irrevocable trust under the Bond hereof, respectively. Resolution and set aside for such payment or redemption (whether at or prior to the maturity date); provided that if such Bonds (or portion of Bonds) are to "Loan Payment Date" shall mean, with respect to the Series 2014 Bonds, be redeemed, notice of such redemption shall have been given as provided in each January 15 and July 15, commencing January 15, 2015, which dates shall not be later the Bond Resolution; than the first day of the second month immediately preceding each Interest Payment Date and Principal Installment Date, as applicable, and such other dates determined in (iii) Bonds in lieu of or in substitution for which other Bonds shall accordance herewith as may be set forth in a Supplemental Resolution authorizing a Series have been authenticated and delivered pursuant to Article III of the Bond of Bonds. In the event a Loan Payment Date is not a Business Day, the Loan Payment Resolution or Section 1206 of the Bond Resolution; and shall be made by the Municipality on the next succeeding Business Day. (iv) Bonds deemed to have been paid as provided in subsection 1 "Loan Term" shall mean the period during which this Loan Agreement or is or 2 of Section 1301 of the Bond Resolution. in effect as specified in Section 2.1 hereof. "Month" shall mean a calendar month.
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"Person" or "Persons" shall mean any individual, corporation, partnership, ARTICLE II joint venture, trust or unincorporated organization or a governmental agency or any political subdivision thereof. TERM OF LOAN; UNDERTAKING OF IMPROVEMENTS AND ACQUISITION OF EQUIPMENT "Principal Installment" shall mean, as of any date of calculation, and with respect to the Series 2014 Bonds, so long as any Series 2014 Bonds are Outstanding, (i) SECTION 2.1. Term of Loan. Subject to the provisions of Section 8.9 the principal amount of Series 2014 Bonds due on a certain future date for which no Sinking hereof, the Loan Term shall commence on the date of issuance and delivery of the Series Fund Installments have been established plus any applicable redemption premium thereon, 2014 Bonds by the Authority and shall terminate on the first date upon which no Series and (ii) any Sinking Fund Installments due on a certain future date for the Series 2014 2014 Bonds remain Outstanding and all Loan Payments due and owing hereunder by the Bonds, if any, plus the amount of the sinking fund redemption premium, if any, which would Municipality shall have been paid in full. The Loan Term shall be deemed to commence on be applicable upon redemption of the Series 2014 Bonds on such future date in a principal the date of issuance and delivery of the Series 2014 Bonds and end on the date specified in amount equal to such Sinking Fund Installments. Exhibit A annexed hereto.
"Principal Installment Date" shall mean with respect to the Series 2014 SECTION 2.2. Acquisition of Improvements or Items of Equipment. (a) Bonds, each September 15, commencing September 15, 2015, on which any Principal The Authority agrees to cause the Municipality to undertake or acquire each of the Installment shall become due and payable by the Authority. In the event a Principal Improvements or Items of Equipment specified in Exhibit A pursuant to the specifications Installment Date is not a Business Day, principal shall be paid on the next succeeding prepared by the Municipality. The Municipality agrees that it will be responsible for the Business Day for the Principal Installment payable on the Principal Installment Date. letting of contracts for the undertaking, purchase and installation of the Improvements or Items of Equipment and supervising the undertaking, installation and acceptance of the "Proceeds" shall mean any insurance, condemnation, performance bond, or Improvements or Items of Equipment. An Authorized Municipal Representative shall any other financial guaranty proceeds paid with respect to any Improvement or Item of execute and deliver to the Authority prior to the date of the original issuance of the Equipment, remaining after payment therefrom of all expenses incurred in the collection Series 2014 Bonds, a certificate certifying that the Municipality will use its best thereof. efforts to cause the undertaking, purchase, installation and requisition of the moneys for the payment of the Improvements and/or Equipment from the Municipal Account "Proceeds Fund" shall mean the Proceeds Fund created and established in the Acquisition and Improvement Fund in accordance with the following: the under Section 502 of the Bond Resolution. Municipality shall spend (i) fifteen (15%) percent of the Loan proceeds within six (6) months after the date of the original issuance of the Bonds; (ii) sixty (60%) percent of "Registered Owner" shall mean the owner of any Bond which is issued in the Loan proceeds within twelve (12) months after the date of original issuance of the fully registered form, as determined on the Record Date, as reflected on the registration Bonds; and (iii) one hundred (100%) percent of the Loan proceeds within eighteen books of the Authority which shall be kept and maintained on behalf of the Authority at the (18) months after the date of original issuance of the Bonds so as not to subject the principal institutional trust office of the Bond Registrar. Series 2014 Bonds to arbitrage rebate. The Municipality will also deliver to the Trustee the items required by the terms of this Loan Agreement and the Bond "Loan Payments", "Loan Payment(s)" or "Loan Payment" shall mean the Resolution to enable the Trustee to make the respective payments within said sum of Basic Loan Payments and Additional Loan Payments set forth in Section 3.1 hereof. eighteen (18) month period. In the event the Municipality does not spend all such moneys "Series 2014 Bonds" shall mean all of the Bonds authenticated and within eighteen (18) months of the date of issuance of the Series 2014 Bonds and in delivered upon original issuance pursuant to Section 203 of the Bond Resolution. accordance with the time periods and percentages specified in this Section 2.2(a) and such proceeds of the Series 2014 Bonds are deemed to have not been "spent" in accordance "Standard & Poor's" or "S&P" shall mean Standard & Poor's Ratings with the Code, the Municipality shall pay to the Authority as Additional Loan Payments the Services, a division of The McGraw-Hill Companies, Inc., a corporation organized and cost and expense of the performance of an arbitrage rebate calculation. The Municipality existing under the laws of the State of New York, and its successors and/or assigns, if any. shall also be required to pay any arbitrage rebate moneys to the Authority in the event the Municipality's failure to "spend" Bond proceeds attributable to such Municipality requires the "State" shall mean the State of New Jersey or any successor to its duties Authority to rebate money to the Internal Revenue Service. This obligation of the and functions. Municipality to pay to the Authority the cost and expense of the performance of an arbitrage rebate calculation and arbitrage rebate moneys shall survive the expiration of the Loan "Trustee" shall mean, with respect to the Series 2014 Bonds, TD Bank, Term and the final maturity of the Series 2014 Bonds. National Association, Cherry Hill, New Jersey and its successors or assigns or any other bank, trust company or national banking association appointed trustee pursuant to the Bond (b) Contracts in connection with the undertaking, purchase and installation Resolution. of each Improvement or Item of Equipment shall be let in accordance with all applicable competitive bidding laws, prevailing wage laws and public works contractor registration
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laws, as applicable. All such contracts shall have the same general form and content as allocated to such Improvement or Item of Equipment as indicated by Exhibit A annexed similar contracts let by the Municipality. hereto, the Municipality shall pay the balance of such moneys itself.
(c) The Loan proceeds shall be forwarded by the Trustee, on behalf of the SECTION 2.4. Application of Bond Proceeds. (a) Upon original issuance Authority, to the Municipality on the date of the original issuance of the Series 2014 Bonds. of the Series 2014 Bonds, Bond proceeds shall be applied as follows: to the Trustee (i) an amount equal to the accrued interest on the Series 2014 Bonds, if any, for deposit in each (d) In the event more than one Municipality fails to comply with the Municipal Account in the Debt Service Fund; (ii) the amount representing costs of issuance provisions of subsection (a) hereof regarding the eighteen-month rebate exception under on the Series 2014 Bonds, including the Initial Authority Financing Fee, for deposit in the the Code and the Series 2014 Bonds are subject to arbitrage rebate, all amounts to be Operating Fund and paid in accordance with Section 505(3) of the Bond Resolution; and (iii) rebated to the Internal Revenue Service by the Authority which are required hereunder to the remaining Series 2014 Bond proceeds shall be allocated to each Municipality and be paid by the Municipalities to the Authority as Additional Loan Payments shall be deposited into the respective Municipal Account in the Acquisition and Improvement Fund allocated in accordance with the pro rata basis set forth in Exhibit A hereto between all such and paid in accordance with Section 503 of the Bond Resolution. Municipalities. This obligation of each Municipality to pay to the Authority arbitrage rebate moneys and the cost and expense of the performance of an arbitrage rebate calculation (b) The Authority has in the Bond Resolution authorized and directed the shall survive the expiration of the Loan Term for all Improvements and Equipment and the Trustee to make a payment from the Municipal Account in the Acquisition and Improvement final maturity of the Series 2014 Bonds. Fund to the Municipality to pay the Cost of the Improvements and Equipment upon the date of the original issuance of the Series 2014 Bonds. (e) Additionally, any amount of the Loan proceeds utilized to pay any prior bonds, notes or other obligations of the municipality shall be utilized ONLY to currently (c) The Authority agrees to cooperate with the Municipality in furnishing to refund the prior bonds, notes or other obligations and the Municipality shall expend such the Trustee any documents required to effect payments out of the Municipal Account in the Loan proceeds for such purpose within ninety (90) days after the date of the original Acquisition and Improvement Fund in accordance with this Section 2.4 hereof. Such issuance of the Bonds. The Municipality shall file any and all tax documents, including the payment obligation of the Authority is subject to any provisions of the Bond Resolution IRS Form 8038-G, with the IRS memorializing the current refunding of such bonds, notes or requiring additional documentation with respect to such payments and shall not extend obligations. The Authority shall have no responsibility or liability with respect to any tax beyond the moneys in the Municipal Account in the Acquisition and Improvement Fund implications or the filing of tax documents associated with the current refunding of the prior available for payment under the terms of the Bond Resolution. bonds, notes or obligations issued by the Municipality and the Municipality shall indemnify and hold the Authority, the County or any other participating Municipality (including their (d) All interest earned or any gain realized on any moneys or investments members, officers, agents, professionals, servants or employees) harmless against, and the in the Municipal Accounts in the Acquisition and Improvement Fund, the Debt Service Fund Municipality shall pay any and all, liability, loss, cost, damage, claim, judgment or expense, or the Proceeds Fund shall (i) be transferred by the Trustee to the Operating Fund to pay of any and all kinds or nature arising out of such tax implications or tax filings. the amount equal to the Municipality’s pro rata share of Authority Administrative Expenses and County Guarantee Costs for each Bond Year, and (ii) following such transfer to the SECTION 2.3. Issuance of Series 2014 Bonds. (a) To provide funds for Operating Fund, if moneys remain, be transferred by the Trustee or remain in the Municipal payment of the Cost of the Improvements or Equipment, the Authority will use its best Account in the Proceeds Fund and shall be applied in accordance with the provisions of efforts to sell, issue and deliver the Series 2014 Bonds. The proceeds of the Series 2014 Section 507(6) of the Bond Resolution. Bonds shall be applied as provided for in the Bond Resolution. SECTION 2.5. Municipality's Liability. As between the Authority and the (b) The Municipality shall cooperate with the Authority in furnishing to the Municipality, the Municipality assumes liability for all risks of loss during the undertaking, Authority, the County and the Trustee all documents required to effectuate the transaction acquisition, delivery, installation and use of each Improvement or Item of Equipment. The contemplated herein, including the execution and delivery of certificates, resolutions, Municipality shall maintain, or shall demonstrate, to the satisfaction of the Authority, that opinions and disclosure materials necessary in connection therewith. adequate insurance or self-insurance is provided with respect to each Improvement or Item of Equipment, or require each contractor, manufacturer or supplier of each Improvement or (c) In the event moneys in the Municipal Account in the Acquisition and Item of Equipment to maintain, in force during the entire undertaking, construction, Improvement Fund allocated to each Improvement or Item of Equipment are not sufficient to acquisition, delivery and installation period of each Improvement or Item of Equipment, undertake such Improvement or purchase such Item of Equipment, the Municipality shall so property damage insurance in an amount not less than the full value of all work done and notify the Authority and the Trustee and the Municipality shall be obligated to pay the materials and equipment provided or delivered by each such manufacturer or supplier, balance of the Cost of such Improvement or Item of Equipment out of funds of the comprehensive liability insurance, worker's compensation insurance and other insurance Municipality legally available therefor. In the event the Municipality undertakes the required by law or customarily maintained with respect to like equipment or improvements. Improvement or acquires an Item of Equipment with a Cost greater than the moneys The existence of such insurance coverage shall be evidenced at the time the Improvement or Item of Equipment is undertaken or ordered by the Municipality.
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ARTICLE III SECTION 2.6. Disclaimer of Warranties. THE AUTHORITY, BY DELIVERY OF THIS LOAN AGREEMENT, MAKES NO WARRANTY OR LOAN PAYMENTS AND OTHER PAYMENTS REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR SECTION 3.1. Payment of Loan Payments. By execution hereof, the FITNESS FOR USE OF ANY IMPROVEMENT OR ITEM OF EQUIPMENT, OR Municipality agrees to repay to the Authority the Cost of all Improvements or Items of WARRANTY WITH RESPECT THERETO. The Municipality represents that the Authority Equipment undertaken or acquired by the Municipality with the proceeds of the Series 2014 has not participated in the drafting of specifications, the selection of a manufacturer or Bonds and Additional Loan Payments in connection therewith as follows: (a) The supplier or the award of the bid for any Improvement or Item of Equipment purchased by the Municipality shall pay to the Trustee at the address shown on Exhibit C annexed hereto and Municipality. In no event shall the Authority be liable for any damages, incidental, indirect, incorporated by this reference herein, or at such other address as the Municipality may from special, consequential or otherwise, in connection with or arising out of this Loan time to time be notified in accordance with Section 8.6 hereof, as Basic Loan Payments for Agreement or the existence, furnishing, maintenance, functioning or the Municipality's use the Improvements or Equipment, on each Loan Payment Date, an amount in accordance of any Improvement or Item of Equipment or products or services provided for in this Loan with the schedule of Basic Loan Payments described in Exhibit A, which, together with other Agreement. moneys and interest and investment earnings available therefor, if any, in the Municipal Account in the Debt Service Fund and the Municipal Account in the Proceeds Fund SECTION 2.7. Manufacturers' Warranties. The Municipality's sole pursuant to the provisions of this Loan Agreement and the Bond Resolution, will equal the remedy for the breach of such warranty, indemnification or representation shall be Municipality's Basic Loan Payments obligation which is to be applied to the payment of Debt against the manufacturer or supplier of such Improvement or Item of Equipment and Service due on the Series 2014 Bonds on the next succeeding Interest Payment Date and not against the Authority, nor shall such matter have any effect whatsoever on the Principal Installment Date, as applicable. Notwithstanding the above, in the event the rights of the Authority with respect to this Loan Agreement, including the right to Municipality shall fail to make Basic Loan Payments in accordance herewith, the Authority receive full and timely Loan Payments hereunder. The Municipality expressly shall have the option of requiring the Municipality to make Basic Loan Payments on a acknowledges that the Authority does not make, nor has it ever made, any representation or monthly or quarterly basis. warranty whatsoever as to the existence or availability of such warranties of the manufacturer or supplier of any Improvement or Item of Equipment. (b) The Municipality shall pay to the Trustee, as the same shall become due and payable at any time during the Loan Term, on any Loan Payment Date or thirty (30) days after written demand by the Trustee, such sums as represent Additional Loan Payments, including Authority Administrative Expenses and County Guarantee Costs as shall have been submitted by the Authority and the County to the Trustee and to an Authorized Municipal Representative as contained in a certificate executed by an Authorized Authority Representative or Authorized County Representative, as applicable.
(c) Attached hereto as Exhibit A is a Basic Loan Payments payment schedule for the Improvements or Items of Equipment to be undertaken or purchased, as applicable, by the Municipality on behalf of the Authority. The Authority shall deliver to the Municipality and the Trustee a certificate from time to time as necessary which reflects credits, if any, to be applied toward the Basic Loan Payments obligation of the Municipality in accordance with the provisions hereof and the Bond Resolution. In accordance with the Bond Resolution, the Municipality shall be notified annually in writing by the Trustee of the amounts arising from investment earnings, if any, but such amounts shall not be applied as a credit against Basic Loan Payment obligations of the Municipality and shall (i) be transferred by the Trustee to the Operating Fund to pay the amount equal to the Municipality’s pro rata share of Authority Administrative Expenses and County Guarantee Costs for each Bond Year, and (ii) following such transfer to the Operating Fund, if moneys remain, be transferred by the Trustee or remain in the Municipal Account in the Proceeds Fund and shall be applied in accordance with the provisions of Section 507(6) of the Bond Resolution. In the event a dispute arises between the Authority and the Municipality with respect to the amount of Basic Loan Payments due and owing by the Municipality, or the credits to be applied toward the Municipality's Basic Loan Payment obligation, such dispute shall be resolved by the Authority. The Trustee shall have no obligation with respect
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thereto, except that the Trustee will cooperate in providing account statements and deemed to relieve any insurance company which has issued a policy of insurance as may information with respect thereto. Notwithstanding any credits which may accrue to the be provided for in this Loan Agreement from its obligation to defend the Municipality, the Municipality during the Loan Term, the Municipality is obligated to pay all amounts Authority, the County and any other insured named in such policy of insurance in which constitute Basic Loan Payments and Additional Loan Payments which are due connection with claims, suits or actions covered by such policy. The Municipality agrees under this Loan Agreement as set forth in Exhibit A hereto. that it shall give the Authority, the Trustee and the County prompt notice, in writing, of the Municipality's actual or constructive knowledge of the filing of each such claim and the (d) Any Loan Payments pursuant to this Section 3.1 which are not paid by institution of each such suit or action. the Municipality on or before the due date thereof shall, from and after said due date, bear interest (to the extent permitted by law) at the highest rate per annum borne by any of the The Authority, on behalf of itself and the County, as applicable, agrees that it: Series 2014 Bonds until paid, time being of the absolute essence of this obligation. Any moneys owed by the Municipality pursuant to this paragraph shall constitute Additional Loan (i) shall give the Authorized Municipal Representative prompt Payments and shall be paid to the Trustee. notice in writing upon its actual or constructive knowledge of the filing of each such claim and the institution of each such suit or action; (e) All Basic Loan Payments and Additional Loan Payments by the Municipality shall be made in immediately available funds. (ii) shall not adjust, settle or compromise any such claim, suit or action; and (f) By execution hereof, the Municipality expressly acknowledges the Authority’s right to bring an action for immediate injunctive relief or other judicial (iii) shall permit the Municipality to assume full control of the proceedings to compel compliance and to enforce the Municipality's full and timely payment adjustment, settlement, compromise or defense of each such claim, suit or of Basic Loan Payments hereunder. action. Notwithstanding the foregoing, the Municipality shall keep the Authority and the County informed as to the progress of any suit, claim or SECTION 3.2. Indemnification of Authority and County. Both during the action, and the Municipality shall not reach a final settlement, adjustment or Loan Term and thereafter, the Municipality shall indemnify and hold the Authority and compromise without the Authority's and the County's, as applicable, prior County harmless against, and the Municipality shall pay any and all, liability, loss, cost, approval, which approval shall not be unreasonably withheld. damage, claim, judgment or expense, of any and all kinds or nature and however arising, other than as a result of the gross negligence or willful misconduct of the Authority or the Any cost incurred by the Authority for its own attorneys, experts' testimony County, their members, officers, agents, professionals, servants or employees, which the costs and any and all costs to defend the Authority or any of its directors, officials, Authority or County may sustain, be subject to or be caused to incur by reason of any claim, members, officers, agents, servants or employees with respect to matters arising hereunder suit or action based upon personal injury, death, or damage to property, whether real, shall be paid to the Trustee for the benefit of the Authority by the Municipality as an personal or mixed, or upon or arising out of contracts entered into by the Municipality Authority Administrative Expense constituting Additional Loan Payments under Section relating to the Improvements or Equipment, or the bidding or award thereof by the 3.1(b) hereof and shall be paid to the Authority by the Trustee in accordance with the Municipality, or arising out of the Authority's financing of the Improvement or Equipment, or provisions outlined in Section 505(3) of the Bond Resolution. arising out of the undertaking, acquisition, installation, use, operation or maintenance of the Improvement or Equipment pursuant to this Loan Agreement, or arising out of or caused by Any cost incurred by the County for its own attorneys, experts' testimony any untrue or misleading statement of a material fact relating to the Municipality in the costs and any and all costs to defend the County or any of its directors, officials, members, Official Statement of the Authority for the Bonds (the "Official Statement") or any omission officers, agents, servants or employees with respect to matters arising hereunder shall be of any material fact relating to the Municipality in the Official Statement. It is mutually paid to the Trustee for the benefit of the County by the Municipality as County Guarantee agreed by the Municipality and the Authority that none of the Authority, the County or their Costs constituting Additional Loan Payments under Section 3.1(b) hereof and shall be paid respective members, officers, agents, professionals, servants or employees shall be liable to the County by the Trustee in accordance with the procedures outlined in Section 505(3) in any event for any action performed under this Loan Agreement and that the Municipality of the Bond Resolution and the provisions outlined in Section 6 of the County Guarantee shall save the Authority and the County harmless from any claim or suit of whatsoever Agreement. nature arising hereunder except for such claims or suits arising as a result of the Authority's or the County's gross negligence or willful misconduct. This provision shall survive the end SECTION 3.3. Nature of Obligations of the Municipality. The Municipality of the Loan Term and the final maturity of the Series 2014 Bonds. shall be obligated to pay all amounts under this Loan Agreement which constitute Basic Loan Payments, and Additional Loan Payments, including Authority Administrative The Municipality, at its own cost and expense, shall defend any and all such Expenses and County Guarantee Costs, which amounts shall be sufficient to amortize Debt claims, suits and actions which may be brought or asserted against the Authority or the Service on the Series 2014 Bonds, to pay all costs of administering the program and to fulfill County, their respective members, officers, agents, professionals, servants or employees its payment obligations hereunder. The obligation of the Municipality to pay Loan relating to the performance of their obligations hereunder; but this provision shall not be Payments and to pay all other amounts provided for in this Loan Agreement and to
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perform its obligations under this Loan Agreement shall be absolute and unconditional, and such Loan Payments and other amounts shall be payable without SECTION 3.7. Assignment of Loan Payments by Authority. It is any rights of set-off, recoupment or counterclaim it might have against the Authority, understood that all of the Authority's rights to receive Loan Payments under this Loan the Trustee, the County or any other person. Agreement (except its right to payments pursuant to Section 3.2 hereof) are to be assigned by the Authority to the Trustee pursuant to the Bond Resolution for the benefit of the The Municipality will not terminate this Loan Agreement or be excused from Bondholders. performing its obligations hereunder or be entitled to any abatement of its obligation to pay Loan Payments or any other amounts hereunder for any cause including, without limiting The Municipality agrees to pay to the Trustee at its principal institutional trust the generality of the foregoing, any acts or circumstances that may constitute failure of office all Loan Payments payable by the Municipality to the Authority pursuant to this Loan consideration, failure of title, or frustration of purpose, or any damage to or destruction of Agreement (except payments made directly to the Authority pursuant to Section 3.2 hereof). the Improvement or Equipment, or the taking by eminent domain of title to or the right of Except as provided in this Section 3.7 and the Bond Resolution, the Authority shall not temporary use of all or any part of the Improvement or Equipment, or the failure of the assign this Loan Agreement or any payments under this Loan Agreement. Authority or the County to perform and observe any agreement or covenant, whether expressed or implied, or any duty, liability or obligation arising out of or connected with this Loan Agreement.
SECTION 3.4. Municipal Loan Payment Obligation. Notwithstanding anything in this Loan Agreement to the contrary, the cost and expense of the performance by the Municipality of its obligations under this Loan Agreement and the incurrence of any liabilities of the Municipality under this Loan Agreement, including, without limitation, the obligation for the payment of all Basic Loan Payments and Additional Loan Payments and all other amounts required to be paid by the Municipality under this Loan Agreement, and the reimbursement of the County for County Guarantee Costs, is a direct and general obligation for which the full faith and credit of the Municipality is hereby pledged, which obligation is not subject to municipal appropriation and, unless the Loan Payments and such other amounts required to be paid by the Municipality under this Loan Agreement are paid from other sources, the Municipality shall be obligated to levy ad valorem taxes on all taxable property within the Municipality without limitation as to rate or amount.
SECTION 3.5. Municipal Prepayment in the Event of Optional Redemption. In the event of the exercise of an optional redemption of the Series 2014 Bonds by the Authority, the Municipality shall be obligated to make prepayments in whole or in part of such payments due as aforesaid of Basic Loan Payments, together with interest accrued and to accrue and, as applicable, redemption premium, if any, to be paid on the applicable Series 2014 Bonds. The Trustee shall apply such prepayments in such manner consistent with the Authority's directives and with the provisions of the Bond Resolution.
Any such whole or partial prepayment of Basic Loan Payments by the Municipality shall be applied by the Trustee to the redemption of the Series 2014 Bonds and the Municipality shall be entitled to a credit for the principal amount of Series 2014 Bonds redeemed against the amount or amounts due under the provisions of Section 3.1(a) hereof to the extent such principal amount of Series 2014 Bonds is similarly credited pursuant to the Bond Resolution against Basic Loan Payments required to be made by the Municipality and deposited in the Municipal Account in the Debt Service Fund. SECTION 3.6. Nature of Obligations of the Authority. The cost and expense of the performance by the Authority of any of its obligations under this Loan Agreement shall be limited to the availability of the proceeds of Series 2014 Bonds of the Authority issued for such purposes or from other funds received by the Authority under this Loan Agreement and available for such purposes.
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ARTICLE IV ARTICLE V
LOAN TERM; RENEWAL COVENANTS OF MUNICIPALITY
SECTION 4.1. Loan Term for Improvement(s) or Item(s) of Equipment. SECTION 5.1. Maintenance of Improvements or Equipment by The Loan Term for all Improvements or Items of Equipment shall terminate when the Series Municipality. The Municipality agrees that at all times during each Loan Term for each 2014 Bonds are no longer Outstanding and when the Municipality shall have paid to the Improvement or Item of Equipment, the Municipality will, at the Municipality's own cost and Authority, County and Trustee all amounts due and owing pursuant to the provisions of this expense, maintain, preserve and keep such Improvement or Item of Equipment in good Loan Agreement. Except as set forth above, the Loan Term for all Improvements or Items repair, working order and condition, and that the Municipality will make or cause to be made of Equipment will not terminate for any reason, including all events specified in Sections 7.1 all necessary and proper repairs, replacements and renewals thereto. The Authority and and 7.2 hereof. the County shall have no responsibility in any of these matters, or for the making of improvements or additions to such Improvement or Item of Equipment. Notwithstanding the above, in the event a Municipality fails to comply with the provisions of this Loan Agreement, the Authority, County and Trustee may pursue remedies SECTION 5.2. Taxes, Other Governmental Charges and Utility Charges. in accordance with Article VII hereof. In the event the ownership, use, possession or acquisition of any Improvement or Item of Equipment is found to be subject to taxation in any form, the Municipality will pay during the SECTION 4.2. Effect of Noncompliance with Loan Agreement related Loan Term, as the same respectively come due, all taxes and governmental Provisions. Upon the occurrence of an event referred to in Section 7.1 hereof, the charges of any kind whatsoever that may at any time be lawfully assessed or levied against Municipality shall continue to be liable for (1) the payment of Basic Loan Payments and or with respect to any Improvement or Item of Equipment as well as all utility and other Additional Loan Payments scheduled to become due on any succeeding Loan Payment charges incurred in the operation, maintenance, use, preservation, occupancy and upkeep Date or upon demand, as applicable, (2) the payment of any general, special, incidental, of any Improvement or Item of Equipment; provided that, with respect to any governmental consequential or other damages resulting from such event of default and (3) any other loss charges that may lawfully be paid in installments over a period of years, the Municipality suffered by the Authority and the County as a result of the Municipality's failure to take such shall be obligated to pay only such installments as have accrued during the time the related actions as required. Loan Term is in effect.
SECTION 5.3. Provisions Regarding Insurance. At its own expense, the Municipality shall cause casualty, public liability and property damage insurance to be carried and maintained, or shall demonstrate, to the satisfaction of the Authority, that adequate self-insurance is provided with respect to each Improvement or Item of Equipment, sufficient in each case to replace such Improvement or Item of Equipment and to protect the Authority from liability under all circumstances. The Municipality shall provide evidence of such insurance to the Authority and Trustee at any time the same is requested by such Authority or Trustee. The Municipality agrees to maintain and the Authority agrees to accept evidence of blanket insurance coverage which applies to all loan agreements. The Municipality will provide a copy of a blanket insurance policy or policies to the Authority as evidence of such coverage at any time the same is requested by such Authority or Trustee. All insurance policies shall provide that the Authority and the Trustee shall be provided with notice of renewal, cancellation or material changes to such policy thirty (30) days prior thereto. If the Municipality maintains a program of self-insurance for similar properties, the Municipality may insure each Improvement or Item of Equipment in its self- insurance program and shall provide an adequate insurance fund to pay losses.
Any insurance policy maintained pursuant to this Section 5.3 shall be so written or endorsed as to make losses, if any, payable to the Municipality, the Authority, the Trustee and the County as their respective interests may appear.
SECTION 5.4. Advances. In the event the Municipality shall fail to maintain the full insurance coverage required by this Loan Agreement or shall fail to keep any Improvement or Item of Equipment in good repair and operating condition, the Authority
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may (but shall be under no obligation to) purchase the required policies of insurance and Equipment financed (or refinanced) with the proceeds of the Series 2014 Bonds paid to the pay the premiums on the same; and all amounts so advanced therefor by the Authority shall Municipality, to be used (directly or indirectly) in any manner that would constitute "private become immediately due and payable as Additional Loan Payments, which amounts, business use" within the meaning of section 141(b)(6) of the Code, nor (B) use (directly or together with interest at the highest rate permitted by law until paid, the Municipality agrees indirectly) any of the proceeds of the Series 2014 Bonds paid to the Municipality, to make or to pay to the Authority. finance loans to persons other than governmental units (as such term is used in section 141(c) of the Code). SECTION 5.5. Financial Reports. The Municipality covenants to provide annually to the Authority, the County and the Trustee in a reasonable time, but in no event (3) Neither the Municipality nor any of its officers or members shall, more than thirty (30) days after the same have been received by the Municipality (i) current pursuant to any arrangement, formal or informal, issue bonds in an amount related to the financial statements and budgets for the ensuing Fiscal Year and (ii) such other financial amount or for the purpose of payment of the Municipality's Loan Payments. information relating to the ability of the Municipality to continue to meet its obligations under this Loan Agreement as may be reasonably requested by the Authority and the County. (4) The County shall have no obligation under the County Guarantee to pay to the Authority on behalf of the Municipality any moneys that may be due and owing to SECTION 5.6. Performance Bonds and Other Guaranty. In the event an the Authority by the Municipality by reason of the Municipality's failure to comply with the advance, partial or progress payment is to be made with respect to any Improvement or provisions set forth in this Section 5.8 and Section 2.2 hereof. Item of Equipment, the Municipality shall cause the contractor or subcontractor qualified to do business in the State for such Improvement or Item of Equipment to provide a SECTION 5.9. Representations and Warranties of Municipality. The performance bond or bonds, a letter of credit or any other form of financial guaranty Municipality represents and warrants as follows: covering with respect to such Improvement or Item of Equipment (1) performance of the contract and (2) payment for labor and materials. (a) It is a public body corporate and politic duly organized and existing under the laws of the State of New Jersey, and is authorized and empowered to enter into Any performance bond or bonds, letter of credit or other form of financial the transactions contemplated by this Loan Agreement and to carry out its obligations guaranty shall be executed by a responsible surety company qualified to do business in the hereunder. By proper action of its governing body, it has duly authorized the execution and State and shall in each case be in an amount not less than one hundred percent (100%) of delivery of this Loan Agreement. the contract price. Any performance bond, letter of credit or other form of financial guaranty provided pursuant to this Section 5.6 shall be made payable to the Municipality and the (b) The execution and delivery of this Loan Agreement, and the Authority as their respective interests may appear. The Proceeds from any performance compliance with the provisions hereof, will not conflict with or constitute on the part of the bond provided pursuant to this Section 5.6 shall be paid over to the Trustee for deposit into Municipality a violation of, breach of or default under its by-laws or any statute, indenture, the Municipal Account in the Proceeds Fund and applied as a credit toward the Basic Loan mortgage, deed of trust, note agreement or other agreement or instrument to which the Payment obligations of the Municipality hereunder in accordance with the provisions of Municipality is bound, or, to the knowledge of the Municipality, any order, rule or regulation Section 507(1) and (2) of the Bond Resolution. of any court or governmental agency or body having jurisdiction over the Municipality or any of its activities or properties; and all consents, approvals, authorizations and orders of SECTION 5.7. Compliance with Laws. The parties to this Loan Agreement governmental or regulatory authorities which are required for the consummation of the agree to comply with all laws of the State applicable to the performance of this Loan transactions contemplated hereby have been obtained. Agreement. (c) There is no action, suit, proceeding or investigation at law or in equity SECTION 5.8. Covenant Not To Affect the Tax Exempt Status of the pending against the Municipality by or before any court or public agency, or, to the best of Series 2014 Bonds. (1) The Municipality covenants and agrees that it shall not take any the knowledge of the Municipality, any basis therefor, wherein an unfavorable decision, action or omit to take any action which would result in the loss of the exclusion of the ruling or finding would adversely affect the transactions contemplated hereby, or which in interest on any Series 2014 Bonds from gross income for purposes of Federal income any way would adversely affect the validity of this Loan Agreement, or any agreement or taxation as that status is governed by section 103(a) of the Code but only to the extent that instrument to which the Municipality is a party and which is used or contemplated for use in the Authority intended at the time of the original issuance of such Series 2014 Bonds that the consummation of the transactions contemplated hereby. the interest thereon be so excludable from gross income for purposes of Federal income taxation. (d) No legislation has been enacted which in any way adversely affects the execution and delivery of this Loan Agreement by the Municipality, or the creation, (2) Unless the Municipality receives the prior written approval of the organization or existence of the Municipality or the titles to office of any officers thereof, or Authority, the Municipality shall neither (A) permit any of either (i) the proceeds (such term the power of the Municipality to carry out its obligations under this Loan Agreement. to have the same meaning as when used in section 141(b) of the Code) of the Series 2014 Bonds paid to the Municipality for the Improvement or Equipment or (ii) the Improvement or
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(e) Except as otherwise disclosed in the Official Statement pertaining to and carry out the provisions of a Continuing Disclosure Agreement with the Authority (the the offering and sale of the Series 2014 Bonds, the Municipality is not a party to any "Continuing Disclosure Agreement"), which will set forth the obligation of the Municipality to indenture, loan or credit agreement or any other agreement, resolution, contract, file budgetary, financial and operating data on an annual basis and notices of certain instrument, pension plan, pension trust, employee benefit or welfare plan, or subject to any enumerated events as required to comply with and in accordance with the provisions of the restriction which may reasonably be expected to have an adverse effect on its properties, Rule. Notwithstanding any other provision of this Loan Agreement, the failure of the assets, operations or conditions, financial or otherwise, or on its ability to carry out its Municipality to comply with the provisions of the Continuing Disclosure Agreement shall not obligations under this Loan Agreement. constitute an event of default pursuant to Article VII hereof and the Beneficial Owner of the Bonds (as defined in the Continuing Disclosure Agreement) may take such actions as set SECTION 5.10. Municipal Notice: Appropriation for Loan Payments. The forth in the Continuing Disclosure Agreement as may be necessary and appropriate to Municipality shall provide to the Authority, the Chief Financial Officer of the County or its cause the Municipality to comply with its obligations set forth under this Section 5.12 and in designee and the Trustee on an annual basis as long as the County Guarantee is in effect the Continuing Disclosure Agreement. and any Debt Service payments on the Series 2014 Bonds attributable to the Municipality remain Outstanding, within five (5) Business Days after the adoption of a temporary budget and/or the filing of the annual budget as introduced by the Municipality with the Division of Local Government Services, a certificate of the Chief Financial Officer of the Municipality certifying that the temporary budget and/or the annual budget contains a line item which represents an amount due under this Loan Agreement for all Loan Payments due during the Municipality's Fiscal Year. Such certificate shall have attached a copy of the page of the temporary budget and/or the budget on which the line item appears. The Municipality shall also provide to the Trustee, Authority and the Chief Financial Officer of the County or its designee, within five (5) Business Days thereof, notice of any revisions to such line item or the transfer of any moneys out of such line item. In the event such certificate described in the first sentence of this Section 5.10 is not received by the Trustee within sixty (60) days following the beginning of the Municipality's Fiscal Year or the Trustee otherwise has actual knowledge that the Municipality has revised its budget or transferred money out of a line item, the Trustee shall notify the Authority and the Chief Financial Officer of the County or its designee of such event(s) and the Authority and the County may take immediate action to cause all Loan Payments to be timely paid by the Municipality. For the purposes of this provision, the Trustee shall be deemed to have actual knowledge only if an officer of the institutional trust department of the Trustee has actual knowledge thereof.
By execution hereof, the Municipality expressly acknowledges the County's right to bring an action for immediate ex parte injunctive relief or other judicial proceeding to compel the Municipality to provide an appropriation for Loan Payments due under this Loan Agreement.
The Municipality shall also notify the Trustee, the Authority and the County of any change in the Fiscal Year of the Municipality within ten (10) Business Days of the adoption of the authorization therefor by the governing body of the Municipality.
SECTION 5.11. Third Party Beneficiaries. The Municipality and Authority by the execution hereof acknowledge that the covenants, representations and warranties set forth herein are for the benefit of the Trustee and the County.
SECTION 5.12. Secondary Market Disclosure. If, as determined by the Authority in its sole discretion, the Municipality is an Obligated Person as such term is defined in Rule 15c2-12 promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 (the "Rule"), the Municipality covenants and agrees that as an Obligated Person pursuant to the Rule that it will execute, deliver, comply with
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ARTICLE VI ARTICLE VII
TITLE EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Title To Improvement and Equipment. During the Loan SECTION 7.1. Events of Default. An "event of default" or a "default" shall Term and thereafter, title to the Improvement and Equipment and any and all additions, mean, whenever used in this Loan Agreement, any one or more of the following events: repairs, replacements or modifications thereto shall be in the name of the Municipality. (a) Failure by the Municipality to pay or cause to be paid when due the payments to be paid under Section 3.1(a) hereof;
(b) Failure by the Municipality to pay when due any payment to be made under this Loan Agreement (other than payments under Section 3.1(a) hereof) which failure shall continue for a period of thirty (30) days after written notice thereof, specifying such failure and requesting that it be remedied, is given to the Municipality by the Authority, the County or the Trustee;
(c) Failure by the Municipality to observe and perform any covenant, condition or agreement on its part to be observed or performed (other than as referred to in subsections (a) and (b) of this Section 7.1), which failure shall continue for a period of sixty (60) days after written notice, specifying such failure and requesting that it be remedied, is given to the Municipality by the Authority or the Trustee, unless the notifying party shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, the notifying party will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the Municipality within the applicable period and diligently pursued until the default is remedied; provided that, the failure of the Municipality to comply with the provisions of Section 5.12 hereof or the Continuing Disclosure Agreement shall not constitute an event of default hereunder; or
(d) The filing of a petition by the Municipality under any Federal or state bankruptcy or insolvency law or other similar law in effect on the date of this Loan Agreement or thereafter enacted; or the Municipality shall become insolvent or bankrupt or make an assignment for the benefit of its creditors; or a custodian (including, without limitation, a receiver, liquidator or trustee) of the Municipality or any of its property or assets shall be appointed by court order or take possession of the Municipality or its property or assets if such order remains in effect or if such possession continues for more than thirty (30) days.
The foregoing provisions of subsection (c) of this Section 7.1 are subject to the following limitations: if by reason of acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the government of the United States or of the State or any department, agency, political subdivision (not including the County or the Municipality) or official of either of them, or any civil or military authority; insurrections; riots; epidemics; landslides; lightning; earthquakes; fires; hurricanes; tornadoes, blizzards, or other storms; floods; washouts; droughts; arrests; restraint of government and people; civil disturbances; explosions; breakage or accident to machinery;
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partial or entire failure of utilities; or any cause or event not reasonably within the control of (including reasonable attorneys' fees paid or incurred) and County Guarantee Costs, where the Municipality, the Municipality is unable, in whole or in part, to carry out its agreements applicable, and such acceleration under this Loan Agreement is rescinded, the Trustee shall herein contained, the Municipality shall not be deemed to be in default during the waive the Municipality's default without further action by the Authority and the Authority and continuance of such inability. The Municipality agrees, however, to use its best efforts to the Trustee shall be restored to their former positions and rights under the Bond Resolution remedy with all reasonable dispatch the cause or causes preventing it from carrying out its and this Loan Agreement. Upon such payment and waiver, this Loan Agreement shall be agreements; provided, that the settlement of strikes, lockouts and other disturbances shall fully reinstated as if it had never been accelerated. No such restoration of the Authority and be entirely within the discretion of the Municipality, and the Municipality shall not be required the Trustee shall extend to or affect any subsequent default under the Bond Resolution or to make settlement of strikes, lockouts and other disturbances by acceding to the demands impair any right consequent or incidental thereto. of opposing party or parties when such course is in the judgment of the Municipality unfavorable to the Municipality. SECTION 7.4. Payments by County. (a) If an event of default referred to in Section 7.1 (a) hereof shall have happened and be continuing and there remains Notwithstanding the above, an Event of Default under this Article VII shall not outstanding Basic Loan Payments which have not been paid to the Trustee pursuant to the be construed as an Event of Default under the Bond Resolution. terms of this Loan Agreement (which determination shall be made by the Trustee as at the close of business on any Loan Payment Date), the Trustee, on behalf of the Authority, shall SECTION 7.2. Remedies. Whenever any Event of Default referred to in notify the nonpaying Municipality, the Authority and the Chief Financial Officer of the County Section 7.1 hereof shall have happened and be continuing, any one or more of the following or its designee, in writing not later than 3:00 p.m. of the second Business Day after such remedial steps may be taken, provided that, where applicable, written notice of the default Loan Payment Date, of the failure of the Municipality to pay its Basic Loan Payments on the has been given to the Municipality by the Authority or by the Trustee and the default has not Loan Payment Date, which notice shall state the amount of any such deficiency as at the been cured: close of business on the Loan Payment Date, the identity of the defaulting Municipality, the date by which the deficiency must be cured by the Municipality (which date shall not be later (a) the Authority may accelerate the Loan Payments owed by the than thirty (30) days before the next ensuing Interest Payment Date and Principal Municipality, holding the Municipality liable for all Loan Payments and other Installment Date, as applicable). If the nonpayment of the Municipality is not cured thirty amounts due to the Authority under the terms of this Loan Agreement, (30) days prior to the applicable Interest Payment Date and Principal Installment Date in including, but not limited to, County Guarantee Costs to the extent the County accordance with the provisions of such notice, the Trustee shall so notify the County in remains unreimbursed therefor; and writing and the County shall pay to the Trustee not later than two (2) Business Days prior to such Interest Payment Date and Principal Installment Date, as applicable, any and all (b) the Authority and the County may take whatever action at law amounts in immediately available funds required to pay Debt Service on the Series 2014 or in equity which may appear necessary or desirable to collect the payments Bonds allocable to such Municipality for such Interest Payment Date and Principal then due and thereafter to become due, or to enforce the performance and Installment Date, as applicable. Notwithstanding the above, the Authority and the Trustee observance of any obligation, agreement or covenant of the Municipality shall undertake all diligent efforts to pursue the Municipality and cause it to pay all amounts under this Loan Agreement. due and owing to the Authority and the County, as applicable, under this Loan Agreement prior or subsequent to an Interest Payment Date and Principal Installment Date. Any amounts collected pursuant to actions taken under subsections (a) and (b) of this Section 7.2 shall be applied in accordance with the provisions of the Bond (b) The County shall take all actions necessary and permitted by Resolution. If the Bond Resolution has been discharged and the County fully reimbursed law, which actions may include ex parte actions, to make payment of an amount equal to for County Guarantee Costs and all costs of the Authority, if any, shall have been paid, any the deficiency owed by any nonpaying Municipality, which amount, when added to available remaining amounts collected pursuant to actions taken under subsection (b) of this Section amounts on deposit in such nonpaying Municipality's Municipal Account in the Debt Service 7.2 shall be paid to the Municipality by the Trustee. Fund, shall be sufficient to pay the principal of and interest on the Bonds due on the next ensuing Interest Payment Date and Principal Installment Date, as applicable. SECTION 7.3. Reinstatement. Notwithstanding the provisions of Sections 4.1, 4.2 and 7.2 hereof, if, after the acceleration of the Loan Payments upon occurrence of (c) Any amounts so paid by the County to the Trustee to cure any an event of default, all arrears of interest on such overdue Loan Payments and the Loan deficiency in the Debt Service Fund with respect to any nonpaying Municipality pursuant to Payments which have become due and payable otherwise than by acceleration, and all the County Guarantee shall be reimbursed by the Municipality pursuant to the provisions of other sums payable under this Loan Agreement, except Loan Payments due and payable the Ordinance authorizing the execution of this Loan Agreement and Section 3.4 hereof, as a result of acceleration, shall have been paid by or for the account of the Municipality or including County Guarantee Costs. provision satisfactory to the Trustee shall have been made, all other things shall have been performed in respect of which there was a default or provision deemed by the Trustee to be (d) The Trustee shall promptly notify the Authority and the County adequate shall be made therefor and there shall have been paid the reasonable fees and of any delinquent Basic Loan Payments received by the Trustee from the Municipality at expenses, including Additional Loan Payments, Authority Administrative Expenses any time after a Loan Payment Date, but prior to an Interest Payment Date and Principal
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Installment Date, as applicable, which notice shall be received by the Authority and the ARTICLE VIII County not later than two (2) Business Days after receipt of any such payments. MISCELLANEOUS (e) Notwithstanding the provisions of subsection (a) above, in the event the Municipality forwards a Basic Loan Payment to the Trustee subsequent to an SECTION 8.1. Successors and Assigns. This Loan Agreement shall inure Interest Payment Date and Principal Installment Date, as applicable, but before the next to the benefit of the Municipality, the Authority, the County, the Trustee and their respective succeeding Interest Payment Date and Principal Installment Date, as applicable, and to the successors and assigns and shall be binding upon the Municipality and the Authority and extent the County has made a payment with respect thereto and has incurred County their respective successors and assigns. Guarantee Costs, then pursuant to Sections 508, 708 and 709 of the Bond Resolution, the County shall be entitled to receive such late Basic Loan Payments payment immediately SECTION 8.2. Severability. In the event any provision of this Loan upon deposit of such moneys in the Municipal Account in the Debt Service Fund and the Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, Trustee shall pay such late Basic Loan Payment to the County free and clear of the lien and such holding shall not invalidate or render unenforceable any other provision hereof. pledge of the Bond Resolution; provided, however, the County shall have the option of determining whether such late Basic Loan Payment shall be applied to the payment of SECTION 8.3. Amendments, Changes and Modifications. Except as Basic Loan Payments of the Municipality on the next succeeding Interest Payment Date and otherwise provided in this Loan Agreement or in the Bond Resolution, subsequent to the Principal Installment Date, as applicable. An Authorized County Representative shall direct issuance of the Series 2014 Bonds and prior to payment or provision for the payment of all the Trustee in writing as to the application of such late Loan Payment. Series 2014 Bonds in full and any other obligations incurred by the Authority to pay the Cost of Improvements or Equipment, including interest, premiums and other charges, if any, (f) If the Authority has received moneys from whatever source for thereon, and payment or provision for the payment of Authority Administrative Expenses a Loan Payment pursuant to Section 7.2 hereof and (i) the County has incurred County and County Guarantee Costs, this Loan Agreement may not be amended, changed, Guarantee Costs pursuant to subsection 7.4(a) hereof, which payments have not been modified, altered or terminated so as adversely to affect the interests of the holders of the reimbursed by the Municipality, and (ii) there are moneys remaining and available in any Series 2014 Bonds without the prior written consent of the County and the holders of at Fund or Account under the Bond Resolution when all Loan Terms expire and the Series least fifty-one percent (51%) in aggregate principal amount of the Series 2014 Bonds then 2014 Bonds are no longer Outstanding, then, pursuant to Section 511 of the Bond Outstanding; provided, further, that no such amendment, change, modification, alteration or Resolution, the Trustee shall pay over to the County all amounts due and owing to the termination will reduce the percentage of the aggregate principal amount of the Outstanding County for County Guarantee Costs to the extent moneys are legally available therefor Series 2014 Bonds, the consent of the holders of which is required for any such under the Bond Resolution. amendment, change, modification, alteration or termination or decrease the amount of any payment required to be made under this Loan Agreement or extend the time of payment SECTION 7.5. No Remedy Exclusive. No remedy herein conferred upon or thereof. This Loan Agreement may be amended, changed, modified and altered without the reserved to the Authority, the County or the Trustee is intended to be exclusive of any other consent of the holders of Series 2014 Bonds (but with the prior written consent of the available remedy or remedies, but each and every such remedy shall be cumulative and County) to provide necessary changes only to cure any ambiguity, correct or supplement shall be in addition to every other remedy given under this Loan Agreement or now or any provision contained herein which may be defective or inconsistent with any other hereafter existing at law or in equity or by statute. No delay or omission to exercise any provisions contained herein or to provide other changes which will not adversely affect the right or power accruing upon any default shall impair any such right or power or shall be interests of such holders. No other amendment, change, modification, alteration or construed to be a waiver thereof, but any such right and power may be exercised from time termination of this Loan Agreement shall be made other than pursuant to a written to time and as often as may be deemed expedient. In order to entitle the Authority, the instrument signed by an Authorized Authority Representative and the Municipality and County or the Trustee to exercise any remedy reserved to it in this Article VII, it shall not be consented to in writing by the County and in accordance with the Bond Resolution and this necessary to give any notice, other than such notice as may be herein expressly required. Loan Agreement. Copies of any amendments to this Loan Agreement shall be filed with the County and the Trustee. SECTION 7.6. No Additional Waiver Implied By One Waiver. In the event any agreement contained in this Loan Agreement should be breached by either party and For all purposes of this Section 8.3, the Trustee shall be entitled to rely upon thereafter waived by the other party, such waiver shall be limited to the particular breach so a Favorable Opinion of Bond Counsel, which Bond Counsel shall be satisfactory to the waived and shall not be deemed to waive any other breach hereunder. Trustee, with respect to the extent, if any, as to which any action adversely affects the interests of the County or any holders of Series 2014 Bonds then Outstanding.
SECTION 8.4. Amounts Remaining under Bond Resolution. Upon expiration of the Loan Term, it is agreed by the parties hereto that any amounts remaining in any Fund or Account created under the Bond Resolution, after payment in full of the Series 2014 Bonds (or provision for payment thereof having been made in accordance with
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the provisions of the Bond Resolution) and the fees, charges and expenses of the IN WITNESS WHEREOF, the Authority has caused this instrument to be Fiduciaries, the County and the Authority in accordance with the Bond Resolution and this signed by its Chairman as its duly authorized officer and its official seal to be hereunto Loan Agreement, shall belong to and be paid to the Municipality pursuant to Section 511 of affixed and the Municipality has caused this instrument to be executed in its name by its the Bond Resolution. Notwithstanding the above, if the Series 2014 Bonds shall have been Mayor and its official seal to be hereunto affixed, all as of the day and year first above defeased in accordance with Section 1301 of the Bond Resolution, any moneys held by a written. Fiduciary in trust for the payment and discharge of any Bonds that remain unclaimed for five (5) years (or such other time period as may be set forth at N.J.S.A. 46:30B-37) shall be Witness as to the Middlesex MIDDLESEX COUNTY IMPROVEMENT repaid by the Fiduciary to the State Treasurer in accordance with the provisions of N.J.S.A. County Improvement Authority AUTHORITY 46:30B-1 et seq., free and clear of the lien created by the Bond Resolution.
SECTION 8.5. Counterparts. This Loan Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall ______constitute but one and the same instrument. JACQUE EAKER, LEONARD J. ROSEMAN, Secretary/Treasurer Chairman SECTION 8.6. Notices and Demands. All notices, demands or other communications provided for in this Loan Agreement shall be in writing and shall be delivered personally, by facsimile transmission (with written confirmation of receipt) in (SEAL) accordance herewith and sent by certified or registered mail, personal delivery or recognized overnight delivery to (i) the Municipality at «FIELD3», «FIELD4», New Jersey Witness as to the Municipality «FIELD1» OF «FIELD2» «FIELD5», Attn: «FIELD6», (ii) the Authority at 101 Interchange Plaza, Cranbury, New Jersey 08512, Attn: Chairman, (iii) Bond Counsel to the Authority, Wilentz, Goldman & Spitzer, P.A., 90 Woodbridge Center Drive, P.O. Box 10, Woodbridge, New Jersey 07095- 0958, Attention: Anthony J. Pannella, Esq., (iv) the Trustee at 1006 Astoria Boulevard, ______Cherry Hill, New Jersey 08034, Attn: Institutional Trust Department/Kelly M. Bekas, (v) the County at the Middlesex County Administration Building, John F. Kennedy Square, 75 Bayard Street, New Brunswick, New Jersey 08901, Attn: Clerk of Board of Chosen Freeholders and the Chief Financial Officer of the County and (vi) Office of County Counsel, (SEAL) Middlesex County Administration Building, John F. Kennedy Square, 75 Bayard Street, New Brunswick, New Jersey 08901, Attn: Thomas F. Kelso, Esq., or to such other representatives or addresses as the Authority, the Municipality, the Trustee or the County APPROVED AND ACCEPTED: may from time to time designate by written notice to the parties hereto or beneficiaries COUNTY OF MIDDLESEX hereof.
SECTION 8.7. Headings. The Article and Section headings in this Loan ______Agreement are inserted for convenience of reference only and are not intended to define or RONALD G. RIOS, limit the scope of any provision of this Loan Agreement. Director Board of Chosen Freeholders SECTION 8.8. Non-Waiver. It is understood and agreed that nothing contained in this Loan Agreement shall be construed as a waiver on the part of the parties, or any of them, of any right not explicitly waived in this Loan Agreement.
SECTION 8.9. Survival of Loan Agreement. Notwithstanding anything else to the contrary herein, the provisions of Sections 2.2(a) and (d), 3.2 and 6.1 shall survive the expiration of the Loan Term and the final maturity of the Series 2014 Bonds.
SECTION 8.10. Governing Law. This Loan Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey.
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EXHIBIT A EXHIBIT B
2014 CAPITAL EQUIPMENT AND IMPROVEMENT FINANCING PROGRAM CERTIFICATE AS TO AUTHORIZED MUNICIPAL REPRESENTATIVE DESCRIPTION OF VARIOUS CAPITAL IMPROVEMENTS AND EQUIPMENT AND ANNUAL LOAN PAYMENTS I, ______, the duly elected/appointed and acting ______of the ______of ______, in the County of Middlesex (the "Municipality"), a municipal corporation of the State of New Jersey, DO HEREBY CERTIFY SEE ATTACHED SCHEDULE A that I am duly authorized under the Loan Agreement (as hereinafter defined) to execute and deliver this certificate on behalf of the Municipality. I DO HEREBY FURTHER CERTIFY as follows:
1. ______is the ______of the Municipality.
2. ______is the ______of the Municipality.
3. The following individual(s) have each been designated as Authorized Municipal Representatives in accordance with the provisions of the Loan Agreement and each are duly qualified, empowered and authorized so to act on behalf of the Municipality and to deliver documents on behalf of the Municipality.
Name Signature
______
______
Capitalized terms used herein and not otherwise defined shall have the same meanings ascribed thereto in a Loan and Security Agreement dated as of September 30, 2014 by and between the Middlesex County Improvement Authority and the Municipality and approved by the County of Middlesex (the "Loan Agreement").
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of ______, 2014.
______OF ______
______Name: Title:
A-1 B-1 #7577327.1(104875.111) #7577327.1(104875.111)
EXHIBIT C
The name/address/phone number of the Trustee is:
TD Bank, National Association 1006 Astoria Boulevard Cherry Hill, New Jersey 08034 Attention: Institutional Trust Department/Kelly M. Bekas
Phone number: (856) 685-5144 Fax number: (856) 685-5267 Email: [email protected]
Fed-Wire Instructions:
TD Bank, National Association ABA Number ______Trustee Clearing Account Number: ______Reference: MCIA 2014 - («FIELD1» OF «FIELD2») Attention: Kelly M. Bekas
C-1 #7577327.1(104875.111)
APPENDIX F
FORM OF THE LEASE AND AGREEMENT
[ THIS PAGE INTENTIONALLY LEFT BLANK ]
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND GENERAL PROVISIONS ...... 2 Section 1.1 Definitions ...... 2
ARTICLE II LEASE OF EQUIPMENT; TERM OF LEASE; ACQUISITION OF EQUIPMENT ...... 11 Section 2.1 Lease of Equipment ...... 11 Section 2.2 Term of Lease ...... 11 Section 2.3 Acquisition of Items of Equipment ...... 11 2014 CAPITAL EQUIPMENT AND IMPROVEMENT FINANCING PROGRAM Section 2.4 Issuance of Series 2014 Bonds ...... 13 Section 2.5 Application of Bond Proceeds ...... 14 Section 2.6 Municipality's Liability ...... 16 Section 2.7 Possession and Enjoyment ...... 16 LEASE AND AGREEMENT Section 2.8 Authority Access to Equipment ...... 17 Section 2.9 Disclaimer of Warranties ...... 17 BY AND BETWEEN Section 2.10 Manufacturers' Warranties ...... 17
MIDDLESEX COUNTY IMPROVEMENT AUTHORITY ARTICLE III RENTALS AND OTHER PAYMENTS ...... 19 Section 3.1 Payment of Rentals ...... 19 Section 3.2 Indemnification of Authority and County ...... 20 AND Section 3.3 Nature of Obligations of the Municipality ...... 22 Section 3.4 Municipal Lease Payment Obligation ...... 22 «FIELD1» OF «FIELD2» Section 3.5 Municipal Prepayment in the Event of Optional Redemption ...... 22 Section 3.6 Nature of Obligations of the Authority ...... 23 IN THE COUNTY OF MIDDLESEX, STATE OF NEW JERSEY Section 3.7 Assignment of Rental Payments by Authority ...... 23 ARTICLE IV LEASE TERM; RENEWAL ...... 24 Section 4.1 Lease Term for Item(s) of Equipment ...... 24 Section 4.2 Effect of Noncompliance with Lease Provisions ...... 24 DATED AS OF SEPTEMBER 30, 2014 ARTICLE V COVENANTS OF MUNICIPALITY ...... 26 Section 5.1 Maintenance of Equipment by Municipality ...... 26 Section 5.2 Taxes, Other Governmental Charges and Utility Charges ...... 26 Section 5.3 Provisions Regarding Insurance ...... 26 Section 5.4 Damage, Destruction or Condemnation ...... 27 Section 5.5 Insufficiency of Proceeds ...... 28 Section 5.6 Advances ...... 28 Section 5.7 Financial Reports ...... 28 Section 5.8 Performance Bonds and Other Guaranty ...... 28 Section 5.9 Net Lease ...... 29 Section 5.10 Compliance with Laws ...... 29 Section 5.11 Covenant Not To Affect the Tax Exempt Status of the Series 2014 Bonds...... 29
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TABLE OF CONTENTS (continued) TABLE OF CONTENTS (continued)
PAGE PAGE Section 5.12 Representations and Warranties of Municipality...... 30 EXHIBITS Section 5.13 Municipal Notice: Appropriation for Lease Payments ...... 30 Section 5.14 Third Party Beneficiaries ...... 31 Exhibit A Description of Leased Equipment and Annual Lease Section 5.15 Secondary Market Disclosure ...... 31 Payments (with attached Basic Rent schedules) ...... A-1 Exhibit B Acceptance Certificate ...... B-1 ARTICLE VI TITLE ...... 33 Exhibit C Requisition for Advance/Partial Payments ...... C-1 Section 6.1 Title To Equipment ...... 33 Exhibit D Intentionally Omitted ...... D-1 Section 6.2 Liens ...... 33 Exhibit E Requisition for Equipment ...... E-1 Section 6.3 Personal Property ...... 33 Exhibit F Certificate as to Authorized Municipal Representative ...... F-1 Section 6.4 Use of the Equipment ...... 33 Exhibit G Certificate for Substitution of Equipment ...... G-1 Exhibit H Requisition in the Event the Cost of an Item of ARTICLE VII EVENTS OF DEFAULT AND REMEDIES ...... 34 Equipment Exceeds the Amount Financed ...... H-1 Section 7.1 Events of Default ...... 34 Exhibit I Name/Address/Phone No. of Trustee ...... I-1 Section 7.2 Remedies ...... 35 Section 7.3 Reinstatement ...... 36 Section 7.4 Payments by County ...... 36 Section 7.5 No Remedy Exclusive ...... 38 Section 7.6 No Additional Waiver Implied By One Waiver ...... 38 ARTICLE VIII SALE, ASSIGNMENT, SUBLEASING AND SUBSTITUTION; CONVEYANCE OF EQUIPMENT TO MUNICIPALITY ...... 39 Section 8.1 Sale, Assignment, Subleasing or Substitution by Municipality ...... 39 Section 8.2 Option to Purchase Equipment ...... 40 Section 8.3 Date of Settlement ...... 40
ARTICLE IX MISCELLANEOUS ...... 41 Section 9.1 Surrender of Possession ...... 41 Section 9.2 Successors and Assigns ...... 41 Section 9.3 Severability ...... 41 Section 9.4 Amendments, Changes and Modifications ...... 41 Section 9.5 Amounts Remaining under Bond Resolution ...... 42 Section 9.6 Counterparts ...... 42 Section 9.7 Notices and Demands ...... 42 Section 9.8 Headings ...... 43 Section 9.9 Non-Waiver ...... 43 Section 9.10 Survival of Lease ...... 43 Section 9.11 Governing Law ...... 43
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THIS LEASE AND AGREEMENT, dated as of September 30, 2014 by and ARTICLE I between the Middlesex County Improvement Authority (hereinafter, the "Authority") and the «FIELD7» of «FIELD8», in the County of Middlesex, State of New Jersey DEFINITIONS AND GENERAL PROVISIONS (hereinafter, the "Municipality"). Section 1.1 Definitions. The terms set forth in this section shall have W I T N E S S E T H: the meanings ascribed to them for all purposes of this Lease unless the context clearly indicates some other meaning. Terms used herein and not defined herein shall have WHEREAS, the Authority is authorized by the County Improvement the meanings ascribed thereto in the Bond Resolution. Words in the singular shall Authorities Law, chapter 183 of the Laws of New Jersey of 1960, as amended and include the plural and words in the plural shall include the singular where the context so supplemented (N.J.S.A. 40:37A-44 et seq.) (the "Act"), to provide within the County of requires. Middlesex, State of New Jersey, or any beneficiary county, public facilities for use by the State, the County or any municipality in the County or any beneficiary county, or any "Acceptance Certificate" shall mean a certificate substantially in the two (2) or more or any subdivisions, departments, agencies or instrumentalities of any form set forth in Exhibit B annexed hereto and incorporated by this reference herein. of the foregoing for any of their respective governmental purposes; and "Account" or "Accounts" shall mean, as the case may be, each or all of WHEREAS, the Authority is authorized by the Act to lease to any the accounts established and created under Article V of the Bond Resolution. governmental unit or person, all or any part of any public facility, including but not limited to, capital equipment, for such consideration and for such period or periods of "Acquisition and Improvement Fund" shall mean the Acquisition and time and upon such other terms and conditions as it may fix and agree upon; and Improvement Fund created and established pursuant to Section 502 of the Bond Resolution. WHEREAS, the Authority has determined pursuant to the Act to finance the various capital improvements to be undertaken by and the acquisition, installation "Act" shall mean the County Improvement Authorities Law, chapter 183 of and, as applicable, subsequent leasing of certain capital equipment, including but not the Laws of New Jersey of 1960 (N.J.S.A. 40:37A-44 et seq.), as amended and limited to police and passenger vehicles, to various governmental entities within the supplemented from time to time. County, including the County and the Authority (the "2014 Program"); and "Additional Rent" shall mean all amounts payable by the Municipality to WHEREAS, the Equipment will be financed through the issuance of the Authority or the County, as the case may be, under this Lease (excluding Basic County-Guaranteed Capital Equipment And Improvement Revenue Bonds, Series 2014 Rent), including, but not limited to, the annual Trustee's fee and the annual Authority (the “Bonds”); and Administrative Expenses, and where applicable, allocated to the Municipality on a pro rata basis with all other Municipalities which are parties to this transaction in relation to WHEREAS, all actions necessary and required under the Act have been the amount of Bonds Outstanding in any Bond Year all as set forth in Exhibit A annexed taken by the Authority; and hereto, professional fees incurred for any arbitrage rebate calculation, arbitrage rebate expenses, County Guarantee Costs, and all direct and indirect costs and expenses WHEREAS, the Municipality has determined to participate in the 2014 incurred by the Authority and the County related to the enforcement of this Lease and Program and to lease the Equipment from the Authority pursuant to the terms and the County Guarantee and the County Guarantee Agreement, including reasonable conditions set forth hereunder; and attorneys' fees related thereto.
WHEREAS, the Authority will, pursuant to the Act, provide for the "Annual Authority Administrative Fee" shall mean the annual fee for financing of the cost of the acquisition of the Equipment by the issuance of the Bonds the general administrative expenses of the Authority for the Series 2014 Bonds as shall payable from rentals to be received from the Municipality pursuant to the terms and be set forth in Exhibit A to the Lease. conditions set forth herein; "Applicable Basic Rent" shall mean the amount of Basic Rent payable NOW, THEREFORE, the parties hereto mutually agree as follows: on a given Lease Payment Date with respect to a particular Item of Equipment as set forth in Exhibit A annexed hereto and incorporated by this reference herein.
"Authority" shall mean the Middlesex County Improvement Authority, a public body corporate and politic organized and existing under the Act and created
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pursuant to a resolution of the Board of Chosen Freeholders of the County of Middlesex any, to the extent required to redeem the Bonds pursuant to Article IV of the Bond adopted on September 6, 1990, and any successor to its duties and functions. Resolution.
"Authority Administrative Expenses" shall mean any and all expenses "Bond" or "Bonds" shall mean, collectively, the Outstanding Bonds of of the Authority and its agents, professionals and employees incurred or to be incurred the Authority issued pursuant to Section 201 of the Bond Resolution, specifically, the by or on behalf of the Authority in the administration of its responsibilities under the not to exceed $18,000,000 County-Guaranteed Capital Equipment And Improvement Bond Resolution, the County Guarantee Agreement and this Lease, including, but not Revenue Bonds, Series 2014 and Refunding Bonds, if any. limited to, (i) the Initial Authority Financing Fee, (ii) the Annual Authority Administrative Fee, (iii) all fees and expenses, including but not limited to, indemnification expenses, if Bond Counsel shall mean Wilentz, Goldman & Spitzer, P.A., any, incurred in connection with the issuance of the Series 2014 Bonds, the financing of Woodbridge, New Jersey or any other lawyer or firm of lawyers with experience and the Equipment or the compelling of the full and punctual performance of the Bond nationally recognized expertise in the field of municipal finance selected by the Resolution and this Lease in accordance with the terms thereof and hereof, (iv) all fees Authority. and expenses, including, but not limited to, indemnification expenses, if any, of counsel, Fiduciaries and others, and (v) any fees and expenses, including, but not limited to, "Bondholder", "Holder of Bonds", "Holder" or "Owner" shall mean indemnification expenses, if any, incurred by the Paying Agent, the Bond Registrar or any person who shall be the registered owner of any Bond or Bonds. the Trustee or any or all Fiduciaries in connection with the performance of their respective fiduciary responsibilities under the Bond Resolution and this Lease, all to the "Bond Resolution" shall mean the resolution adopted by the Authority on extent not capitalized pursuant to the requirements of the Bond Resolution, which August 13, 2014 entitled "Resolution of the Middlesex County Improvement Authority Authority Administrative Expenses shall be paid as Additional Rent by the Municipality Authorizing the Issuance of County-Guaranteed Capital Equipment And Improvement and where applicable, allocated to the Municipality on a pro rata basis with all other Revenue Bonds", as the same may be amended, modified or supplemented in Municipalities which are parties to this transaction in relation to the amount of Bonds accordance with the provisions thereof. Outstanding in any Bond Year, all as set forth in Exhibit A attached hereto. "Bond Year" shall mean the twelve (12) month period beginning "Authorized Authority Representative" shall mean any person or September 15 and ending on September 14, excepting that the first Bond Year with persons authorized to act on behalf of the Authority by a written certificate signed on respect to the Series 2014 Bonds shall commence on the date of original issuance of behalf of the Authority by the Chairman or Vice Chairman of the Authority containing the the Series 2014 Bonds and end on September 14, 2015. specimen signature of each such person. "Business Day" shall mean any day that is not a Saturday, Sunday or a "Authorized County Representative" shall mean any person or persons legal holiday in the State of New Jersey or the State of New York or a day on which the authorized to act on behalf of the County by a written certificate signed on behalf of the Trustee, the Bond Registrar, any Paying Agent or the Authority is legally authorized to County by the Director or Deputy Director of the Board of Chosen Freeholders of the close. County containing the specimen signature of each such person. "Code" shall mean the Internal Revenue Code of 1986, as amended from "Authorized Municipal Representative" shall mean any person or time to time, and the applicable regulations thereunder. persons authorized to act on behalf of the Municipality by a written certificate signed on "Cost" or "Costs" shall mean and be deemed to include, with respect to behalf of the Municipality by the Mayor of the Municipality containing the specimen any Item of Equipment for each Municipality and, where applicable, allocated on a pro signature of each such person, which Municipality shall also include the County acting rata basis with all other Municipalities which may be parties to the transaction with in the capacity of a municipal participant, which in the case of the County, such written respect thereto, together with any other proper and reasonable item of cost not certificate shall be signed by the Director or Deputy Director of the Board of Chosen specifically mentioned herein, whether incurred prior to or after the date of this Lease, Freeholders, which form of certificate is set forth as Exhibit F annexed hereto and (a) the costs of payment of, or reimbursement for, acquisition, installation and financing incorporated by this reference herein. of each such Item of Equipment, including, but not limited to, advances or progress "Basic Rent" shall mean the sum of money representing principal and payments, installation costs, administrative costs and capital expenditures relating to interest for each Item of Equipment necessary to amortize Debt Service on the Series installation, financing payments, sales taxes, excise taxes, costs of feasibility, 2014 Bonds allocated to the Municipality and payable by the Municipality on each Lease environmental and other reports, inspection costs, permit fees, filing and recordation Payment Date, as set forth in Exhibit A annexed hereto and incorporated by this costs, printing costs for all documents, reproduction and binding costs, fees and reference herein and as described in Section 3.1(a) herein and redemption premium, if charges of the Trustee pursuant to the Bond Resolution, financing documents, legal fees and charges, financial, accounting and other professional consultant fees, the
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Initial Authority Financing Fee for a particular Series of Bonds, all professional and those costs and expenses incurred by the County in connection with curing a default consulting fees and charges of the Authority and the County, costs of rating agencies, under its Lease. bond insurance, bond insurers or credit ratings, fees for the printing, execution, transportation and safekeeping of the Bonds, and any charges and fees in connection "Debt Service" for any period shall mean, as of any date of calculation, with any of the foregoing; (b) all other costs which the Municipality or the Authority shall with respect to the Series 2014 Bonds, an amount equal to the sum of (i) the interest be required to pay under the terms of any contract or contracts for the acquisition of any accruing during such period on such Bonds except to the extent such interest is to be Item of Equipment, including, but not limited to, the cost of insurance; (c) any sums paid from deposits made from Bond proceeds into the Debt Service Fund, and (ii) that required to reimburse the Municipality for advances made for any of the above items, or portion of each Principal Installment which would accrue during such period if such for any other costs incurred and for work done, which is properly chargeable to any Item Principal Installment were deemed to accrue daily in equal amounts from the of Equipment; (d) deposits in any Fund or Account under the Bond Resolution, all as immediately preceding Principal Installment Date or, if there should be no preceding shall be provided in the Bond Resolution; and (e) such other expenses not specified Principal Installment Date, from a date one year (or such lesser period as shall be herein as may be necessary or incidental to the acquisition of any Item of Equipment, appropriate if Principal Installments shall become due more frequently than annually) the financing thereof and the placing of the same in use and operation. Cost as defined preceding such Principal Installment Date or from the date of original issuance of the herein shall be deemed to include (i) the costs and expenses incurred by any agent of Series 2014 Bonds, whichever is later. Such interest and Principal Installments for such the Authority or the Municipality for any of the above mentioned items and (ii) all costs Series 2014 Bonds shall be calculated on the assumption that no Bonds Outstanding at and expenses incurred by any agent of the County and the Authority in connection with the date of calculation will cease to be Outstanding except by reason of the payment of the adoption, administration and enforcement of this Lease and the County Guarantee, each Principal Installment on the Principal Installment Date. The calculations in the including, but not limited to, County Guarantee Costs. preceding sentence shall be made on the basis of a 30-day month and 360-day year.
"County" shall mean the County of Middlesex, a public body politic and "Debt Service Fund" shall mean the Debt Service Fund created and corporate of the State of New Jersey. established in Section 502 of the Bond Resolution.
"County Guarantee" shall mean the County's unconditional and "Debt Service Requirement" with respect to the next Interest Payment irrevocable guarantee of the punctual payment of principal of and interest when due on Date for the Series 2014 Bonds shall mean, (i) in the case of an Interest Payment Date the Bonds duly adopted pursuant to section 37 of the Act, and specifically with respect on which interest only shall be due, interest accrued and unpaid and to accrue to such to the Series 2014 Bonds, duly adopted August 21, 2014 and entitled, "AN date if such Principal Installment or Installments shall be deemed to accrue in the ORDINANCE AUTHORIZING THE GUARANTY BY THE COUNTY OF MIDDLESEX, manner provided in clause (ii) of the definition of "Debt Service" set forth in Section 101 STATE OF NEW JERSEY OF THE PAYMENT OF PRINCIPAL OF AND INTEREST of the Bond Resolution, and (ii) in the case of an Interest Payment Date on which both ON THE COUNTY-GUARANTEED CAPITAL EQUIPMENT AND IMPROVEMENT interest and a Principal Installment or Installments shall be due, interest accrued and REVENUE BONDS, ISSUED BY THE MIDDLESEX COUNTY IMPROVEMENT unpaid and to accrue to such date plus the Principal Installment or Installments due on AUTHORITY IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED such date. The calculations in the preceding sentence shall be made on the basis of a $18,000,000 AND AUTHORIZING A PUBLIC HEARING TO BE HELD THURSDAY, 30-day month and 360-day year. AUGUST 21, 2014 AT 7:00 P.M., AUTHORIZING PUBLICATION THEREOF, CONSENTING TO SUCH FINANCING AND DETERMINING CERTAIN OTHER "Equipment", "Item(s) of Equipment" or “Vehicles” shall mean the MATTERS IN CONNECTION THEREWITH". vehicles described in Exhibit A annexed hereto and incorporated by this reference herein purchased and acquired with the proceeds of the Series 2014 Bonds, including "County Guarantee Costs" shall mean all direct and indirect Costs and any vehicle substituted or added pursuant to Section 8.1(b) of this Lease, and described expenses of the County incurred with respect to its County Guarantee as defined in the in Exhibit G annexed hereto. County Guarantee Agreement, including amounts paid by the County pursuant to Sections 508 and 708 of the Bond Resolution, together with interest on such amounts at "Event of Default" shall mean an event of default as defined in Section an interest rate equal to the County's cost of obtaining funds required to make such 7.1 hereof but not under the Bond Resolution. payments (including, but not limited to, lost earnings on the investment of available funds used to make such payments or the net interest cost of such Series of Bonds, "Favorable Opinion of Bond Counsel" shall mean an opinion of Bond whichever is higher, as shall be determined by the County), reasonable attorneys' fees Counsel, addressed to the Authority and the Trustee, to the effect that the action and other costs arising out of the required payment or expenses for the collection, proposed to be taken is authorized or permitted by the Bond Resolution and the Act and enforcement and repayment pursuant to the County Guarantee, together with interest will not adversely affect the exclusion of interest on a Series of Bonds from gross accrued on such sum until the time of repayment to the County, but shall not include income for purposes of Federal income taxation under section 103 of the Code.
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"Fiduciary" or "Fiduciaries" shall mean the Trustee, the Paying Agent, Day, the Lease Payment shall be made by the Municipality on the next succeeding the Bond Registrar, or any or all of them, as may be appropriate. Business Day.
"Fiscal Year" shall mean the twelve (12) month fiscal period of the "Lease Term" shall mean the period during which this Lease or the lease Municipality, the County or the Authority, including any six-month transition year of the of any Item of Equipment, as the case may be, is in effect as specified in Section 2.2 Municipality authorized pursuant to chapter 75 of the Laws of New Jersey of 1991. hereof.
"Fund" or "Funds" shall mean, as the case may be, each or all of the "Month" shall mean a calendar month. Funds created and established in Section 502 of the Bond Resolution; provided, however, that such Funds do not constitute "funds" in accordance with generally "Moody's" shall mean Moody's Investors Service, Inc., a corporation accepted accounting principles. organized and existing under the laws of the State of Delaware, and its successors and/or assigns, if any. "Guarantee Agreement" or "County Guarantee Agreement" shall mean the County Guarantee Agreement dated as of September 30, 2014, entered into "Municipal Account(s)" shall mean each of the account(s) created in the by and between the County and the Authority wherein the County has irrevocably and Acquisition and Improvement Fund, Proceeds Fund and Debt Service Fund for each of unconditionally guaranteed the punctual payment of the principal of and interest on the the Municipalities in connection with the issuance of the Series 2014 Bonds into which Series 2014 Bonds and setting forth the terms and conditions of the County Guarantee moneys, Proceeds, Series 2014 Bond proceeds and investment earnings, as with respect to the Series 2014 Bonds, as amended and supplemented. applicable, allocable to the Municipality, shall be deposited pursuant to Article V of the Bond Resolution. "Initial Authority Financing Fee" shall mean the amount equal to $50,000 for the initial financing fee of the Authority, allocated to the Municipality based "Municipality" or "Municipalities" shall mean the Municipality as on the percentage set forth in Exhibit A to each Lease or a Supplemental Resolution defined in the preamble hereof and, with respect to the Series 2014 Bonds, shall mean authorizing a Series of Bonds. collectively all of the Municipalities, including the County, each of which have executed a Lease with the Authority for the purposes of acquiring equipment with the proceeds of "Interest Payment Date" shall mean, with respect to the Series 2014 the Series 2014 Bonds, all of which are situated in the County. Bonds, each March 15 and September 15, commencing March 15, 2015, and such other dates as shall be established by a Supplemental Resolution authorizing a Series "Operating Fund" shall mean the Operating Fund created and of Bonds. In the event an Interest Payment Date is not a Business Day, interest shall established under Section 502 of the Bond Resolution. be paid on the next succeeding Business Day for interest accrued to the Interest Payment Date. "Ordinance" shall mean the ordinance duly adopted by the Municipality approving and authorizing the execution and delivery of this Lease and pledging the full "Lease" shall mean, with respect to the Series 2014 Bonds, this Lease faith and credit of the Municipality for the repayment of its obligations under this Lease. and Agreement dated as of September 30, 2014, by and between the Authority and the Municipality, as approved by the County, and any and all modifications, alterations, "Outstanding" when used with reference to Bonds, shall mean, as of any amendments and supplements thereto made in accordance with the provisions hereof date, Bonds theretofore or thereupon being authenticated and delivered under the Bond and the Bond Resolution. Resolution except:
"Lease Payment" shall mean the Rental Payment consisting of Basic (i) Bonds canceled by the Trustee at or prior to such date; Rent payable on each Lease Payment Date and, as applicable, Additional Rent payable by the Municipality upon demand pursuant to Section 3.1(a) and (b) hereof, (ii) Bonds (or portions of Bonds) for the payment of which respectively. moneys, equal to the principal amount or Redemption Price thereof, as the case may be, together with interest to accrue thereon to the date of "Lease Payment Date" shall mean, with respect to the Series 2014 maturity or redemption date, shall be held in an irrevocable trust under the Bonds, each January 15 and July 15, commencing January 15, 2015, which dates shall Bond Resolution and set aside for such payment or redemption (whether not be later than the first day of the second month immediately preceding each Interest at or prior to the maturity date); provided that if such Bonds (or portion of Payment Date and Principal Installment Date, as applicable, and such other dates Bonds) are to be redeemed, notice of such redemption shall have been determined in accordance herewith as may be set forth in a Supplemental Resolution given as provided in the Bond Resolution; authorizing a Series of Bonds. In the event a Lease Payment Date is not a Business
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(iii) Bonds in lieu of or in substitution for which other Bonds shall Equipment And Improvement Revenue Bonds as from time to time is amended or have been authenticated and delivered pursuant to Article III of the Bond supplemented in accordance with the terms thereof. Resolution or Section 1206 of the Bond Resolution; and "Series 2014 Bonds" shall mean all of the Bonds authenticated and (iv) Bonds deemed to have been paid as provided in subsection delivered upon original issuance pursuant to Section 203 of the Bond Resolution. 1 or 2 of Section 1301 of the Bond Resolution. "Standard & Poor's" or "S&P" shall mean Standard & Poor's Ratings "Person" or "Persons" shall mean any individual, corporation, Services, a division of The McGraw-Hill Companies, Inc., a corporation organized and partnership, joint venture, trust or unincorporated organization or a governmental existing under the laws of the State of New York, and its successors and/or assigns, if agency or any political subdivision thereof. any.
"Principal Installment" shall mean, as of any date of calculation, and "State" shall mean the State of New Jersey or any successor to its duties with respect to the Series 2014 Bonds, so long as any Series 2014 Bonds are and functions. Outstanding, (i) the principal amount of Series 2014 Bonds due on a certain future date for which no Sinking Fund Installments have been established plus any applicable "Substitution Certificate" shall mean the certificate executed by an redemption premium thereon, and (ii) any Sinking Fund Installments due on a certain Authorized Municipal Representative pursuant to Section 8.1 of this Lease, annexed as future date for the Series 2014 Bonds, if any, plus the amount of the sinking fund Exhibit G hereto and incorporated by this reference herein. redemption premium, if any, which would be applicable upon redemption of the Series 2014 Bonds on such future date in a principal amount equal to such Sinking Fund "Trustee" shall mean, with respect to the Series 2014 Bonds, TD Bank, Installments. National Association, Cherry Hill, New Jersey and its successors or assigns or any other bank, trust company or national banking association appointed trustee pursuant to "Principal Installment Date" shall mean with respect to the Series 2014 the Bond Resolution. Bonds, each September 15, commencing September 15, 2015, on which any Principal Installment shall become due and payable by the Authority. In the event a Principal Installment Date is not a Business Day, principal shall be paid on the next succeeding Business Day for the Principal Installment payable on the Principal Installment Date.
"Proceeds" shall mean any insurance, condemnation, performance bond, or any other financial guaranty proceeds paid with respect to any Item of Equipment, remaining after payment therefrom of all expenses incurred in the collection thereof; and, with respect to insurance, if and at such time as the Municipality elects to provide self-insurance under Section 5.3 of this Lease, any moneys payable from any self- insurance fund of the Municipality which may lawfully be expended for the purposes for which such self-insurance is provided.
"Proceeds Fund" shall mean the Proceeds Fund created and established under Section 502 of the Bond Resolution.
"Registered Owner" shall mean the owner of any Bond which is issued in fully registered form, as determined on the Record Date, as reflected on the registration books of the Authority which shall be kept and maintained on behalf of the Authority at the principal institutional trust office of the Bond Registrar.
"Rent", "Rental(s)" or "Rental Payment" shall mean the sum of Basic Rent and Additional Rent set forth in Section 3.1 hereof.
"Resolution" shall mean the Resolution of the Middlesex County Improvement Authority Authorizing the Issuance of County-Guaranteed Capital
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ARTICLE II 2014 Bonds are deemed to have not been "spent" in accordance with the Code, the Municipality shall pay to the Authority as Additional Rent the cost and expense of the LEASE OF EQUIPMENT; TERM OF LEASE; ACQUISITION OF EQUIPMENT performance of an arbitrage rebate calculation. The Municipality shall also be required to pay any arbitrage rebate moneys to the Authority in the event the Municipality's Section 2.1 Lease of Equipment. The Authority hereby agrees to lease failure to "spend" Bond proceeds attributable to such Municipality requires the Authority to the Municipality, and the Municipality hereby agrees to take and hire from the to rebate money to the Internal Revenue Service. This obligation of the Municipality to Authority, each Item of Equipment on the terms and conditions set forth in this Lease. pay to the Authority the cost and expense of the performance of an arbitrage rebate calculation and arbitrage rebate moneys shall survive the expiration of the Lease Term Section 2.2 Term of Lease. Subject to the provisions of Section 9.10 and the final maturity of the Series 2014 Bonds. hereof, the Lease Term for the Equipment shall commence on the date of issuance and delivery of the Series 2014 Bonds by the Authority and shall terminate on the first date (b) Contracts in connection with the purchase and installation of each upon which no Series 2014 Bonds remain Outstanding and all Rentals due and owing Item of Equipment shall be let in accordance with all applicable competitive bidding hereunder by the Municipality shall have been paid in full. The Lease Term for any Item laws. All such contracts shall have the same general form and content as similar of Equipment shall be deemed to commence on the date of issuance and delivery of the contracts let by the Municipality. Series 2014 Bonds and end on the date specified in Exhibit A annexed hereto with respect to each such Item of Equipment. (c) Upon delivery of each Item of Equipment to the Municipality, the Municipality shall cause an Authorized Municipal Representative to inspect the same Section 2.3 Acquisition of Items of Equipment. (a) The Authority and, either (i) if such Item of Equipment is found to be in good condition, to accept such agrees to acquire or cause the Municipality to acquire each of the Items of Equipment Item of Equipment and to execute and deliver an Acceptance Certificate (and the specified in Exhibit A pursuant to the specifications prepared by the Municipality. The requisition for the payment thereof with respect thereto as required by Section 2.5(b) Municipality agrees that it will be responsible for the letting of contracts for the purchase hereof) to the Authority within ten (10) Business Days of inspection, which Acceptance and installation of the Items of Equipment and supervising the installation and Certificate shall be approved by an Authorized Authority Representative pursuant to acceptance of the Items of Equipment. An Authorized Municipal Representative Section 2.5(b) hereof and thereafter forwarded to the Trustee for payment, or (ii) if the shall execute and deliver to the Authority prior to the date of the original issuance Municipality, acting in good faith, should find that such Item of Equipment is not in good of the Series 2014 Bonds, a certificate certifying that the Municipality will use its condition or in accordance with specifications therefor, the Municipality shall return the best efforts to cause the purchase, installation and requisition of the moneys for same to the manufacturer or supplier thereof. Upon presentation of an Acceptance the payment of the Equipment from the Municipal Account in the Acquisition and Certificate and the requisition required by the terms of the Bond Resolution (as Improvement Fund in accordance with the following: the Municipality shall approved by an Authorized Authority Representative pursuant to Section 2.5(b) hereof), requisition (i) fifteen (15%) percent of the Bond proceeds in its Municipal Account the Trustee will pay the Cost of such Item of Equipment pursuant to the terms of the in the Acquisition and Improvement Fund within six (6) months after the date of Bond Resolution. In the event the Municipality returns an Item of Equipment to the the original issuance of the Bonds; (ii) sixty (60%) percent of the Bond proceeds manufacturer which was not delivered in good working order and substitute, in its Municipal Account in the Acquisition and Improvement Fund within twelve replacement or additional Equipment is not procured in a timely manner such that an (12) months after the date of original issuance of the Bonds; and (iii) one hundred Acceptance Certificate and requisition of the Municipality are not submitted to the (100%) percent of the Bond proceeds in its Municipal Account in the Acquisition Authority for approval and forwarded to the Trustee for full payment on or before and Improvement Fund within eighteen (18) months after the date of original eighteen (18) months after the date of original issuance of the Series 2014 Bonds and in issuance of the Bonds so as not to subject the Series 2014 Bonds to arbitrage accordance with the time periods and percentages specified in Section 2.3(a) hereof rebate. The Municipality will also deliver to the Trustee the items required by the such that the Series 2014 Bonds are not deemed to have been "spent" in accordance terms of this Lease and the Bond Resolution to enable the Trustee to make the with the Code, the Municipality shall pay to the Authority as Additional Rent the cost and respective payments therefor for the purchase thereof within said eighteen (18) expense of the performance of an arbitrage rebate calculation. The Municipality shall month period. In the event the Municipality does not requisition all of such moneys also be required to pay arbitrage rebate moneys to the Authority in the event the within eighteen (18) months of the date of original issuance of the Series 2014 Bonds Municipality's failure to "spend" Bond proceeds attributable to the Municipality requires and in accordance with the time periods and percentages specified in this Section the Authority to rebate money to the Internal Revenue Service. This obligation of the 2.3(a), such moneys shall be applied by the Trustee in accordance with the provisions Municipality to pay to the Authority the cost and expense of the performance of an of Sections 503(7) and 507(5) of the Bond Resolution. Also, in the event the arbitrage rebate calculation and arbitrage rebate moneys shall survive the expiration of Municipality does not requisition all such moneys within eighteen (18) months of the the Lease Term and the final maturity of the Series 2014 Bonds. date of issuance of the Series 2014 Bonds and in accordance with the time periods and percentages specified in this Section 2.3(a) hereof and such proceeds of the Series
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(d) In the event more than one Municipality fails to comply with the Fund and the Trustee shall be directed by the Authority to pay the Cost of Equipment in provisions of subsections (a) and (c) hereof regarding the eighteen-month rebate accordance with the provisions of Section 2.5(b) hereof. In such event, the Municipality exception under the Code and the Series 2014 Bonds are subject to arbitrage rebate, all shall not be entitled to any reimbursement from the Authority or the County as a result amounts to be rebated to the Internal Revenue Service by the Authority which are of such payment. required hereunder to be paid by the Municipalities to the Authority as Additional Rent shall be allocated in accordance with the pro rata basis set forth in Exhibit A hereto (d) In the event the Municipality pays to the Trustee sums needed to between all such Municipalities. This obligation of each Municipality to pay to the fund the balance of the Cost of the Equipment in accordance with the provisions of Authority arbitrage rebate moneys and the cost and expense of the performance of an Section 2.4(c) hereof, the Municipality shall complete Exhibit H attached hereto to arbitrage rebate calculation shall survive the expiration of the Lease Term for all reflect (i) the amount of moneys being withdrawn from the Municipal Account in the Equipment and the final maturity of the Series 2014 Bonds. Acquisition and Improvement Fund to pay the Cost of the Equipment, (ii) the amount of money forwarded to the Trustee on behalf of the Authority for deposit in the Municipal (e) Upon delivery of the Equipment to the Municipality, the Authority Account in the Acquisition and Improvement Fund by the Municipality to make up the shall hold title thereto during the Lease Term. At the time the Municipality delivers the deficiency in such Cost of the Equipment, (iii) the total purchase price of the Equipment, Acceptance Certificate and the requisition for payment to the Authority for approval, it and (iv) such other information required to be completed on such Exhibit H, which shall also provide to the Authority all documents and certificates evidencing title to such certificate shall be completed by the Municipality and delivered and filed with the Item of Equipment, which title shall be in the name of the Authority during the Lease Authority and Trustee. Term pursuant to Section 6.1 hereof. By execution hereof, the Municipality acknowledges that title to such Items of Equipment shall be held by the Authority. The Section 2.5 Application of Bond Proceeds. (a) Upon original issuance Municipality shall, except if the Municipality is the County, if permitted by the State of the Series 2014 Bonds, Bond proceeds shall be applied as follows: to the Trustee Division of Motor Vehicles, obtain municipal plates placed on the vehicles. The (i) an amount equal to the accrued interest on the Series 2014 Bonds, if any, for deposit Authority and the Municipality shall cooperate in obtaining municipal license plates for in each Municipal Account in the Debt Service Fund; (ii) the amount representing costs the vehicles. In the event the State Division of Motor Vehicles requires vehicles to have of issuance on the Series 2014 Bonds, including the Initial Authority Financing Fee, for County license plates, the Municipality shall immediately cause an insignia or decal of deposit in the Operating Fund and paid in accordance with Section 505(3) of the Bond the Municipality to be affixed to each such motor vehicle for the purposes of identifying Resolution; and (iii) the remaining Series 2014 Bond proceeds shall be allocated to the motor vehicle as a municipal vehicle, unless such vehicle shall be used by the each Municipality and deposited into the respective Municipal Account in the Acquisition Municipality for an undercover purpose. In such event an insignia or decal shall not be and Improvement Fund and paid in accordance with Section 503 of the Bond required and a "County" license plate shall not be required. Resolution.
Section 2.4 Issuance of Series 2014 Bonds. (a) To provide funds for (b) Except as provided in subsection (h) of this Section 2.5, the payment of the Cost of the Equipment, the Authority will use its best efforts to sell, issue Authority has in the Bond Resolution authorized and directed the Trustee to make and deliver the Series 2014 Bonds. The proceeds of the Series 2014 Bonds shall be payments from the Municipal Account in the Acquisition and Improvement Fund to pay applied as provided for in the Bond Resolution. the Cost of the Equipment upon receipt by the Authority and the Trustee of an Acceptance Certificate and a requisition in the form set forth in Exhibit E attached (b) The Municipality shall cooperate with the Authority in furnishing to hereto and incorporated by this reference herein signed by an Authorized Municipal the Authority, the County and the Trustee all documents required to effectuate the Representative and approved by an Authorized Authority Representative (which transaction contemplated herein, including the execution and delivery of certificates, approval shall not be unreasonably withheld), which requisition shall certify with respect resolutions, opinions and disclosure materials necessary in connection therewith. to each payment to be made: (1) the requisition number, (2) the name and address of the person, firm, corporation or agency to whom payment is due or has been made, (3) (c) In the event moneys in the Municipal Account in the Acquisition and the amount to be paid, (4) the Item(s) of Equipment to which the requisition relates and Improvement Fund allocated to each Item of Equipment are not sufficient to purchase (5) that each obligation, item of cost or expense mentioned therein has been properly such Item of Equipment, the Municipality shall so notify the Authority and the Trustee incurred, is a Cost and is a proper charge against the Municipal Account in the and the Municipality shall be obligated to pay the balance of the purchase price of such Acquisition and Improvement Fund and has not been the subject of any previous Item of Equipment out of funds of the Municipality legally available therefor. In the withdrawal. In accordance with the provisions of the Bond Resolution, the Trustee will event the Municipality acquires an Item of Equipment with a purchase price greater than provide the Municipality with quarterly statements showing the balance of moneys the moneys allocated to such Item of Equipment as indicated by Exhibit A or Exhibit G, remaining in the Municipal Account in the Acquisition and Improvement Fund. if applicable, annexed hereto, the Municipality shall pay the balance of such moneys to the Trustee for deposit in the Municipal Account in the Acquisition and Improvement
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(c) In connection with the approval of requisitions by the Authority, the Trustee or remain in the Municipal Account in the Proceeds Fund and shall be nothing herein contained shall prevent the Municipality, acting on behalf of and as agent applied in accordance with the provisions of Section 507(6) of the Bond Resolution. for the Authority in connection with the acquisition and installation of the Equipment, from making all final determinations in connection with the interpretation and (h) Nothing herein shall be construed to prevent the Trustee from performance of any contracts for the acquisition and installation of the Equipment. making advance, partial or progress payments from the Municipal Account in the Acquisition and Improvement Fund for application to the Cost of the Equipment in the (d) The Authority agrees to cooperate with the Municipality in event a Municipality is acquiring Equipment under State contract or other contract furnishing to the Trustee any documents required to effect payments out of the requiring partial or progress payments. In such event, no Certificate of Acceptance will Municipal Account in the Acquisition and Improvement Fund in accordance with this be required to be submitted by the Municipality to the Authority and Trustee to Section 2.5 and Section 2.4(d) hereof. Such payment obligation of the Authority is requisition such partial payments until the last payment is due and owing. subject to any provisions of the Bond Resolution requiring additional documentation with Notwithstanding the above, the Municipality shall complete the requisition for advance, respect to such payments and shall not extend beyond the moneys in the Municipal partial or progress payments attached as Exhibit C hereto and incorporated by Account in the Acquisition and Improvement Fund available for payment under the reference herein to requisition moneys for such partial payment, which certificate shall terms of the Bond Resolution. be delivered to the Authority and filed with the Trustee. The Municipality shall also provide evidence satisfactory to the Authority and Trustee of compliance with the (e) The completion of the acquisition and installation of all Items of requirements of Section 5.8 hereof. The final requisition for a partial payment by a Equipment shall be evidenced by an Acceptance Certificate for each Item of Equipment Municipality shall be accompanied by an Acceptance Certificate pursuant to executed by an Authorized Municipal Representative substantially in the form set forth Section 2.5(e) hereof. in Exhibit B, and approved by an Authorized Authority Representative (which approval shall not be unreasonably withheld), which shall be filed with the Trustee, certifying, Section 2.6 Municipality's Liability. As between the Authority and the inter alia, (1) that the acquisition and installation of all Items of Equipment have been Municipality, the Municipality assumes liability for all risks of loss during the acquisition, completed substantially in accordance with specifications applicable thereto and that delivery, installation and use of each Item of Equipment. The Municipality shall such Equipment is ready for use, (2) the date of such completion, and (3) the purchase maintain, or shall demonstrate, to the satisfaction of the Authority, that adequate price of such Item of Equipment. insurance or self-insurance is provided with respect to each Item of Equipment, or require each manufacturer or supplier of each Item of Equipment to maintain, in force (f) Pursuant to Section 503(4) and (5) of the Bond Resolution, after the during the entire acquisition, delivery and installation period of each Item of Equipment, delivery and filing of such Acceptance Certificate(s) and requisitions by the Municipality property damage insurance in an amount not less than the full value of all work done to the Authority and Trustee, and to the extent Bond proceeds remain in the Municipal and materials and equipment provided or delivered by each such manufacturer or Account in the Acquisition and Improvement Fund, and upon delivery to the Trustee of supplier, comprehensive liability insurance, worker's compensation insurance and other written instructions of an Authorized Authority Representative, an amount equal to the insurance required by law or customarily maintained with respect to like equipment. Municipality's pro rata share of Authority Administrative Expenses for the Bond Year The existence of such insurance coverage shall be evidenced at the time the Item of shall be transferred by the Trustee to the Operating Fund. The balance of any Bond Equipment is ordered by the Municipality. Any damages or other moneys from any proceeds remaining in the Municipal Account in the Acquisition and Improvement Fund, manufacturer or supplier of equipment or its surety paid to the Municipality pursuant to after application of such moneys in accordance with the preceding sentence, shall be this Section 2.6 shall be paid to the Trustee for deposit in the Municipal Account in the transferred to the Debt Service Fund for deposit in the Municipal Account or the Acquisition and Improvement Fund (in accordance with written instructions) to the Proceeds Fund for deposit in the Municipal Account and shall be applied by the Trustee extent necessary to complete the acquisition of such Item of Equipment. Upon the as a credit toward the Municipality's Basic Rent obligation on the next succeeding Lease delivery of a certificate of an Authorized Municipal Representative to the Trustee, Payment Date or applied to the payment of the Rebate Requirement (as defined in moneys from any manufacturer, supplier or surety not necessary to complete the Section 509 of the Bond Resolution) in accordance with Section 503(7) and (8) thereof. acquisition of such Item of Equipment shall be transferred by the Trustee to the Municipal Account in the Proceeds Fund and applied as a credit toward the (g) All interest earned or any gain realized on any moneys or Municipality's Basic Rent obligations on the next succeeding Lease Payment Date in investments in the Municipal Accounts in the Acquisition and Improvement Fund, the accordance with Sections 503(6) and 507(4) of the Bond Resolution. Debt Service Fund or the Proceeds Fund shall (i) be transferred by the Trustee to the Operating Fund to pay the amount equal to the Municipality’s pro rata share of Authority Section 2.7 Possession and Enjoyment. From and after the installation Administrative Expenses and County Guarantee Costs for each Bond Year, and and acceptance by the Municipality of each Item of Equipment in accordance with the (ii) following such transfer to the Operating Fund, if moneys remain, be transferred by terms of this Lease, during the Lease Term of such Item of Equipment, the Municipality shall have the quiet use and enjoyment of such Item of Equipment, and the Municipality
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shall during such Lease Term peaceably and quietly have and hold and enjoy such Item make, nor has it ever made, any representation or warranty whatsoever as to the of Equipment, without suit, trouble or hindrance from the Authority, except as expressly existence or availability of such warranties of the manufacturer or supplier of any Item of set forth in this Lease. The Authority will, at the request of the Municipality and at the Equipment. Municipality's cost, join in any legal action in which the Municipality asserts its right to such possession and enjoyment to the extent the Authority lawfully may do so.
Section 2.8 Authority Access to Equipment. The Municipality agrees that the Authority shall have the right, but not the obligation, during the Municipality's normal working hours on the Municipality's normal working days to examine and inspect each Item of Equipment for the purpose of assuring that such Item of Equipment is being properly maintained, preserved, and kept in good repair, working order and condition, except in the event of emergency (which shall be determined by the Authority), when such examination and inspection can be made by the Authority at any time. The Municipality further agrees that the Authority shall have such rights of access to each Item of Equipment as may be reasonably necessary to cause the proper maintenance of such Item of Equipment in the event of failure by the Municipality to perform its obligations hereunder. The Authority, however, shall not be obligated to cause the proper maintenance of each Item of Equipment in the event the Municipality fails to do so. If the Authority obtains any confidential information as a result of its access to any Item of Equipment, the Authority hereby agrees not to disclose such information to any person, firm or corporation, unless compelled or required to do so by law.
Section 2.9 Disclaimer of Warranties. THE AUTHORITY, BY DELIVERY OF THIS LEASE, MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR FITNESS FOR USE OF ANY ITEM OF EQUIPMENT, OR WARRANTY WITH RESPECT THERETO. The Municipality represents that the Authority has not participated in the drafting of specifications, the selection of a manufacturer or supplier or the award of the bid for any Item of Equipment purchased by the Municipality. In no event shall the Authority be liable for any damages, incidental, indirect, special, consequential or otherwise, in connection with or arising out of this Lease or the existence, furnishing, maintenance, functioning or the Municipality's use of any Item of Equipment or products or services provided for in this Lease.
Section 2.10 Manufacturers' Warranties. So long as the Municipality shall not be in default hereunder, the Authority hereby appoints the Municipality as its agent and attorney-in-fact during the Lease Term for each Item of Equipment, to assert from time to time whatever claims and rights, including warranties of such Item of Equipment, which the Authority may have against the manufacturer or supplier of such Item of Equipment. The Municipality's sole remedy for the breach of such warranty, indemnification or representation shall be against the manufacturer or supplier of such Item of Equipment and not against the Authority, nor shall such matter have any effect whatsoever on the rights of the Authority with respect to this Lease, including the right to receive full and timely Lease Payments hereunder. The Municipality expressly acknowledges that the Authority does not
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ARTICLE III event a dispute arises between the Authority and the Municipality with respect to the amount of Basic Rent due and owing by the Municipality, or the credits to be applied RENTALS AND OTHER PAYMENTS toward the Municipality's Basic Rent obligation, such dispute shall be resolved by the Authority. The Trustee shall have no obligation with respect thereto, except that the Section 3.1 Payment of Rentals. By execution hereof, the Municipality Trustee will cooperate in providing account statements and information with respect agrees to repay to the Authority the Cost of all Items of Equipment acquired by the thereto. Notwithstanding any credits which may accrue to the Municipality during Authority with the proceeds of the Series 2014 Bonds and Additional Rent in connection the Lease Term, the Municipality is obligated to pay all amounts which constitute therewith as follows: (a) The Municipality shall pay to the Trustee at the address shown Basic Rent and Additional Rent which are due under this Lease as set forth in on Exhibit I annexed hereto and incorporated by this reference herein, or at such other Exhibit A hereto. address as the Municipality may from time to time be notified in accordance with Section 9.7 hereof, as Basic Rent for the Equipment, on each Lease Payment Date, an (d) Any Rentals pursuant to this Section 3.1 which are not paid by the amount in accordance with the schedule of Basic Rent payments described in Exhibit A Municipality on or before the due date thereof shall, from and after said due date, bear as modified by any Substitution Certificate annexed hereto as Exhibit G delivered by the interest (to the extent permitted by law) at the highest rate per annum borne by any of Municipality pursuant to Section 8.1(b) hereof, which, together with other moneys and the Series 2014 Bonds until paid, time being of the absolute essence of this obligation. interest and investment earnings available therefor, if any, in the Municipal Account in Any moneys owed by the Municipality pursuant to this paragraph shall constitute the Debt Service Fund and the Municipal Account in the Proceeds Fund pursuant to the Additional Rent and shall be paid to the Trustee. provisions of this Lease and the Bond Resolution, will equal the Municipality's Basic Rent obligation which is to be applied to the payment of Debt Service due on the Series (e) All Basic Rent and Additional Rent payments by the Municipality 2014 Bonds on the next succeeding Interest Payment Date and Principal Installment shall be made in immediately available funds. Date, as applicable. Notwithstanding the above, in the event the Municipality shall fail to make Basic Rent payments in accordance herewith, the Authority shall have the (f) By execution hereof, the Municipality expressly acknowledges the option of requiring the Municipality to make Basic Rent payments on a monthly or Authority’s right to bring an action for immediate injunctive relief or other judicial quarterly basis. proceedings to compel compliance and to enforce the Municipality's full and timely payment of Basic Rent payments hereunder. (b) The Municipality shall pay to the Trustee, as the same shall become due and payable at any time during the Lease Term, on any Lease Payment Section 3.2 Indemnification of Authority and County. Both during the Date or thirty (30) days after written demand by the Trustee, such sums as represent Lease Term and thereafter, the Municipality shall indemnify and hold the Authority and Additional Rent, including Authority Administrative Expenses and County Guarantee County harmless against, and the Municipality shall pay any and all, liability, loss, cost, Costs as shall have been submitted by the Authority and the County to the Trustee and damage, claim, judgment or expense, of any and all kinds or nature and however to an Authorized Municipal Representative as contained in a certificate executed by an arising, other than as a result of the gross negligence or willful misconduct of the Authorized Authority Representative or Authorized County Representative, as Authority or the County, their members, officers, agents, professionals, servants or applicable. employees, which the Authority or County may sustain, be subject to or be caused to incur by reason of any claim, suit or action based upon personal injury, death, or (c) Attached hereto as Exhibit A is a Basic Rent payment schedule for damage to property, whether real, personal or mixed, or upon or arising out of contracts the Items of Equipment to be purchased by the Municipality on behalf of the Authority. entered into by the Municipality relating to the Equipment, or the bidding or award The Authority shall deliver to the Municipality and the Trustee a certificate from time to thereof by the Municipality, or arising out of the Authority's ownership of the Equipment time as necessary which reflects credits, if any, to be applied toward the Basic Rent or the leasing thereof to the Municipality, or arising out of the acquisition, installation, obligation of the Municipality in accordance with the provisions hereof and the Bond use, operation or maintenance of the Equipment pursuant to this Lease, or arising out of Resolution. In accordance with the Bond Resolution, the Municipality shall be notified or caused by any untrue or misleading statement of a material fact relating to the annually in writing by the Trustee of the amounts arising from investment earnings, if Municipality in the Official Statement of the Authority for the Bonds (the "Official any, but such amounts shall not be applied as a credit against Basic Rent payment Statement") or any omission of any material fact relating to the Municipality in the obligations of the Municipality and shall (i) be transferred by the Trustee to the Official Statement. It is mutually agreed by the Municipality and the Authority that none Operating Fund to pay the amount equal to the Municipality’s pro rata share of Authority of the Authority, the County or their respective members, officers, agents, professionals, Administrative Expenses and County Guarantee Costs for each Bond Year, and (ii) servants or employees shall be liable in any event for any action performed under this following such transfer to the Operating Fund, if moneys remain, be transferred by the Lease and that the Municipality shall save the Authority and the County harmless from Trustee or remain in the Municipal Account in the Proceeds Fund and shall be applied any claim or suit of whatsoever nature arising hereunder except for such claims or suits in accordance with the provisions of Section 507(6) of the Bond Resolution. In the arising as a result of the Authority's or County's gross negligence or willful misconduct.
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This provision shall survive the end of the Lease Term and the final maturity of the outlined in Section 505(3) of the Bond Resolution and the provisions outlined in Section Series 2014 Bonds. 6 of the County Guarantee.
The Municipality, at its own cost and expense, shall defend any and all Section 3.3 Nature of Obligations of the Municipality. The such claims, suits and actions which may be brought or asserted against the Authority Municipality shall be obligated to pay all amounts under this Lease which constitute or the County, their respective members, officers, agents, professionals, servants or Basic Rent, and Additional Rent, including Authority Administrative Expenses and employees relating to the performance of their obligations hereunder; but this provision County Guarantee Costs, which amounts shall be sufficient to amortize Debt Service on shall not be deemed to relieve any insurance company which has issued a policy of the Series 2014 Bonds, to pay all costs of administering the program and to fulfill its insurance as may be provided for in this Lease from its obligation to defend the payment obligations hereunder. The obligation of the Municipality to pay Rentals Municipality, the Authority, the County and any other insured named in such policy of and to pay all other amounts provided for in this Lease and to perform its insurance in connection with claims, suits or actions covered by such policy. The obligations under this Lease shall be absolute and unconditional, and such Municipality agrees that it shall give the Authority, the Trustee and the County prompt Rentals and other amounts shall be payable without any rights of set-off, notice, in writing, of the Municipality's actual or constructive knowledge of the filing of recoupment or counterclaim it might have against the Authority, the Trustee, the each such claim and the institution of each such suit or action. County or any other person and whether or not the Equipment is purchased or is used by the Municipality or available for use by the Municipality. The Authority, on behalf of itself and the County, as applicable, agrees that it: The Municipality will not terminate this Lease or be excused from performing its obligations hereunder or be entitled to any abatement of its obligation to (i) shall give the Authorized Municipal Representative prompt pay Rentals or any other amounts hereunder for any cause including, without limiting notice in writing upon its actual or constructive knowledge of the filing of the generality of the foregoing, any acts or circumstances that may constitute an each such claim and the institution of each such suit or action; eviction or constructive eviction, failure of consideration, failure of title, or frustration of purpose, or any damage to or destruction of the Equipment, or the taking by eminent (ii) shall not adjust, settle or compromise any such claim, suit or domain of title to or the right of temporary use of all or any part of the Equipment, or the action; and failure of the Authority or the County to perform and observe any agreement or covenant, whether expressed or implied, or any duty, liability or obligation arising out of (iii) shall permit the Municipality to assume full control of the or connected with this Lease. adjustment, settlement, compromise or defense of each such claim, suit or action. Notwithstanding the foregoing, the Municipality shall keep the Section 3.4 Municipal Lease Payment Obligation. Notwithstanding Authority and the County informed as to the progress of any suit, claim or anything in this Lease to the contrary, the cost and expense of the performance by the action, and the Municipality shall not reach a final settlement, adjustment Municipality of its obligations under this Lease and the incurrence of any liabilities of the or compromise without the Authority's and the County's, as applicable, Municipality under this Lease, including, without limitation, the obligation for the prior approval, which approval shall not be unreasonably withheld. payment of all Basic Rent and Additional Rent and all other amounts required to be paid by the Municipality under this Lease, and the reimbursement of the County for County Any cost incurred by the Authority for its own attorneys, experts' testimony Guarantee Costs, is a direct and general obligation for which the full faith and credit of costs and any and all costs to defend the Authority or any of its directors, officials, the Municipality is hereby pledged, which obligation is not subject to municipal members, officers, agents, servants or employees with respect to matters arising appropriation and, unless the Rentals and such other amounts required to be paid by hereunder shall be paid to the Trustee for the benefit of the Authority by the Municipality the Municipality under this Lease are paid from other sources, the Municipality shall be as an Authority Administrative Expense constituting Additional Rent under Section obligated to levy ad valorem taxes on all taxable property within the Municipality without 3.1(b) hereof and shall be paid to the Authority by the Trustee in accordance with the limitation as to rate or amount. provisions outlined in Section 505(3) of the Bond Resolution. Section 3.5 Municipal Prepayment in the Event of Optional Any cost incurred by the County for its own attorneys, experts' testimony Redemption. In addition to the option of the Municipality under Section 8.2 hereof to costs and any and all costs to defend the County or any of its directors, officials, purchase each Item of Equipment at the end of the Lease Term, in the event of the members, officers, agents, servants or employees with respect to matters arising exercise of an optional redemption of the Series 2014 Bonds by the Authority, the hereunder shall be paid to the Trustee for the benefit of the County by the Municipality Municipality shall be obligated to make prepayments in whole or in part of such as County Guarantee Costs constituting Additional Rent under Section 3.1(b) hereof payments due as aforesaid of Basic Rent, together with interest accrued and to accrue and shall be paid to the County by the Trustee in accordance with the procedures and, as applicable, redemption premium, if any, to be paid on the applicable Series
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2014 Bonds. The Trustee shall apply such prepayments in such manner consistent with ARTICLE IV the Authority's directives and with the provisions of the Bond Resolution. LEASE TERM; RENEWAL Any such whole or partial prepayment of Basic Rent by the Municipality shall be applied by the Trustee to the redemption of the Series 2014 Bonds and the Section 4.1 Lease Term for Item(s) of Equipment. The Lease Term for Municipality shall be entitled to a credit for the principal amount of Series 2014 Bonds all Items of Equipment shall terminate when the Series 2014 Bonds are no longer redeemed against the amount or amounts due under the provisions of Section 3.1(a) Outstanding and when the Municipality shall have paid to the Authority, County and hereof to the extent such principal amount of Series 2014 Bonds is similarly credited Trustee all amounts due and owing pursuant to the provisions of this Lease. Except as pursuant to the Bond Resolution against Basic Rent required to be made by the set forth above, the Lease Term for all Items of Equipment will not terminate for any Municipality and deposited in the Municipal Account in the Debt Service Fund. reason, including all events specified in Sections 7.1 and 7.2 hereof.
Section 3.6 Nature of Obligations of the Authority. The cost and Notwithstanding the above, in the event a Municipality fails to comply with expense of the performance by the Authority of any of its obligations under this Lease the provisions of this Lease, the Authority, County and Trustee may pursue remedies in shall be limited to the availability of the proceeds of Series 2014 Bonds of the Authority accordance with Article VII hereof. issued for such purposes or from other funds received by the Authority under this Lease and available for such purposes. Section 4.2 Effect of Noncompliance with Lease Provisions. (a) Upon the occurrence of an event referred to in Section 7.1 hereof, the Municipality shall Section 3.7 Assignment of Rental Payments by Authority. It is return to the Authority each such Item of Equipment for which the Municipality is in understood that all of the Authority's rights to receive Rentals under this Lease (except default, or the Authority may, at its option and in its discretion, determine which Item of its right to payments pursuant to Section 3.2 hereof) are to be assigned by the Authority Equipment shall be returned to the Authority for sale in accordance with the provisions to the Trustee pursuant to the Bond Resolution for the benefit of the Bondholders. hereof and the Municipality shall continue to be liable for (1) the payment of Applicable Basic Rent with respect to each such Item of Equipment and Additional Rent scheduled The Municipality agrees to pay to the Trustee at its principal institutional to become due on any succeeding Lease Payment Date or upon demand, as trust office all Rentals payable by the Municipality to the Authority pursuant to this Lease applicable, (2) the payment of any general, special, incidental, consequential or other (except payments made directly to the Authority pursuant to Section 3.2 hereof). damages resulting from such event of default and (3) any other loss suffered by the Except as provided in this Section 3.7 and the Bond Resolution, the Authority shall not Authority and the County as a result of the Municipality's failure to take such actions as assign this Lease or any payments under this Lease. Except as provided in Sections required. 2.3, 3.7, 7.2 or 8.1 of this Lease, the Authority shall not sell, assign or otherwise encumber its interest in the Equipment. (b) If the Municipality shall be required to return any Item of Equipment in the possession of the Municipality to the Authority prior to the payment of all Basic Rent and Additional Rent pursuant to the provisions hereof, the Municipality shall return the applicable Item of Equipment to the Authority at the location specified by the Authority, at the Municipality's expense, in the condition, repair, appearance and working order that the Municipality is required to maintain such Item of Equipment under this Lease, within ten (10) days of such request in accordance with the instructions of the Authority. Upon the Authority's receipt of such Item of Equipment, the Authority may sell the same in such manner as it deems appropriate, and the Municipality shall have no further rights whatsoever with respect thereto or claims against the Authority with respect to the sale thereof.
(c) Moneys from such sale (net of expenses incurred by the Authority in the sale thereof) shall be paid over to the Trustee and deposited in the Municipal Account in the Proceeds Fund and applied by the Trustee in the following order of priority in accordance with the written direction of the Authority: first, to be applied as a credit toward the payment of the Municipality's Basic Rent obligations hereunder due on the next succeeding Lease Payment Date pursuant to Section 507 of the Bond
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Resolution and second, to reimburse the County for County Guarantee Costs in ARTICLE V accordance with Section 709 of the Bond Resolution. COVENANTS OF MUNICIPALITY (d) Amounts remaining in the Municipal Account in the Proceeds Fund from the sale of Equipment after the application of moneys therein pursuant to Section Section 5.1 Maintenance of Equipment by Municipality. The 4.2(c) hereof and Section 507 of the Bond Resolution shall be applied, at the direction Municipality agrees that at all times during each Lease Term for each Item of of the Authority, as a credit toward any other Additional Rent payments of the Equipment, the Municipality will, at the Municipality's own cost and expense, maintain, Municipality due and owing prior to the final Debt Service payment of the Series 2014 preserve and keep such Item of Equipment in good repair, working order and condition, Bonds attributable to such Municipality. and that the Municipality will make or cause to be made all necessary and proper repairs, replacements and renewals thereto. The Authority and the County shall have (e) In the event there are any moneys remaining in the Municipal no responsibility in any of these matters, or for the making of improvements or additions Account in the Proceeds Fund from the sale of such Equipment after application of such to such Item of Equipment. moneys by the Trustee in accordance with subsections (b), (c) and (d) hereof and upon the final maturity of the Series 2014 Bonds, such moneys shall be paid to the Section 5.2 Taxes, Other Governmental Charges and Utility Charges. Municipality, upon receipt by the Trustee of a written directive of the Authority with In the event the ownership, leasing, use, possession or acquisition of any Item of respect thereto. Equipment is found to be subject to taxation in any form, the Municipality will pay during the related Lease Term, as the same respectively come due, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to any Item of Equipment and any equipment or other property acquired by the Municipality as permitted under this Lease in substitution for, as a renewal or replacement of, or a modification, improvement or addition to, any Item of Equipment, as well as all utility and other charges incurred in the operation, maintenance, use, preservation, occupancy and upkeep of any Item of Equipment; provided that, with respect to any governmental charges that may lawfully be paid in installments over a period of years, the Municipality shall be obligated to pay only such installments as have accrued during the time the related Lease Term is in effect.
Section 5.3 Provisions Regarding Insurance. At its own expense, the Municipality shall cause casualty, public liability and property damage insurance to be carried and maintained, or shall demonstrate, to the satisfaction of the Authority, that adequate self-insurance is provided with respect to each Item of Equipment, sufficient in each case to replace such Item of Equipment and to protect the Authority from liability under all circumstances. The Municipality shall provide evidence of such insurance to the Authority and Trustee at the time its Acceptance Certificate is delivered to the Authority and Trustee upon the delivery of each Item of Equipment. The Municipality agrees to maintain and the Authority agrees to accept evidence of blanket insurance coverage which applies to all lease purchase agreements. The Municipality will provide a copy of a blanket insurance policy or policies to the Authority as evidence of such coverage upon acceptance of the Equipment as provided in Section 2.3(c) hereof. All insurance policies shall provide that the Authority and the Trustee shall be provided with notice of renewal, cancellation or material changes to such policy thirty (30) days prior thereto. If the Municipality maintains a program of self-insurance for similar properties, the Municipality may insure each Item of Equipment in its self-insurance program and shall provide an adequate insurance fund to pay losses. Notwithstanding the above, if the Municipality elects to self insure Equipment acquired hereunder, in the event the Equipment is damaged or destroyed the Municipality shall immediately pay over to the
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Authority all moneys for such damage or loss for deposit with the Trustee to be applied share of Authority Administrative Expenses and County Guarantee Costs for each Bond in accordance with Section 5.4 hereof. Year, and (ii) following such transfer to the Operating Fund, if moneys remain, remain in the Municipal Account in the Proceeds Fund and shall be applied in accordance with the Any insurance policy maintained pursuant to this Section 5.3 shall be so provisions of Section 507(6) of the Bond Resolution. written or endorsed as to make losses, if any, payable to the Municipality, the Authority, the Trustee and the County as their respective interests may appear. The Proceeds of In the event the Municipality is in default under the provisions of this the insurance required in this Section 5.3 shall be applied as provided in Section 5.4 Lease, the Authority, upon written direction of an Authorized Authority Representative to and Section 5.5 hereof. the Trustee, shall elect Option A or Option B in accordance with the provisions of this Section 5.4. Section 5.4 Damage, Destruction or Condemnation. If any Item of Equipment is destroyed or is damaged by fire or other casualty, or title to, or the Section 5.5 Insufficiency of Proceeds. If the Municipality elects to temporary use of, such Item of Equipment shall be taken under the exercise of the repair, restore or replace any Item of Equipment under the terms of Section 5.4(a) power of eminent domain, the Municipality shall, as long as the Municipality is not in hereof and the Proceeds therefor are insufficient to pay in full the cost of such repair, default under the provisions of this Lease, within sixty (60) days after such damage, restoration or replacement, the Municipality shall complete the work and pay any Cost in destruction or condemnation elect one (1) of the following two (2) options by written excess of the amount of the Proceeds, and the Municipality agrees that, if by reason of notice of such election to the Authority and the Trustee: any such insufficiency of the Proceeds, the Municipality shall make any payments pursuant to the provisions of this Section 5.5, the Municipality shall not be entitled to (a) Option A - Repair, Restoration or Replacement. The Municipality, any reimbursement therefor from the Authority nor shall the Municipality be entitled to the Authority and the Trustee will cause the Proceeds of any insurance claim or any diminution or offset of the amounts payable under this Lease. condemnation award to be applied to the prompt repair, restoration or replacement (in which case such replacement of any Item of Equipment shall become subject to the Section 5.6 Advances. In the event the Municipality shall fail to maintain provisions of this Lease as fully as if it were the originally leased Item of Equipment) of the full insurance coverage required by this Lease or shall fail to keep any Item of such Item of Equipment. Any Proceeds received by the Authority shall be deposited in Equipment in good repair and operating condition, the Authority may (but shall be under the Municipal Account in the Acquisition and Improvement Fund and shall be applied by no obligation to) purchase the required policies of insurance and pay the premiums on the Trustee to complete the payment of the cost of such repair, restoration or the same, or make such repairs or replacements as are necessary and provide for replacement, in the same manner and upon the same conditions as set forth in the payment thereof; and all amounts so advanced therefor by the Authority shall become Bond Resolution for the payment of the Cost of the Equipment from the Municipal immediately due and payable as Additional Rent, which amounts, together with interest Account in the Acquisition and Improvement Fund. In accordance with a certificate of at the highest rate permitted by law until paid, the Municipality agrees to pay to the an Authorized Municipal Representative delivered to the Trustee, any balance of the Authority. Proceeds remaining after the repair, restoration or replacement of such Equipment shall be transferred by the Trustee to the Municipal Account in the Debt Service Fund and Section 5.7 Financial Reports. The Municipality covenants to provide shall be applied by the Trustee as a credit toward the Basic Rent obligations of the annually to the Authority, the County and the Trustee in a reasonable time, but in no Municipality on any Lease Payment Date in accordance with Section 503(7) and (8) of event more than thirty (30) days after the same have been received by the Municipality the Bond Resolution. Notwithstanding the above, the Municipality shall continue to pay (i) current financial statements and budgets for the ensuing Fiscal Year and (ii) such Basic Rent and Additional Rent on all Items of Equipment. other financial information relating to the ability of the Municipality to continue to meet its obligations under this Lease as may be reasonably requested by the Authority and the (b) Option B - Deposit to Proceeds Fund. The Municipality, the County. Trustee and the Authority will cause the Proceeds of any insurance claim or condemnation award to be deposited in the Municipal Account in the Proceeds Fund Section 5.8 Performance Bonds and Other Guaranty. In the event an and the Trustee shall apply such Proceeds as a credit toward the Basic Rent obligations advance, partial or progress payment is to be made with respect to any Item of of the Municipality in accordance with the provisions of Section 507(1) and (2) of the Equipment pursuant to Section 2.5(h) hereof, the Municipality shall cause the vendor, Bond Resolution. The Municipality shall continue to pay Basic Rent and Additional Rent contractor or subcontractor qualified to do business in the State for such Item of on all Items of Equipment. Equipment to provide a performance bond or bonds, a letter of credit or any other form of financial guaranty covering with respect to such Item of Equipment (1) performance (c) All interest earned or any gain realized on any moneys or of the contract and (2) payment for labor and materials. investments in the Municipal Account in the Proceeds Fund shall (i) be transferred by the Trustee to the Operating Fund to pay the amount equal to the Municipality’s pro rata
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Any performance bond or bonds, letter of credit or other form of financial owing to the Authority by the Municipality by reason of the Municipality's failure to guaranty shall be executed by a responsible surety company qualified to do business in comply with the provisions set forth in this Section 5.11 and Section 2.3 hereof. the State and shall in each case be in an amount not less than one hundred percent (100%) of the contract price. Any performance bond, letter of credit or other form of Section 5.12 Representations and Warranties of Municipality. The financial guaranty provided pursuant to this Section 5.8 shall be made payable to the Municipality represents and warrants as follows: Municipality and the Authority as their respective interests may appear. The Proceeds from any performance bond provided pursuant to this Section 5.8 shall be paid over to (a) It is a public body corporate and politic duly organized and existing the Trustee for deposit into the Municipal Account in the Proceeds Fund and applied as under the laws of the State of New Jersey, and is authorized and empowered to enter a credit toward the Basic Rent obligations of the Municipality hereunder in accordance into the transactions contemplated by this Lease and to carry out its obligations with the provisions of Section 507(1) and (2) of the Bond Resolution. hereunder. By proper action of its governing body, it has duly authorized the execution and delivery of this Lease. Section 5.9 Net Lease. This Lease shall be deemed and construed to be a "net lease", and the Municipality shall pay absolutely net during the Lease Term (b) The execution and delivery of this Lease, and the compliance with the Rentals and all other payments required under this Lease, free of all deductions, the provisions hereof, will not conflict with or constitute on the part of the Municipality a without abatement, diminution and set-off, except as otherwise specifically provided for violation of, breach of or default under its by-laws or any statute, indenture, mortgage, hereunder. deed of trust, note agreement or other agreement or instrument to which the Municipality is bound, or, to the knowledge of the Municipality, any order, rule or Section 5.10 Compliance with Laws. The parties to this Lease agree to regulation of any court or governmental agency or body having jurisdiction over the comply with all laws of the State applicable to the performance of this Lease. Municipality or any of its activities or properties; and all consents, approvals, authorizations and orders of governmental or regulatory authorities which are required Section 5.11 Covenant Not To Affect the Tax Exempt Status of the for the consummation of the transactions contemplated hereby have been obtained. Series 2014 Bonds. (1) The Municipality covenants and agrees that it shall not take any action or omit to take any action which would result in the loss of the exclusion of (c) There is no action, suit, proceeding or investigation at law or in the interest on any Series 2014 Bonds from gross income for purposes of Federal equity pending against the Municipality by or before any court or public agency, or, to income taxation as that status is governed by section 103(a) of the Code but only to the the best of the knowledge of the Municipality, any basis therefor, wherein an extent that the Authority intended at the time of the original issuance of such Series unfavorable decision, ruling or finding would adversely affect the transactions 2014 Bonds that the interest thereon be so excludable from gross income for purposes contemplated hereby, or which in any way would adversely affect the validity of this of Federal income taxation. Lease, or any agreement or instrument to which the Municipality is a party and which is used or contemplated for use in the consummation of the transactions contemplated (2) Unless the Municipality receives the prior written approval of the hereby. Authority, the Municipality shall neither (A) permit any of either (i) the proceeds (such term to have the same meaning as when used in section 141(b) of the Code) of the (d) No legislation has been enacted which in any way adversely affects Series 2014 Bonds paid to the Municipality for the Equipment or (ii) the Equipment the execution and delivery of this Lease by the Municipality, or the creation, financed (or refinanced) with the proceeds of the Series 2014 Bonds paid to the organization or existence of the Municipality or the titles to office of any officers thereof, Municipality, to be used (directly or indirectly) in any manner that would constitute or the power of the Municipality to carry out its obligations under this Lease. "private business use" within the meaning of section 141(b)(6) of the Code, nor (B) use (directly or indirectly) any of the proceeds of the Series 2014 Bonds paid to the (e) Except as otherwise disclosed in the Official Statement pertaining Municipality, to make or finance loans to persons other than governmental units (as to the offering and sale of the Series 2014 Bonds, the Municipality is not a party to any such term is used in section 141(c) of the Code). indenture, loan or credit agreement or any other agreement, resolution, contract, instrument, pension plan, pension trust, employee benefit or welfare plan, or subject to (3) Neither the Municipality nor any of its officers or members shall, any restriction which may reasonably be expected to have an adverse effect on its pursuant to any arrangement, formal or informal, issue bonds in an amount related to properties, assets, operations or conditions, financial or otherwise, or on its ability to the amount or for the purpose of payment of the Municipality's Rentals for the carry out its obligations under this Lease. Equipment. Section 5.13 Municipal Notice: Appropriation for Lease Payments. (4) The County shall have no obligation under the County Guarantee to The Municipality shall provide to the Authority, the Chief Financial Officer of the County pay to the Authority on behalf of the Municipality any moneys that may be due and or its designee and the Trustee on an annual basis as long as the County Guarantee is
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in effect and any Debt Service payments on the Series 2014 Bonds attributable to the Disclosure Agreement) may take such actions as set forth in the Continuing Disclosure Municipality remain Outstanding, within five (5) Business Days after the adoption of a Agreement as may be necessary and appropriate to cause the Municipality to comply temporary budget and/or the filing of the annual budget as introduced by the with its obligations set forth under this Section 5.15 and in the Continuing Disclosure Municipality with the Division of Local Government Services, a certificate of the Chief Agreement. Financial Officer of the Municipality certifying that the temporary budget and/or the annual budget contains a line item which represents an amount due under this Lease for all Rental Payments due during the Municipality's Fiscal Year. Such certificate shall have attached a copy of the page of the temporary budget and/or the budget on which the line item appears. The Municipality shall also provide to the Trustee, the Authority and the Chief Financial Officer of the County or its designee, within five (5) Business Days thereof, notice of any revisions to such line item or the transfer of any moneys out of such line item. In the event such certificate described in the first sentence of this Section 5.13 is not received by the Trustee within sixty (60) days following the beginning of the Municipality's Fiscal Year or the Trustee otherwise has actual knowledge that the Municipality has revised its budget or transferred money out of a line item, the Trustee shall notify the Authority and the Chief Financial Officer of the County or its designee of such event(s) and the Authority and the County may take immediate action to cause all Rental Payments to be timely paid by the Municipality. For the purposes of this provision, the Trustee shall be deemed to have actual knowledge only if an officer of the institutional trust department of the Trustee has actual knowledge thereof.
By execution hereof, the Municipality expressly acknowledges the County's right to bring an action for immediate ex parte injunctive relief or other judicial proceeding to compel the Municipality to provide an appropriation for Lease Payments due under this Lease.
The Municipality shall also notify the Trustee, the Authority and the County of any change in the Fiscal Year of the Municipality within ten (10) Business Days of the adoption of the authorization therefor by the governing body of the Municipality.
Section 5.14 Third Party Beneficiaries. The Municipality and Authority by the execution hereof acknowledge that the covenants, representations and warranties set forth herein are for the benefit of the Trustee and the County.
Section 5.15 Secondary Market Disclosure. If, as determined by the Authority in its sole discretion, the Municipality is an Obligated Person as such term is defined in Rule 15c2-12 promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 (the "Rule"), the Municipality covenants and agrees that as an Obligated Person pursuant to the Rule that it will execute, deliver, comply with and carry out the provisions of a Continuing Disclosure Agreement with the Authority (the "Continuing Disclosure Agreement"), which will set forth the obligation of the Municipality to file budgetary, financial and operating data on an annual basis and notices of certain enumerated events as required to comply with and in accordance with the provisions of the Rule. Notwithstanding any other provision of this Lease, the failure of the Municipality to comply with the provisions of the Continuing Disclosure Agreement shall not constitute an event of default pursuant to Article VII hereof and the Beneficial Owner of the Bonds (as defined in the Continuing
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ARTICLE VI ARTICLE VII
TITLE EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Title To Equipment. During the Lease Term, title to the Section 7.1 Events of Default. An "event of default" or a "default" shall Equipment and any and all additions, repairs, replacements or modifications thereto mean, whenever used in this Lease, any one or more of the following events: shall be in the name of the Authority. (a) Failure by the Municipality to pay or cause to be paid when Section 6.2 Liens. During the Lease Term of each Item of Equipment, due the payments to be paid under Section 3.1(a) hereof; the Municipality shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to such (b) Failure by the Municipality to pay when due any payment to Item of Equipment, and the respective rights of the Authority and the Municipality as be made under this Lease (other than payments under Section 3.1(a) herein provided. The Municipality shall reimburse the Authority for any expense hereof) which failure shall continue for a period of thirty (30) days after incurred by the Authority in order to discharge or remove any such mortgage, pledge, written notice thereof, specifying such failure and requesting that it be lien, charge, encumbrance or claim. remedied, is given to the Municipality by the Authority, the County or the Trustee; Section 6.3 Personal Property. Each Item of Equipment is and shall at all times be and remain personal property notwithstanding that such Item of Equipment (c) Failure by the Municipality to observe and perform any or any part thereof may be or hereafter become in any manner affixed or attached to or covenant, condition or agreement on its part to be observed or performed embedded in or permanently rested upon real property or any improvement thereon. (other than as referred to in subsections (a) and (b) of this Section 7.1), which failure shall continue for a period of sixty (60) days after written Section 6.4 Use of the Equipment. The Municipality will not install, use, notice, specifying such failure and requesting that it be remedied, is given operate or maintain any Item of Equipment improperly, carelessly, in violation of any to the Municipality by the Authority or the Trustee, unless the notifying applicable law or in a manner contrary to that contemplated by this Lease. The party shall agree in writing to an extension of such time prior to its Municipality shall provide all permits and licenses, if any, necessary for the installation, expiration; provided, however, if the failure stated in the notice cannot be maintenance, use and operation of each Item of Equipment. In addition, the corrected within the applicable period, the notifying party will not Municipality agrees to comply in all respects (including, without limitation, with respect unreasonably withhold its consent to an extension of such time if to the use, maintenance and operation of each Item of Equipment) with all laws of the corrective action is instituted by the Municipality within the applicable jurisdictions in which its operations involving any Item of Equipment may extend and period and diligently pursued until the default is remedied; provided that, with all regulations, orders and decrees of any legislative, executive, administrative or the failure of the Municipality to comply with the provisions of Section 5.15 judicial body exercising any power or jurisdiction over any Item of Equipment; provided, hereof or the Continuing Disclosure Agreement shall not constitute an however, that the Municipality, at its sole cost and expense, may contest in good faith event of default hereunder; or the validity or application of any such law or rule in any reasonable manner which does not adversely affect the interest or rights of the Authority in and to any Items of (d) The filing of a petition by the Municipality under any Federal Equipment or its interest or rights under this Lease, provided the Municipality so notifies or state bankruptcy or insolvency law or other similar law in effect on the the Authority. date of this Lease or thereafter enacted; or the Municipality shall become insolvent or bankrupt or make an assignment for the benefit of its creditors; or a custodian (including, without limitation, a receiver, liquidator or trustee) of the Municipality or any of its property or assets shall be appointed by court order or take possession of the Municipality or its property or assets if such order remains in effect or if such possession continues for more than thirty (30) days.
The foregoing provisions of subsection (c) of this Section 7.1 are subject to the following limitations: if by reason of acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the government of the United States or of the State or any department, agency, political subdivision (not
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including the County or the Municipality) or official of either of them, or any civil or reimbursed for County Guarantee Costs and all costs of the Authority, if any, shall have military authority; insurrections; riots; epidemics; landslides; lightning; earthquakes; been paid, any remaining amounts collected pursuant to actions taken under subsection fires; hurricanes; tornadoes, blizzards, or other storms; floods; washouts; droughts; (c) of this Section 7.2 shall be paid to the Municipality by the Trustee. arrests; restraint of government and people; civil disturbances; explosions; breakage or accident to machinery; partial or entire failure of utilities; or any cause or event not Section 7.3 Reinstatement. Notwithstanding the provisions of Sections reasonably within the control of the Municipality, the Municipality is unable, in whole or 4.1, 4.2 and 7.2 hereof, if, after the acceleration of the Rental Payments upon in part, to carry out its agreements herein contained, the Municipality shall not be occurrence of an event of default, all arrears of interest on such overdue Rental deemed to be in default during the continuance of such inability. The Municipality Payments and the Rental Payments which have become due and payable otherwise agrees, however, to use its best efforts to remedy with all reasonable dispatch the than by acceleration, and all other sums payable under this Lease, except Rental cause or causes preventing it from carrying out its agreements; provided, that the Payments due and payable as a result of acceleration, shall have been paid by or for settlement of strikes, lockouts and other disturbances shall be entirely within the the account of the Municipality or provision satisfactory to the Trustee shall have been discretion of the Municipality, and the Municipality shall not be required to make made, all other things shall have been performed in respect of which there was a default settlement of strikes, lockouts and other disturbances by acceding to the demands of or provision deemed by the Trustee to be adequate shall be made therefor and there opposing party or parties when such course is in the judgment of the Municipality shall have been paid the reasonable fees and expenses, including Additional Rent, unfavorable to the Municipality. Authority Administrative Expenses (including reasonable attorneys' fees paid or incurred) and County Guarantee Costs, where applicable, and such acceleration under Notwithstanding the above, an Event of Default under this Article VII shall this Lease is rescinded, the Trustee shall waive the Municipality's default without further not be construed as an Event of Default under the Bond Resolution. action by the Authority and the Authority and the Trustee shall be restored to their former positions and rights under the Bond Resolution and this Lease. Upon such Section 7.2 Remedies. Whenever any Event of Default referred to in payment and waiver, this Lease shall be fully reinstated as if it had never been Section 7.1 hereof shall have happened and be continuing, any one or more of the accelerated. No such restoration of the Authority and the Trustee shall extend to or following remedial steps may be taken, provided that, where applicable, written notice of affect any subsequent default under the Bond Resolution or impair any right consequent the default has been given to the Municipality by the Authority or by the Trustee and the or incidental thereto. default has not been cured: Section 7.4 Payments by County. (a) If an event of default referred to (a) the Authority may take possession of each Item of in Section 7.1 (a) hereof shall have happened and be continuing and there remains Equipment to which a default applies without terminating this Lease and outstanding Basic Rent payments which have not been paid to the Trustee pursuant to sell such Equipment for the account of the Municipality, and shall continue the terms of this Lease (which determination shall be made by the Trustee as at the to hold the Municipality liable for the Rental Payments due and owing close of business on any Lease Payment Date), the Trustee, on behalf of the Authority, under this Lease to the Authority and to the County for County Guarantee shall notify the nonpaying Municipality, the Authority and the Chief Financial Officer of Costs; the County or its designee, in writing not later than 3:00 p.m. of the second Business Day after such Lease Payment Date, of the failure of the Municipality to pay its Basic (b) the Authority may accelerate the Rental Payments owed by Rent on the Lease Payment Date, which notice shall state the amount of any such the Municipality for each Item of Equipment, holding the Municipality liable deficiency as at the close of business on the Lease Payment Date, the identity of the for all Rent and other amounts due to the Authority under the terms of this defaulting Municipality, the date by which the deficiency must be cured by the Lease, including County Guarantee Costs to the extent the County Municipality (which date shall not be later than thirty (30) days before the next ensuing remains unreimbursed therefor; and Interest Payment Date and Principal Installment Date, as applicable). If the nonpayment of the Municipality is not cured thirty (30) days prior to the applicable Interest Payment (c) the Authority and the County may take whatever action at Date and Principal Installment Date in accordance with the provisions of such notice, law or in equity which may appear necessary or desirable to collect the the Trustee shall so notify the County in writing and the County shall pay to the Trustee payments then due and thereafter to become due, or to enforce the not later than two (2) Business Days prior to such Interest Payment Date and Principal performance and observance of any obligation, agreement or covenant of Installment Date, as applicable, any and all amounts in immediately available funds the Municipality under this Lease. required to pay Debt Service on the Series 2014 Bonds allocable to such Municipality for such Interest Payment Date and Principal Installment Date, as applicable. Any amounts collected pursuant to actions taken under subsections (a), Notwithstanding the above, the Authority and the Trustee shall undertake all diligent (b) and (c) of this Section 7.2 shall be applied in accordance with the provisions of the efforts to pursue the Municipality and cause it to pay all amounts due and owing to the Bond Resolution. If the Bond Resolution has been discharged and the County fully
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Authority and the County, as applicable, under this Lease prior or subsequent to an Section 7.5 No Remedy Exclusive. No remedy herein conferred upon Interest Payment Date and Principal Installment Date. or reserved to the Authority, the County or the Trustee is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be (b) The County shall take all actions necessary and permitted by law, cumulative and shall be in addition to every other remedy given under this Lease or now which actions may include ex parte actions, to make payment of an amount equal to the or hereafter existing at law or in equity or by statute. No delay or omission to exercise deficiency owed by any nonpaying Municipality, which amount, when added to available any right or power accruing upon any default shall impair any such right or power or amounts on deposit in such nonpaying Municipality's Municipal Account in the Debt shall be construed to be a waiver thereof, but any such right and power may be Service Fund, shall be sufficient to pay the principal of and interest on the Bonds due on exercised from time to time and as often as may be deemed expedient. In order to the next ensuing Interest Payment Date and Principal Installment Date, as applicable. entitle the Authority, the County or the Trustee to exercise any remedy reserved to it in this Article VII, it shall not be necessary to give any notice, other than such notice as (c) Any amounts so paid by the County to the Trustee to cure any may be herein expressly required. deficiency in the Debt Service Fund with respect to the nonpaying Municipality pursuant to the County Guarantee shall be reimbursed by the Municipality pursuant to the Section 7.6 No Additional Waiver Implied By One Waiver. In the provisions of the Ordinance authorizing the execution of this Lease and Section 3.4 event any agreement contained in this Lease should be breached by either party and hereof, including County Guarantee Costs. thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. (d) The Trustee shall promptly notify the Authority and the County of any delinquent Basic Rent payments received by the Trustee from the Municipality at any time after a Lease Payment Date, but prior to an Interest Payment Date and Principal Installment Date, as applicable, which notice shall be received by the Authority and the County not later than two (2) Business Days after receipt of any such payments.
(e) Notwithstanding the provisions of subsection (a) above, in the event the Municipality forwards a Basic Rent payment to the Trustee subsequent to an Interest Payment Date and Principal Installment Date, as applicable, but before the next succeeding Interest Payment Date and Principal Installment Date, as applicable, and to the extent the County has made a payment with respect thereto and has incurred County Guarantee Costs, then pursuant to Sections 508, 708 and 709 of the Bond Resolution, the County shall be entitled to receive such late Basic Rent payment immediately upon deposit of such moneys in the Municipal Account in the Debt Service Fund and the Trustee shall pay such late Basic Rent payment to the County free and clear of the lien and pledge of the Bond Resolution; provided, however, the County shall have the option of determining whether such late Basic Rent payment shall be applied to the payment of Basic Rent of the Municipality on the next succeeding Interest Payment Date and Principal Installment Date, as applicable. An Authorized County Representative shall direct the Trustee in writing as to the application of such late Lease Payment.
(f) If the Authority has received moneys from whatever source for an Item of Equipment pursuant to Section 7.2 hereof and (i) the County has incurred County Guarantee Costs pursuant to subsection 7.4(a) hereof, which payments have not been reimbursed by the Municipality, and (ii) there are moneys remaining and available in any Fund or Account under the Bond Resolution when all Lease Terms expire and the Series 2014 Bonds are no longer Outstanding, then, pursuant to Section 511 of the Bond Resolution, the Trustee shall pay over to the County all amounts due and owing to the County for County Guarantee Costs to the extent moneys are legally available therefor under the Bond Resolution.
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ARTICLE VIII Section 8.2 Option to Purchase Equipment. If the Municipality shall SALE, ASSIGNMENT, SUBLEASING AND SUBSTITUTION; CONVEYANCE OF have paid all amounts due and owing under this Lease including Additional Rent and EQUIPMENT TO MUNICIPALITY shall have cured any and all defaults under this Lease, the Municipality shall have and may exercise, at the time of the expiration of the Lease Term applicable to any Item of Section 8.1 Sale, Assignment, Subleasing or Substitution by Equipment, the option to purchase such Item of Equipment under the provisions of this Municipality. (a) Excepting any agreement between the County and the Authority for Section 8.2 upon payment to the Authority, net of any expenses of sale, of the purchase use of Equipment by the Authority which has been purchased on its behalf by the price therefor. The purchase price payable for each Item of Equipment shall be the sum County, neither this Lease nor the interest of the Municipality in any Item of Equipment of One Dollar ($1.00). The option shall have been deemed to have been exercised by may be sold, assigned or subleased by the Municipality. the Municipality if the Municipality shall include in its final Lease Payment the additional sum of $1.00 for each Item of Equipment. If the Municipality does not want to purchase (b) If the Municipality is unable to arrange for the delivery and the Item of Equipment it shall not include the $1.00 option payment in its final Lease acceptance of one or more Items of Equipment as contemplated in this Lease, the Payment. In such event and upon the surrender of possession of such Item of Municipality, with the prior written consent of the Authority (which consent shall not be Equipment to the Authority, the Authority may, or may direct the Municipality to, sell or unreasonably withheld), may elect to substitute one or more other items of equipment dispose of each such Item of Equipment not so purchased. The proceeds received by for such Items of Equipment, provided that the Cost thereof shall not exceed the the Authority or paid over to the Authority from the Municipality from such sale shall be aggregate of the estimated Cost of such Items of Equipment as set forth in Exhibit A or paid over to the Trustee and shall be deposited in the Municipal Account in the Exhibit G, as applicable hereto (unless the Municipality pays such extra moneys in Proceeds Fund and shall be applied by the Trustee in accordance with Section 507 of accordance with the provisions of Section 2.4(c) hereof) and provided the estimated the Bond Resolution. useful life of the equipment being substituted is equal to or greater than the estimated useful life of the Items of Equipment for which such substitution or addition is being Section 8.3 Date of Settlement. Within thirty (30) days after the made. The Municipality may arrange for the delivery and acceptance of one or more payment of the purchase price by the Municipality, the Authority shall additional Items of Equipment to the extent that the Cost of such Items of Equipment contemporaneously convey to the Municipality all of the Authority's right, title and acquired is less than estimated, upon the written approval of the Authority. In the event interest in and to such Item of Equipment by such legal instruments required therefor. of substitution or addition as provided herein, the Municipality and the Authority shall The Municipality shall bear all costs and expenses in connection with the preparation of execute appropriate amendments to the Exhibits hereto to reflect such substitution or the documents of conveyance and the delivery thereof and all fees, assessments, taxes addition. In addition, the Municipality shall cause a Substitution Certificate substantially and charges payable in connection with the conveyance of title to such Item of in the form set forth in Exhibit G hereto to be executed by an Authorized Municipal Equipment. Representative, and approved by an Authorized Authority Representative (which approval shall not be unreasonably withheld) and which shall be delivered and filed with the Authority and the Trustee, which certificate shall reflect the substitution of the Items of Equipment previously set forth in Exhibit A hereto.
(c) Notwithstanding the above, if the Municipality is not able to (i) deliver an Item of Equipment or make arrangements for its substitution or addition as provided herein and (ii) requisition moneys from the Municipal Account in the Acquisition and Improvement Fund for such Equipment within eighteen (18) months after the date of original issuance of the Series 2014 Bonds in accordance with the time periods and percentages specified in Section 2.3(a) hereof, the proceeds of the Series 2014 Bonds allocated to the Municipality shall be transferred into and applied by the Trustee in accordance with Sections 503(7) and 507(5) of the Bond Resolution. The Municipality shall continue to be liable hereunder for all Basic Rent payments necessary to amortize Debt Service on the Series 2014 Bonds (net of the amount of Series 2014 Bond proceeds allocated to such Municipality so applied) and Additional Rent, including the payment of all costs and expenses associated with the performance of an arbitrage rebate calculation or the payment of arbitrage rebate in accordance with Section 2.3 hereof which shall be paid as Additional Rent hereunder, which liability shall survive the expiration of the Lease Term and the final maturity of the Series 2014 Bonds.
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ARTICLE IX consented to by an Authorized Authority Representative and may be accomplished without the consent of the County and the Trustee, written or otherwise. No other MISCELLANEOUS amendment, change, modification, alteration or termination of this Lease shall be made other than pursuant to a written instrument signed by an Authorized Authority Section 9.1 Surrender of Possession. Except as otherwise expressly Representative and the Municipality and consented to in writing by the County and in provided in this Lease and except in the event of purchase of the Equipment by the accordance with the Bond Resolution and this Lease. Copies of any amendments to Municipality, at the expiration of the Lease Term, the Municipality agrees to surrender this Lease shall be filed with the County and the Trustee. possession of each Item of Equipment peacefully and promptly to the Authority in as good condition as at the commencement of the Lease Term, loss by fire or other For all purposes of this Section 9.4, the Trustee shall be entitled to rely casualty covered by insurance, condemnation and ordinary wear, tear and upon a Favorable Opinion of Bond Counsel, which Bond Counsel shall be satisfactory obsolescence only excepted. Notwithstanding the above, at the election of the to the Trustee, with respect to the extent, if any, as to which any action adversely affects Authority, the Authority shall either sell or dispose of such Item of Equipment or require the interests of the County or any holders of Series 2014 Bonds then Outstanding. the Municipality to do so. In any event, the Municipality shall pay the cost of selling or disposing of the same. Section 9.5 Amounts Remaining under Bond Resolution. Upon expiration of the Lease Term, it is agreed by the parties hereto that any amounts Section 9.2 Successors and Assigns. This Lease shall inure to the remaining in any Fund or Account created under the Bond Resolution, after payment in benefit of the Municipality, the Authority, the County, the Trustee and their respective full of the Series 2014 Bonds (or provision for payment thereof having been made in successors and assigns and shall be binding upon the Municipality and the Authority accordance with the provisions of the Bond Resolution) and the fees, charges and and their respective successors and assigns. expenses of the Fiduciaries, the County and the Authority in accordance with the Bond Resolution and this Lease, shall belong to and be paid to the Municipality pursuant to Section 9.3 Severability. In the event any provision of this Lease shall Section 511 of the Bond Resolution. Notwithstanding the above, if the Series 2014 be held invalid or unenforceable by any court of competent jurisdiction, such holding Bonds shall have been defeased in accordance with Section 1301 of the Bond shall not invalidate or render unenforceable any other provision hereof. Resolution, any moneys held by a Fiduciary in trust for the payment and discharge of any Bonds that remain unclaimed for five (5) years (or such other time period as may be Section 9.4 Amendments, Changes and Modifications. Except as set forth at N.J.S.A. 46:30B-37) shall be repaid by the Fiduciary to the State Treasurer otherwise provided in this Lease or in the Bond Resolution, subsequent to the issuance in accordance with the provisions of N.J.S.A. 46:30B-1 et seq., free and clear of the lien of the Series 2014 Bonds and prior to payment or provision for the payment of all Series created by the Bond Resolution. 2014 Bonds in full and any other obligations incurred by the Authority to pay the Cost of Equipment, including interest, premiums and other charges, if any, thereon, and Section 9.6 Counterparts. This Lease may be simultaneously executed payment or provision for the payment of Authority Administrative Expenses and County in several counterparts, each of which shall be an original and all of which shall Guarantee Costs, this Lease may not be amended, changed, modified, altered or constitute but one and the same instrument. terminated so as adversely to affect the interests of the holders of the Series 2014 Bonds without the prior written consent of the County and the holders of at least fifty- Section 9.7 Notices and Demands. All notices, demands or other one percent (51%) in aggregate principal amount of the Series 2014 Bonds then communications provided for in this Lease shall be in writing and shall be delivered Outstanding; provided, further, that no such amendment, change, modification, personally, by facsimile transmission (with written confirmation of receipt) in accordance alteration or termination will reduce the percentage of the aggregate principal amount of herewith and sent by certified or registered mail, personal delivery or recognized the Outstanding Series 2014 Bonds, the consent of the holders of which is required for overnight delivery to (i) the Municipality at «FIELD3», «FIELD4», New Jersey any such amendment, change, modification, alteration or termination or decrease the «FIELD5», Attn: «FIELD6», (ii) the Authority at 101 Interchange Plaza, Cranbury, New amount of any payment required to be made under this Lease or extend the time of Jersey 08512, Attn: Chairman, (iii) Bond Counsel to the Authority, Wilentz, Goldman & payment thereof. This Lease may be amended, changed, modified and altered without Spitzer, P.A., 90 Woodbridge Center Drive, P.O. Box 10, Woodbridge, New Jersey the consent of the holders of Series 2014 Bonds (but with the prior written consent of 07095-0958, Attention: Anthony J. Pannella, Esq., (iv) the Trustee at 1006 Astoria the County) to provide necessary changes only to cure any ambiguity, correct or Boulevard, Cherry Hill, New Jersey 08034, Attn: Institutional Trust Department/Kelly M. supplement any provision contained herein which may be defective or inconsistent with Bekas, (v) the County at the Middlesex County Administration Building, John F. any other provisions contained herein or to provide other changes which will not Kennedy Square, 75 Bayard Street, New Brunswick, New Jersey 08901, Attn: Clerk of adversely affect the interests of such holders. Notwithstanding the above, amendments Board of Chosen Freeholders and the Chief Financial Officer of the County and (vi) to this Lease to add, delete or substitute Equipment by the Municipality to effectuate Office of County Counsel, Middlesex County Administration Building, John F. Kennedy amendments to Exhibit A and Exhibit G to this Lease resulting therefrom, shall be Square, 75 Bayard Street, New Brunswick, New Jersey 08901, Attn: Thomas F. Kelso,
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Esq., or to such other representatives or addresses as the Authority, the Municipality, IN WITNESS WHEREOF, the Authority has caused this instrument to be the Trustee or the County may from time to time designate by written notice to the signed by its Chairman as its duly authorized officer and its official seal to be hereunto parties hereto or beneficiaries hereof. affixed and the Municipality has caused this instrument to be executed in its name by its Mayor and its official seal to be hereunto affixed, all as of the day and year first above Section 9.8 Headings. The Article and Section headings in this Lease written. are inserted for convenience of reference only and are not intended to define or limit the scope of any provision of this Lease. Witness as to the Middlesex MIDDLESEX COUNTY IMPROVEMENT County Improvement Authority AUTHORITY Section 9.9 Non-Waiver. It is understood and agreed that nothing contained in this Lease shall be construed as a waiver on the part of the parties, or any of them, of any right not explicitly waived in this Lease.
Section 9.10 Survival of Lease. Notwithstanding anything else to the JACQUE EAKER, LEONARD J. ROSEMAN, contrary herein, the provisions of Sections 2.3(a), (c) and (d), 3.2 and 5.3 shall survive Secretary/Treasurer Chairman the expiration of the Lease Term and the final maturity of the Series 2014 Bonds.
Section 9.11 Governing Law. This Lease shall be governed by and (SEAL) construed in accordance with the laws of the State of New Jersey. Witness as to the Municipality «FIELD1» OF «FIELD2»
(SEAL)
APPROVED AND ACCEPTED: COUNTY OF MIDDLESEX
RONALD G. RIOS, Director Board of Chosen Freeholders
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EXHIBIT A Municipality: ______Requisition Ref. No. 2014-____ 2014 CAPITAL EQUIPMENT AND IMPROVEMENT FINANCING PROGRAM EXHIBIT B DESCRIPTION OF LEASED EQUIPMENT AND ANNUAL LEASE PAYMENTS 2014 CAPITAL EQUIPMENT AND IMPROVEMENT FINANCING PROGRAM
ACCEPTANCE CERTIFICATE SEE ATTACHED SCHEDULE A
I, the undersigned ______[insert title], do hereby certify pursuant to the terms of the Lease and Agreement between the Middlesex County Improvement Authority (the "Authority") and the ______of ______, in the County of Middlesex (the "Municipality"), dated as of September 30, 2014 (the "Lease"), as follows:
1. The Municipality, on behalf of the Authority, has acquired the Item of Equipment described in Exhibit A to the Lease or Exhibit G, as applicable, the general description of which is: ______.
2. Attached hereto is all necessary legal documentation to evidence ownership of such Item of Equipment.
3. Such Item of Equipment meets the Municipality's specifications therefor, has been procured and delivered in compliance with the Local Public Contracts Law and all applicable laws of the State of New Jersey to the Municipality's satisfaction (or is in compliance with manufacturer's contract), and is in good repair and working order. This certificate constitutes the Acceptance Certificate for such Item of Equipment.
4. The amount of the purchase price for the Item of Equipment is $______. Such amount is authorized by the Lease to be withdrawn from the Municipal Account in the Acquisition and Improvement Fund and such amount is the correct amount as specified in the manufacturer's contract.
5. The undersigned is an Authorized Municipal Representative.
6. Terms defined in the Lease and used in this certificate have the same meanings in this certificate as are ascribed to such terms in the Lease.
AUTHORIZED MUNICIPAL REPRESENTATIVE
Name: Title: DATED:
A-1 B-1 #7577324.1(104875.111) #7577324.1(104875.111)
Municipality: ______Municipality: ______Requisition Ref. No. 2014-_____ Requisition Ref. No. 2014-_____ Partial Payment No.:______Partial Payment No.:______
EXHIBIT C Municipal Account in the Acquisition and Improvement Fund and such amount is the correct amount as specified in the manufacturer's contract. 2014 CAPITAL EQUIPMENT AND IMPROVEMENT FINANCING PROGRAM 7. The name and address of the person, firm or corporation to whom REQUISITION FOR ADVANCE/PARTIAL PAYMENTS payment is due is: ______REQUISITION REF. NO. 2014-_____ Partial Payment No. ______
I, the undersigned ______[insert title] of the 8. $______is the amount necessary to partially pay the ______(the "Municipality"), do hereby certify pursuant to the Cost of such Item of Equipment and is the amount to be paid to such person, terms of the Lease and Agreement between the Middlesex County Improvement corporation or firm. The amount which has been partially prepaid to date for the Item of Authority (the "Authority") and the ______of ______, in the County of Middlesex Equipment is $______and the amount remaining to be paid is (the "Municipality"), dated as of September 30, 2014 (the "Lease"), as follows: $______.
1. The Municipality, on behalf of the Authority, has executed a 9. In the event the Cost of such Item of Equipment exceeds the contract with a vendor to acquire the Item of Equipment described in Exhibit A or Exhibit amount specified in Exhibit A or Exhibit G, as applicable, to the Lease, the Municipality G, as applicable, to the Lease, the description of which is: ______shall also complete and deliver Exhibit H attached hereto. and is the Item of Equipment to which this partial Requisition relates is 10. The undersigned is an Authorized Municipal Representative. ______. Terms defined in the Lease and used in this certificate have the same (Include the description and invoice or billing reference) meanings in this certificate as are ascribed to such terms in the Lease.
AUTHORIZED MUNICIPAL REPRESENTATIVE
2. Attached hereto is all necessary documentation to evidence the necessity of making progress payments for such Item of Equipment pursuant to Section 2.5(h) of the Lease. Name: Title: 3. Attached hereto is the additional documentation required by DATED: Section 5.8 of the Lease. The undersigned, on behalf of the Middlesex County Improvement 4. Such Item of Equipment meets the Municipality's specifications Authority, hereby approves the above Requisition. therefor, has been procured in compliance with the Local Public Contracts Law and all applicable laws of the State of New Jersey. MIDDLESEX COUNTY IMPROVEMENT AUTHORITY 5. In the event the requisition being submitted by the Municipality is to request and authorize final payment for the Item of Equipment described in Paragraph 1 hereof, please attach a completed Acceptance Certificate (Exhibit B) evidencing acceptance of the same by the Municipality. Authorized Authority Representative Name: 6. The purchase price for the Item of Equipment is Title: $______. Such amount is authorized by the Lease to be withdrawn from the DATED:
C-1 C-2 #7577324.1(104875.111) #7577324.1(104875.111) Municipality: ______Requisition Ref. No. 2014-_____
EXHIBIT D
PRO RATA ALLOCATION OF EACH MUNICIPALITY EXHIBIT E
2014 CAPITAL EQUIPMENT AND IMPROVEMENT FINANCING PROGRAM INTENTIONALLY OMITTED SEE EXHIBIT A HERETO REQUISITION REF. NO. 2014-______
I, the undersigned ______[insert title] of the ______of ______, in the County of Middlesex (the "Municipality") DO HEREBY CERTIFY that I am an Authorized Municipal Representative duly designated by the Municipality to execute and deliver this certificate on behalf of the Municipality. I DO HEREBY FURTHER CERTIFY pursuant to and in accordance with the terms of the Lease and Agreement between the Middlesex County Improvement Authority (the "Authority") and the Municipality dated as of September 30, 2014 (the “Lease”) as follows:
1. This requisition is Requisition Ref. No. 2014-______.
2. The name and address of the person, firm or corporation to whom payment is due is: ______
3. The amount to be paid to such person, firm or corporation named in paragraph (2) above is $______.
4. The Item(s) of Equipment to which this Requisition relates is ______.
Include description and invoice or billing reference.
5. $______is the amount necessary to pay the Cost of such Item of Equipment.
6. Each obligation, item of cost or expense mentioned herein has been properly incurred, is an item of Cost and is a proper charge against the Municipal Account in the Acquisition and Improvement Fund and has not been the basis of any previous withdrawal.
D-1 E-1 #7577324.1(104875.111) #7577324.1(104875.111)
Municipality: ______Requisition Ref. No. 2014-_____
EXHIBIT F
Capitalized terms used herein and not otherwise defined shall have the CERTIFICATE AS TO AUTHORIZED meanings ascribed to such terms in the Lease. MUNICIPAL REPRESENTATIVE
DATED: AUTHORIZED MUNICIPAL REPRESENTATIVE I, ______, the duly elected/appointed and acting ______of the ______of ______, in the County of Middlesex (the
"Municipality"), a municipal corporation of the State of New Jersey, DO HEREBY Name: CERTIFY that I am duly authorized under the Lease (as hereinafter defined) to execute Title: and deliver this certificate on behalf of the Municipality. I DO HEREBY FURTHER
CERTIFY as follows: The undersigned, on behalf of the Middlesex County Improvement Authority, hereby approves the above Requisition. 1. ______is the ______of the Municipality. DATED: MIDDLESEX COUNTY IMPROVEMENT AUTHORITY 2. ______is the ______of the Municipality.
Authorized Authority Representative 3. The following individual(s) have each been designated as Name: Authorized Municipal Representatives in accordance with the provisions of the Lease Title: and each are duly qualified, empowered and authorized so to act on behalf of the
Municipality and to deliver documents on behalf of the Municipality.
Name Signature
Capitalized terms used herein and not otherwise defined shall have the same meanings ascribed thereto in the Lease and Agreement dated as of September 30, 2014 by and between the Middlesex County Improvement Authority and the Municipality and approved by the County of Middlesex (the "Lease").
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of ______, 2014.
______OF ______
Name: Title:
E-2 F-1 #7577324.1(104875.111) #7577324.1(104875.111) Municipality: ______Requisition Ref. No. 2014-_____
EXHIBIT G
2014 CAPITAL EQUIPMENT AND IMPROVEMENT FINANCING PROGRAM EXHIBIT H
CERTIFICATE FOR SUBSTITUTION OF EQUIPMENT 2014 CAPITAL EQUIPMENT AND IMPROVEMENT FINANCING PROGRAM
REQUISITION REF. NO. 2014-______The undersigned Authorized Municipal Representative of the ______of ______, in the County of Middlesex (the "Municipality") (insert name of (To Be Used In the Event the Cost of an Item municipality) hereby requests the substitution of certain Items of Equipment contained in of Equipment Exceeds the Amount listed in Exhibit A the Lease and Agreement executed by and between the Municipality and the Middlesex and/or Exhibit G to the Lease) County Improvement Authority and dated as of September 30, 2014 (the "Lease") and that upon the filing of this certificate with the Authority and the Trustee, Exhibit A to the I, the undersigned ______[insert title] of the ______of Lease shall be modified to reflect the changes in Items of Equipment being purchased ______, in the County of Middlesex (the "Municipality") DO HEREBY CERTIFY that by the Municipality as set forth below: I am an Authorized Municipal Representative duly designated by the Municipality to execute and deliver this certificate on behalf of the Municipality. I DO HEREBY 1. The Equipment originally listed in Exhibit A to the Lease is: FURTHER CERTIFY pursuant to and in accordance with the terms of the Lease and (identify each piece of equipment, its useful life and its cost as described in Exhibit A); Agreement between the Middlesex County Improvement Authority (the "Authority") and 2. The Equipment which is to be substituted and which is to be the Municipality dated as of September 30, 2014 (the "Lease") as follows: reflected in Exhibit A to the Lease is: (identify each item of equipment, its useful life and 1. This requisition is Requisition No. 2014-______. the cost of the equipment to be substituted) (make sure that each piece of equipment being substituted corresponds to the equipment originally listed on Exhibit A on a piece 2. The name and address of the person, firm or corporation to whom by piece basis). payment is due is:
IN WITNESS WHEREOF, I have hereunto set my hand on behalf of the
Municipality this ____ day of ______, 20__.
AUTHORIZED MUNICIPAL 3. The amount to be paid to such person, firm or corporation named in REPRESENTATIVE paragraph (2) above is $______.
4. The Item(s) of Equipment to which this Requisition relates is Name: ______. Title: Include description and invoice or billing reference
APPROVAL DATED:
MIDDLESEX COUNTY IMPROVEMENT AUTHORITY
5. $______is the amount necessary to pay the Cost of By: such Item of Equipment. Authorized Authority Representative Name: 6. $______is the amount stated as being required to pay Title: the Cost of such Item of Equipment as originally specified in Exhibit A or Exhibit G, as applicable, to the Lease.
G-1 H-1 #7577324.1(104875.111) #7577324.1(104875.111)
Municipality: ______Requisition Ref. No. 2014-_____
EXHIBIT I
7. $______is the amount of money as indicated by a copy The name/address/phone number of the Trustee is: of a check attached hereto, the Municipality has forwarded by check to the Trustee on behalf of the Authority for deposit in the Municipal Account in the Acquisition and TD Bank, National Association Improvement Fund to fund the balance of the Cost of the Equipment attach check for 1006 Astoria Boulevard Trustee, copy of the check for the Authority. Cherry Hill, New Jersey 08034 Attention: Institutional Trust Department/Kelly M. Bekas 8. Each obligation, item of cost or expense mentioned in Paragraph 5 hereof has been properly incurred, is an item of Cost and is a proper charge against the Phone number (856) 685-5144 Municipal Account in the Acquisition and Improvement Fund and has not been the basis Fax number (856) 685-5267 of any previous withdrawal. Email: [email protected]
Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Lease. Fed-Wire Instructions:
DATED: AUTHORIZED MUNICIPAL REPRESENTATIVE TD Bank, National Association ABA Number ______Trustee Clearing Account Number: ______Reference: MCIA 2014 - («FIELD1» OF «FIELD2») Name: Attention: Kelly M. Bekas Title:
The undersigned, on behalf of the Middlesex County Improvement Authority, hereby approves the above Requisition.
DATED: MIDDLESEX COUNTY IMPROVEMENT AUTHORITY
Authorized Authority Representative Name: Title:
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APPENDIX G
FORM OF CONTINUING DISCLOSURE AGREEMENT
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FORM OF CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement dated as of September 30, 2014 (the "Disclosure Agreement") is executed by and among the County of Middlesex, State of New Jersey (the “County”), the Middlesex County Improvement Authority (the "Authority" or the "Issuer") and TD Bank, National Association, Cherry Hill, New Jersey, as Dissemination Agent, as Trustee under the Bond Resolution (the "Dissemination Agent"), in connection with the issuance of $17,275,000 aggregate principal amount of the Authority’s County-Guaranteed Capital Equipment and Improvement Revenue Bonds, Series 2014 (the "Bonds"). The Bonds are being issued pursuant to a resolution entitled, "Resolution of the Middlesex County Improvement Authority Authorizing the Issuance of County-Guaranteed Capital Equipment and Improvement Revenue Bonds" (the "Bond Resolution"), duly adopted and approved by the Authority on August 13, 2014. The proceeds of the Bonds are being used to undertake various Improvements and to acquire certain Items of Capital Equipment for various municipalities, including the County, pursuant to Loan and Security Agreements, each dated as of September 30, 2014, by and between the Authority and each applicable municipality (each, a “Loan Agreement”) and/or Lease and Agreements, each dated as of September 30, 2014, between the Authority and each applicable municipality (each, a "Lease Agreement"). Pursuant to Section 821 of the Bond Resolution, Section 5.12 of the Loan Agreement and Section 5.15 of the Lease Agreement, the County, the Dissemination Agent and the Authority covenant and agree as follows:
SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the County (as defined herein), the Dissemination Agent and the Authority for the benefit of the Beneficial Owners of the Bonds to assist the Underwriter (as defined herein) in complying with the Rule (as defined below). The County acknowledges that it is an "Obligated Person" under the Rule (as defined below) and that, except as specifically set forth herein, the Authority and the Dissemination Agent have undertaken no responsibility with respect to any reports, notices or disclosures provided or required under this Disclosure Agreement, and has no liability to any person, including any Beneficial Owner of the Bonds, with respect to any such reports, notices or disclosures or the Rule.
SECTION 2. Definitions. In addition to the definitions set forth in the Bond Resolution, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the County pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement.
"Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of any Bonds (including persons holding Bonds through nominees, depositories or other
G-1 #7687590.1(104875.111) intermediaries), or (b) is treated as the owner of any Bonds for Federal income tax purposes.
"County Disclosure Representative" shall mean the Chief Financial Officer of the County or its designee, or such other person as the County shall designate in writing to the Authority and the Dissemination Agent from time to time for the purposes of this Disclosure Agreement.
"Dissemination Agent" shall mean TD Bank, National Association, Cherry Hill, New Jersey, as Trustee under the Bond Resolution, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the Authority and which has filed with the Authority a written acceptance of such designation.
“EMMA” shall mean the Electronic Municipal Market Access system, a website created by the MSRB and approved by the SEC to provide a central location where investors can obtain municipal bond information including disclosure documents. The Authority, the County or the Dissemination Agent shall submit disclosure documents to EMMA as a PDF file to www.emma.msrb.org.
"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Agreement.
"MSRB" shall mean the Municipal Securities Rulemaking Board.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as the same may be amended from time to time.
“SEC” shall mean the United States Securities and Exchange Commission.
“State” shall mean the State of New Jersey and its successors and/or assigns to its duties and functions.
"Underwriter(s)" shall mean the original underwriter(s) of the Bonds required to comply with the Rule in connection with offering of the Bonds.
SECTION 3. Provision of Annual Reports.
(a) (i) The County (which has a fiscal year commencing January 1 and ending December 31 shall provide or cause to be provided to the Dissemination Agent not later than August 1 of each year, commencing August 1, 2015 (for the fiscal year ending December 31, 2014), an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. Each Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Agreement; provided, that the audited financial statements of the County may be
G-2 #7687590.1(104875.111) submitted separately from the balance of the Annual Report; and provided, further, that if the audited financial statements of the County are not available by August 1, the County shall include unaudited financial statements with its Annual Report and when such audited financial statements become available to the County, the same shall be submitted to the Dissemination Agent no later than thirty (30) days after the receipt of the same by the County. In such instance, the Dissemination Agent shall then forward such audited financial statements to EMMA as expeditiously as possible, but in no event later than five (5) Business Days after receipt thereof;
(ii) If by August 15 for the County (commencing August 15, 2015), the Dissemination Agent has not received a copy of the Annual Report from the County, the Dissemination Agent shall contact the County in writing regarding the forwarding of the same. The Authority shall receive a copy of this notice.
(iii) Not later than August 31 of each year for the County (commencing August 31, 2015), the Dissemination Agent shall forward to EMMA a copy of the Annual Report received by the Dissemination Agent pursuant to subsection (a)(i) hereof.
(iv) Whether or not the notice in Section 5(d) hereof is given, if the County does not provide an Annual Report by the applicable date required in subsection (a)(ii) above such that the Dissemination Agent cannot forward the Annual Report to EMMA in accordance with subsection (a)(iii) above, the Dissemination Agent shall send a notice of such event to EMMA in substantially the form attached hereto as Exhibit A, with copies to the County, the Authority and the Trustee (if the Dissemination Agent is not the Trustee).
(b) The Dissemination Agent shall file a report each year with the County, the Authority and (if the Dissemination Agent is not the Trustee) the Trustee, certifying that the Annual Report has been filed with EMMA pursuant to this Disclosure Agreement, stating the date it was provided.
(c) If the fiscal year of the County changes, the County shall give written notice of such change in the manner provided in Section 5 hereof.
SECTION 4. Content of Annual Reports. (a) The County’s Annual Report shall contain or incorporate by reference the following:
1. The audited financial statements of the County. The audited financial statements are to be prepared in accordance with generally accepted auditing standards and audit requirements prescribed by the Division of Local Government Services, New Jersey Department of Community Affairs (the "Division") which audit requirements demonstrate compliance with the modified accrual basis of accounting, with certain exceptions, and the budget laws of the State of New Jersey, which is a comprehensive basis of accounting other than generally accepted accounting principles (“GAAP”).
2. The most current annual debt statement of the County; and
G-3 #7687590.1(104875.111) 3. As to the County, the general financial information and operating data of the County set forth in the Official Statement dated September 16, 2014 prepared in connection with the sale of the Bonds (the "Official Statement") and contained in Appendix A of the Official Statement relevant to the County under the headings "Twenty Principal Taxpayers in Middlesex County, New Jersey”, “Major Employers Located in Middlesex County, New Jersey”, “Middlesex County, New Jersey Statutory Debt as of December 31, 2013 (Unaudited)”, “Middlesex County, New Jersey Statutory Debt Limit as of December 31, 2013 (Unaudited)”, “Middlesex County, New Jersey County-Guaranteed Bonds Issued By MCIA as of December 31, 2013 (Unaudited)”, “Middlesex County, New Jersey Other County Lease/Loan Obligations as of December 31, 2013 (Unaudited)”, “Middlesex County Subsequent Events”, “Middlesex County, New Jersey History of Debt Ratios (Unaudited)”, “Middlesex County, New Jersey Schedule of Gross Debt Service on Outstanding Bonds as of May 31, 2014 (Unaudited)”, “Middlesex County, New Jersey Schedule of Net Debt Service on Outstanding Bonds as of May 31, 2014 (Unaudited)”, “Middlesex County Assessed and Equalized Valuations and Equalized Tax Rate”, “Middlesex County, New Jersey Assessed Valuation County-Wide by Property Classification (in dollars)”, “Middlesex County, New Jersey Debt Analysis December 31, 2013 (Unaudited)”, “Statement of Overlapping Debt”, “Summary of 2013 and 2014 Budgets”, “Middlesex County, New Jersey Comparative Statement of Current Fund Operations and Change in Current Fund Balance”, “Middlesex County, New Jersey 2013 Capital Budget (Improvements and Equipment)” and in the forepart thereof under the heading "Litigation – The County".
Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issue with respect to which the County is an "obligated person" (as defined by the Rule), which have been filed with EMMA or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The County shall clearly identify each such other document so incorporated by reference.
SECTION 5. Reporting of Significant Events.
(a) This Section 5 shall govern the giving of notices of the occurrence of any of the following events with respect to the Bonds, as applicable:
1. Principal and interest payment delinquencies;
2. Nonpayment related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
G-4 #7687590.1(104875.111) 5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds;
7. Modifications to rights of Bond holders, if material;
8. Bond or Certificate calls, if material, and tender offers;
9. Defeasances of the Bonds;
10. The release, substitution or sale of property securing repayment of the Bonds, if material; 11 Rating changes relating to the Bonds;
12. Bankruptcy, insolvency, receivership or similar event of the Authority or County;
13. The consummation of a merger, consolidation, or acquisition involving the Authority, or the County or the sale of all or substantially all of the assets of the Authority or the County, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and
14. Appointment of a successor or additional agent for the Bonds or the change of name of an agent for the Bonds, if material.
The Authority, the County or the Dissemination Agent, where the Dissemination Agent is also the Trustee, shall, in a timely manner not in excess of ten (10) business days after the occurrence of any Listed Event, file a notice of the occurrence of such Listed Event with the MSRB, through the EMMA system, in accordance with the provisions of Section 5 of this Disclosure Agreement. In determining the materiality for the Listed Events specified in subsection (a) of this section 5 that require a materiality
G-5 #7687590.1(104875.111) determination, the Authority or the County may, but shall not be required to, rely conclusively on an opinion of counsel.
(b) Whenever the Authority or the County have or obtain knowledge of the occurrence of any of the Listed Events that require a materiality determination, the Authority or the County shall, as soon as possible, determine if such event would constitute information material, if applicable, to the Bondholders.
(c) If the Authority or the County (i) have or obtain knowledge of the occurrence of any of the Listed Events not requiring a materiality determination, or (ii) determine that the occurrence of a Listed Event requiring a materiality determination would be material to the Bondholders, the Authority or the County shall promptly notify the Dissemination Agent in writing (if the Authority or the County is not the Dissemination Agent) and the Authority or the County shall instruct the Dissemination Agent to report such Listed Event and the Dissemination Agent shall report the occurrence of such Listed Event pursuant to subsection (e) hereof.
(d) If the Authority or the County determines that the occurrence of a Listed Event requiring a materiality determination would not be material to the Bondholders, the Authority or the County shall promptly notify the Dissemination Agent in writing (if the Dissemination Agent is not the Authority or the County) and the Dissemination Agent (if the Dissemination Agent is not the Authority or the County) shall be instructed by the Authority or the County not to report the occurrence.
(e) If the Dissemination Agent has been instructed in writing by the Authority or the County to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the MSRB, through the EMMA system, in a timely manner not in excess of ten (10) business days after the occurrence thereof, with a copy to the Authority or the County (if the Dissemination Agent is not the Authority or the County). Notwithstanding the foregoing, notice of the Listed Events described in subsections (a)(8) and (9) hereof need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to the Bondholders of the affected Bonds pursuant to the Agent Agreement.
(f) The Authority shall provide the Trustee and the Dissemination Agent (if not the Trustee) with written notice of the failure of the County to comply with any provision of this Disclosure Agreement.
SECTION 6. Termination of Reporting Obligation. The County’s obligations under this Disclosure Agreement shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds or when the County is no longer an "Obligated Person" (as defined in the Rule). The County shall file a notice of the termination of its reporting obligations pursuant to the provisions hereof with the Authority, the County, the Dissemination Agent and the Trustee (if the Trustee is not the Dissemination Agent), which notice shall be filed with EMMA in accordance with Section 5 hereof.
G-6 #7687590.1(104875.111) SECTION 7. Compliance with the Rule. Except as noted below, as of the date hereof, the County has made the filings required to comply with all previous undertakings under the Rule. While the County has filed its financial information in each of the past five (5) years as required by the Rule, that information was not always filed on a timely basis and was not filed for every one of the County’s obligations through the Authority. Additionally, the County inadvertently filed its 2010 and 2011 Annual Reports with the Nationally Recognized Municipal Securities Information Repositories designated under its prior undertakings and failed to file such Annual Reports with EMMA, a website created by the MSRB that has been approved by the SEC. The County has taken steps to ensure timely Annual Report filings on a going-forward basis. As of the date hereof, the County’s 2010 and 2011 Annual Reports have been filed with EMMA and the County is now in compliance with all existing continuing disclosure agreements in all material respects. This covenant is being made by the County to assist the purchaser of the Bonds in complying with the Rule.
SECTION 8. Dissemination Agent; Compensation. The Authority may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Agent, with or without appointing a successor dissemination agent. The Authority hereby appoints TD Bank, National Association, Cherry Hill, New Jersey, as the initial Dissemination Agent. The Authority shall compensate the Dissemination Agent for the performance of its obligations hereunder in accordance with an agreed upon fee structure in writing. The Dissemination Agent may resign its duties under this Disclosure Agreement upon sixty (60) days’ prior written notice to the Trustee, the Authority and the County.
SECTION 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the County, the Dissemination Agent and the Authority may amend this Disclosure Agreement and any provision of this Disclosure Agreement may be waived, if such amendment or waiver (supported by an opinion of counsel expert in Federal securities laws acceptable to the County and the Authority to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof) is (a) made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of the Obligated Person, or type of business conducted; (b) the undertaking, as amended or waived, would have complied with the requirements of the Rule at the time of the primary offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the amendment or waiver does not materially impair the interests of holders, as determined either by parties unaffiliated with the Authority or "Obligated Person," or by approving vote of the Beneficial Owners of the Bonds pursuant to the terms of the Bond Resolution at the time of the amendment (supported by an opinion of counsel expert in Federal securities laws acceptable to both the County and the Authority to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof). The Authority shall give notice of such amendment or waiver to this Disclosure Agreement to the Dissemination Agent, which notice shall be filed in accordance with the provisions of
G-7 #7687590.1(104875.111) Section 5 hereof. Notwithstanding the above, the addition of or a change in the Dissemination Agent shall not be construed to be an amendment under the provisions hereof.
In the event of any amendment or waiver of a provision of this Disclosure Agreement, the County shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the County. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements (i) notice of such change shall be given in the same manner as a Listed Event under Section 5 hereof, and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.
SECTION 10. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the County from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the County chooses to include any information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is specifically required by this Disclosure Agreement, the County shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
SECTION 11. Default. In the event of a failure of the County to comply with any provision of this Disclosure Agreement, the Trustee or the Dissemination Agent (if also the Trustee) may, upon receipt of Notice in the form attached hereto as Exhibit A hereto or upon notification of the same by the Authority or the Dissemination Agent (and, at the request of the Holders of at least 25% aggregate principal amount of Outstanding Bonds, and provision of satisfactory indemnification in accordance with Section 1003 of the Bond Resolution, shall), or any Beneficial Owner of the Bonds may, take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the County, the Authority and the Dissemination Agent, as the case may be, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Bond Resolution, the Loan Agreement or the Lease Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the County or the Authority to comply with this Disclosure Agreement shall be an action to compel performance.
SECTION 12. Duties, Immunities and Liabilities of the Dissemination Agent and the Authority. The Dissemination Agent and the Authority shall have only such duties as are specifically set forth in this Disclosure Agreement, and, to the extent
G-8 #7687590.1(104875.111) permitted by law, the County agrees to indemnify and hold the Dissemination Agent and the Authority and their respective officers, directors, employees and agents, harmless against any loss, expense and liability which they may incur arising out of or in the exercise or performance of their powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's and the Authority's negligence or willful misconduct. To the extent permitted by law, the County further releases the Dissemination Agent and the Authority from any liability for the disclosure of any information required by the Rule and this Disclosure Agreement. The obligations of the County under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.
SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Authority, the County, the Dissemination Agent, the Underwriter(s), and the Beneficial Owners of the Bonds, including Bondholders, and shall create no rights in any other person or entity.
SECTION 14. Notices. All notices and submissions required hereunder shall be given to the following, or their successors, by facsimile transmission (with written confirmation of receipt), followed by hard copy sent by certified or registered mail, personal delivery or recognized overnight delivery:
(a) To the Authority: Mr. Leonard J. Roseman, Chairman Middlesex County Improvement Authority 101 Interchange Plaza Cranbury, New Jersey 08512
(b) To the Authority's Counsel: Venezia & Nolan, P.C. 306 Main Street P.O. Box 399 Woodbridge, New Jersey 07095-0399 Attention: Daria Anne Venezia, Esq.
Wilentz, Goldman & Spitzer, P.A. 90 Woodbridge Center Drive Woodbridge, New Jersey 07095-0958 Attention: Anthony J. Pannella, Esq.
(c) To the Dissemination Agent from time to time with respect to the Bonds:
TD Bank, National Association 1006 Astoria Boulevard Cherry Hill, New Jersey 08034 Attention: Institutional Trust Department/Kelly M. Bekas
G-9 #7687590.1(104875.111) (d) To the County: Mr. Giuseppe Pruiti County Comptroller & Chief Financial Officer County of Middlesex Administration Building John F. Kennedy Square 75 Bayard Street New Brunswick, New Jersey 08901
(e) To County Thomas F. Kelso, Esq. Counsel: County Counsel Office of County Counsel County of Middlesex Administration Building John F. Kennedy Square 75 Bayard Street New Brunswick, New Jersey 08901
Each party shall give notice from time to time to the other parties, in the manner specified herein, of any change of the identity or address of anyone listed herein.
SECTION 15. Counterparts. This Disclosure Agreement may be executed in any number of counterparts which shall be executed by an Authorized Authority Representative, an Authorized County Representative and by an authorized signatory of the Dissemination Agent, as applicable, and all of which together shall be regarded for all purposes as one original and shall constitute and be but one and the same.
SECTION 16. Severability. If any one or more of the covenants or agreements in this Disclosure Agreement to be performed on the part of the Authority, the County and the Dissemination Agent should be contrary to law, then such covenant or covenants, agreement or agreements, shall be deemed severable from the remaining covenants and agreements and shall in no way affect the validity of the other provisions of this Disclosure Agreement.
G-10 #7687590.1(104875.111) SECTION 17. Governing Law. This Disclosure Agreement shall be construed in accordance with and governed by the Laws of the United States of America and the State of New Jersey.
COUNTY OF MIDDLESEX
By:______RONALD G. RIOS, Director of the Board of Chosen Freeholders
MIDDLESEX COUNTY IMPROVEMENT AUTHORITY
By:______LEONARD J. ROSEMAN, Chairman
TD BANK, NATIONAL ASSOCIATION, as Dissemination Agent
By:______KELLY M. BEKAS, Trust Officer
G-11 #7687590.1(104875.111) EXHIBIT A
NOTICE TO MSRB VIA EMMA OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Middlesex County Improvement Authority
Name of Bond Issue: County-Guaranteed Capital Equipment and Improvement Revenue Bonds, Series 2014 Dated September 30, 2014 (CUSIP Number: 596566XD6)
Name of “Obligated Person”: County of Middlesex
Date of Issuance: September 30, 2014
NOTICE IS HEREBY GIVEN that the above designated County of Middlesex has not provided an Annual Report with respect to the above-named Bonds as required by Section 821 of the Bond Resolution, by Section 5.12 of the Loan Agreement dated as of September 30, 2014 by and between the Authority and the County of Middlesex, by Section 5.15 of the Lease Agreement dated as of September 30, 2014 by and between the Authority and the County, and by the Continuing Disclosure Agreement dated as of September 30, 2014 by and among the Authority, the County, the Borough and the Dissemination Agent.
DATED: ______
DISSEMINATION AGENT (on behalf of the County, the Borough and the Authority)
cc: the County the Authority the Trustee
G-12 #7687590.1(104875.111)
APPENDIX H
IMPROVEMENTS OR ITEMS OF EQUIPMENT TO BE FINANCED WITH THE BONDS
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Middlesex County Improvement Authority 2014 Capital Equipment and Improvement Financing Program Project List Carteret Borough
Project Quant. Est. Cost Useful Life
FIVE YEAR PROJECTS Loan Street Sweeper 1 $190,000.00 5 Years SUV/Truck 1 $35,000.00 5 Years Subtotal $225,000.00
Lease Police Vehicles 3 $105,000.00 5 Years Subtotal $105,000.00
Five Year Projects Subtotal: $330,000.00
Loan Total: $225,000.00 Lease Total: $105,000.00 Total Borrowing: $330,000.00
H-1 Middlesex County Improvement Authority 2014 Capital Equipment and Improvement Financing Program Project List Highland Park Borough
Project Quant. Est. Cost Useful Life
FIVE YEAR PROJECTS Loan Holland Skid Steer Loader 1 $34,000.00 5 Years Holland Backhoe 1 $78,500.00 5 Years Brine Manufacturing System 1 $30,000.00 5 Years 325 Gallon De-icing Tanks 2 $10,000.00 5 Years Subtotal $152,500.00
Lease Ford Taurus Police Cars 2 $50,000.00 5 Years F450 Mason Dumptruck with Plow 1 $42,500.00 5 Years F250 4x4 Pick-up with Plow 1 $31,500.00 5 Years Subtotal $124,000.00
Five Year Projects Subtotal: $276,500.00
Loan Total: $152,500.00 Lease Total: $124,000.00 Total Borrowing: $276,500.00
H-2 Middlesex County Improvement Authority 2014 Capital Equipment and Improvement Financing Program Project List Middlesex Borough Project Quant. Est. Cost Useful Life
FIVE YEAR PROJECTS Loan Walk Behind Mowers 2 $12,000.00 5 Years Seeder 1 $11,000.00 5 Years Double Trailer-Mowers 1 $6,000.00 5 Years Trailer for New Field Machine 1 $5,000.00 5 Years New Snow Blowers 1 $1,500.00 5 Years Mason Dump Truck 1 $47,000.00 5 Years Salt Spreader 1 $8,000.00 5 Years Brine Making System 1 $29,000.00 5 Years Generator for Small Pump Stations 1 $75,000.00 5 Years Sanitation Truck Lease Program 1 $64,500.00 5 Years Police Handguns & Holsters Replacement 1 $20,000.00 5 Years Police Shotguns 1 $9,500.00 5 Years Police CAD/RMS Systems 1 $178,500.00 5 Years Fire Turnout Gear 1 $42,000.00 5 Years Fire Power Breezer Cooling Fan Rehab 1 $4,190.00 5 Years Computer Data Services - Camera System 1 $95,000.00 5 Years Administration - Stream Cleaning 1 $25,000.00 5 Years Library - HVAC System Replacement 1 $100,000.00 5 Years Rescue Squad A/C Unit 1 $30,135.00 5 Years Subtotal $763,325.00
Lease Pick-up Truck Replacement for OEM 1 $80,000.00 5 Years Senior Service Bus Purchase 1 $45,000.00 5 Years Subtotal $125,000.00
Five Year Projects Subtotal: $888,325.00
Loan Total: $763,325.00 Lease Total: $125,000.00 Total Borrowing: $888,325.00
H-3 Middlesex County Improvement Authority 2014 Capital Equipment and Improvement Financing Program Project List Middlesex County
Project Quant. Est. Cost Useful Life
FIVE YEAR PROJECTS Loan Adult Corrections Electronic Medical Records 1 $55,000.00 5 Years Buildings & Grounds FA - Office Furniture 1 $6,000.00 5 Years Buildings & Grounds Finance - Furniture 1 $15,000.00 5 Years Buildings & Grounds GJOSC For Mental Health Office & 1 $25,500.00 5 Years Buildings & Grounds HB - Furniture 1 $5,000.00 5 Years Buildings & Grounds PB - Furniture 1 $3,000.00 5 Years Buildings & Grounds PH - Office Furniture 1 $8,000.00 5 Years Buildings & Grounds PO - Conference Table 1 $1,000.00 5 Years Buildings & Grounds TN - Furniture 1 $6,000.00 5 Years Buildings & Grounds ES - Building & Lighting for Parking 1 $40,000.00 5 Years Buildings & Grounds FA - Amphitheater Lighting Replace 1 $18,000.00 5 Years Central Veh. Maint & Repair Shop Equipment 1 $30,000.00 5 Years Cultural & Heritage River Road Signage 1 $7,500.00 5 Years Emergency Management MCFA Generator Upgrade 1 $800,000.00 5 Years Emergency Management Radio Upgrades 1 $250,000.00 5 Years Emergency Management SOU Electronic & Satellite Upg 1 $70,000.00 5 Years Emergency Management Weather Station and Lightning 1 $40,000.00 5 Years Environmental Health Corrosive Cabinet for Sample Bottl 1 $700.00 5 Years Extension Service Agricultural Equipment 1 $50,000.00 5 Years Extension Service Fencing, Irrigation & Pesticides 1 $10,000.00 5 Years Finance Modernization of Finance Department 1 $25,000.00 5 Years Fire Academy 700/800 MHz Radio System 1 $6,178,003.81 5 Years Fire Academy Fire Academy Kitchen Appliances 1 $80,000.00 5 Years Fire Academy Fire Extinguisher Training Prop 1 $16,500.00 5 Years Fire Academy Firefighting Hose/Nozzles 1 $35,000.00 5 Years Fire Academy SCBA Maze-Breathing Tanks 1 $110,000.00 5 Years Fire Academy Turnout Gear 1 $95,000.00 5 Years GJOSC for Mental Health Audio Conference Equipment 1 $2,500.00 5 Years GJOSC for Mental Health Industrial Shelving 1 $6,000.00 5 Years GJOSC for Mental Health Security Cameras 1 $5,000.00 5 Years Human Resources Office Equipment 1 $2,500.00 5 Years Information Technology CV - Computer Replacements 1 $5,000.00 5 Years Information Technology EH - Computer Equipment 1 $7,900.00 5 Years Information Technology EM - Required EOC Software 1 $140,000.00 5 Years Information Technology ES - Computers 1 $6,000.00 5 Years Information Technology FA - Computers 1 $50,000.00 5 Years Information Technology GJOSC For Mental Health - Com 1 $15,000.00 5 Years Information Technology HB - Computers 1 $10,000.00 5 Years Information Technology IT 1 $3,140,000.00 5 Years Information Technology PB - Computer & Related Items 1 $13,250.00 5 Years Information Technology PH - Computer & Related Items 1 $133,000.00 5 Years Information Technology PO - PC & Related Items 1 $73,850.00 5 Years Information Technology TN - Computers 1 $12,000.00 5 Years Information Technology WM / CA - Computer Equipment 1 $3,000.00 5 Years Parks Department Maintenance Equipment 1 $1,000,000.00 5 Years Prosecutor's Office 6 Colt Riffles 1 $16,000.00 5 Years Prosecutor's Office Battleware Viper Ballistic Helmets 1 $8,400.00 5 Years Prosecutor's Office Cellebrite UFED Touch Ultimate 1 $10,500.00 5 Years Prosecutor's Office Ciper Locks 1 $3,000.00 5 Years Prosecutor's Office Cooling Units for 3 Rooms 1 $30,000.00 5 Years Prosecutor's Office Cubicles w/ Electric & Data for New T 1 $100,000.00 5 Years Prosecutor's Office Info share Module 1 $130,000.00 5 Years Prosecutor's Office Nikon & Pole Cameras 1 $45,800.00 5 Years Prosecutor's Office Paraclete Ballistic Vests 1 $12,500.00 5 Years Prosecutor's Office Security Enhancements to PSB Rece 1 $30,000.00 5 Years Sheriff's Office Security Upgrades 1 $200,000.00 5 Years Sheriff's Office X-Ray Machines 1 $40,000.00 5 Years Youth Services Security System Technology Upgrades 1 $20,000.00 5 Years MCIA Computer Equipment 1 $250,000.00 5 Years Subtotal $13,501,403.81
H-4 Middlesex County Improvement Authority 2014 Capital Equipment and Improvement Financing Program Project List Middlesex County
Lease Transportation Countywide Vehicles 1 $460,700.00 5 Years Transportation Central Vehicle 1 $493,000.00 5 Years Transportation Emergency Management 1 $80,000.00 5 Years Transportation Fire Academy 1 $50,000.00 5 Years Transportation Medical Examiner 1 $17,093.00 5 Years Transportation Public Health 1 $105,000.00 5 Years Transportation Sheriff's Office 1 $160,000.00 5 Years Subtotal $1,365,793.00
Five Year Projects Subtotal: $14,617,196.81
Loan Total: $13,501,403.81 Lease Total: $1,365,793.00 Total Borrowing: $14,867,196.81
H-5 Middlesex County Improvement Authority 2014 Capital Equipment and Improvement Financing Program Project List Monroe Township
Project Quant. Est. Cost Useful Life
FIVE YEAR PROJECTS Loan DPW Dump Trucks with Plows 2 $320,000.00 5 Years Parks Mower/Tractor 1 $45,000.00 5 Years Police Mobile Vision Upgrade 1 $13,600.00 5 Years Police Shotgun Flashlights 33 $8,000.00 5 Years Police Rifles 8 $9,500.00 5 Years Computer Equipment 1 $28,000.00 5 Years Police SUV 4x4 2 $87,000.00 5 Years Construction SUV 4x4 2 $60,000.00 5 Years Ambulance 1 $225,000.00 5 Years Recreation SUV 4x4 1 $27,000.00 5 Years Subtotal $823,100.00
Lease Patrol Cars 2 $75,200.00 5 Years Subtotal $75,200.00
Five Year Projects Subtotal: $898,300.00
Loan Total: $823,100.00 Lease Total: $75,200.00 Total Borrowing: $898,300.00
H-6 Middlesex County Improvement Authority 2014 Capital Equipment and Improvement Financing Program Project List Old Bridge Township
Project Quant. Est. Cost Useful Life
FIVE YEAR PROJECTS Loan None 0 $0.00 5 Years Subtotal $0.00
Lease Ambulances 2 $300,000.00 5 Years Subtotal $300,000.00
Five Year Projects Subtotal: $300,000.00
Loan Total: $0.00 Lease Total: $300,000.00 Total Borrowing: $300,000.00
H-7 Middlesex County Improvement Authority 2014 Capital Equipment and Improvement Financing Program Project List South Amboy City
Project Quant. Est. Cost Useful Life
FIVE YEAR PROJECTS Loan Rolloff Refuse Containers 2 $10,000.00 5 Years Mason Dumptruck Body 1 $8,000.00 5 Years 2014 Mason Dump Truck (4 wheel drive, lettering, plow, 2 1 $70,000.00 5 Years Codification of City Ordinances 1 $25,000.00 5 Years Subtotal $113,000.00
Lease 2013 Chevrolet Caprice Patrol Vehicles 2 $79,538.06 5 Years 2013 Chevrolet Caprice Patrol Vehicle 1 $35,784.46 5 Years Subtotal $115,322.52
Five Year Projects Subtotal: $228,322.52
Loan Total: $113,000.00 Lease Total: $115,322.52 Total Borrowing: $228,322.52
H-8 Middlesex County Improvement Authority 2014 Capital Equipment and Improvement Financing Program Project List Spotswood Borough
Project Quant. Est. Cost Useful Life
FIVE YEAR PROJECTS Loan None 0 $0.00 5 Years Subtotal $0.00
Lease Chevrolet Caprice Patrol Vehicles 2 $55,000.00 5 Years Subtotal $55,000.00
Five Year Projects Subtotal: $55,000.00
Loan Total: $0.00 Lease Total: $55,000.00 Total Borrowing: $55,000.00
H-9
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