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01/08/2008 Regular City Council Meeting(Th CITY OF MONROE REGULAR CITY COUNCIL MEETING 300 W. CROWELL STREET, MONROE, NC 28112 JANUARY 8, 2008 — 6:30 P.M. AGENDA www.monroenc.org 1. Police Department Recognitions A. B. C. D. E. F. G. H. I. J. K. Officer Adam Lewis Craig Captain Joseph Bryan Gilliard Captain David Samuel Williams Lieutenant Donald Heath Donahue Lieutenant Bobby Allen Manus Sergeant Robert Bruce Bartlett Sergeant William Everette Bolen Sergeant James Michael Fain Sergeant Watinia Jan Goforth Sergeant Gail Callahan Hicks Sergeant Joseph Albert Plyler 2. City Manager Comments A. Natural Gas B. Water Supply Update C. Pigs in the Park Barbeque D. Leaf Collection E. Old Quarry off Sutherland Avenue CONSENT AGENDA The City Council uses a Consent Agenda to consider items that are non- controversial and routine. The Consent Agenda is acted upon by one motion and n vote of the Council. Items may be removed from the Consent Agenda and placed on the Regular Agenda at the request of a Council Member or Citizen. The Consent Agenda contains the following items: 3. Approval/Acceptance of Minutes A. B. C. D. E. F. G. H. Minutes Minutes Minutes Minutes Minutes Minutes Minutes Minutes of Regular City Council Meeting of October 16, 2007 of Regular City Council Meeting of November 20, 2007 of Regular City Council Meeting of December 4, 2007 of Planning Board Meeting of December 5, 2007 (Draft) of Historic District Commission Meeting of October 8, 2007 of Community Appearance Commission of July 16, 2007 of Public Safety Committee Meeting of December 12, 2007 of Monroe Tourism Development Authority Meetings of September 118 6, 2007, October 11, 2007 and November 8, 2007 (Th 4. Budget Amendments A. Rescind Budget Amendment BA -2007-54 for Tourism Authority Sponsorship of Veterans Day Celebration Event at Monroe Regional Airport B. Rescind Budget Amendment BA -2007-53 and adopt Replacement Budget Amendment BA -2008-02 for Federal Assistance to Firefighters Grant Award 5. Budget Ordinances A. Amendment for Relocation of 16 -inch Water Main at Aeropointe Industrial Park Phase I B. Purchase of Ten T -Hangars at Monroe Regional Airport 6. Call for Public Hearings to be Held January 22, 2008 A. Zoning Map Amendment Request from G -B (General Business) to Conditional District "Monroe Crossing" for a Commercial. Planned Development to be Located at Dickerson Boulevard and West Roosevelt Boulevard (Monroe Mall) B. Zoning Map Amendment Request from GI (General Industrial) to Conditional District "Excel Personal Development" for Property Located on Curtis Street C. Zoning Text Amendment Request to Amend the Enforcement Process for Cars Parked in Unapproved Areas D. Amendment Request for Property Located at 150 S. Bivens Road to Conditional District "Metal Recycling Services" E. Six -Month Moratorium on Residential Subdivision Development 7. Carolina Transformer Superfund Settlement A. Acceptance of Offer B. Budget Amendment 8. Award of Contracts A. HVAC Improvements and Flooring at Recreation Centers B. Renovation of Old Armory 9. Annual Certification of Firefighters 10. Travel Policy for Elected Officials 11. Summary of Contracts Awarded Pursuant to 0-2001-17, Change Orders Approved Pursuant to R-2000-76, and Authority of City Manager to Settle Certain Claims Pursuant to 0-2004-27 REGULAR AGENDA Public Hearings — Please adhere to the following guidelines: • Proceed to the podium, and state your name and address clearly; • Be concise; avoid repetition; limit comments to three (3) minutes or less; • Designate a spokesperson for large groups. 12. Presentation of the Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2007 13. Resolution to Amend and Restate the Series Resolution for the Combined Enterprise System Revenue Bonds 14. Financing for City Facilities Renovations A. Resolution Amending Resolution R-2007-106 B. Public Hearing to Consider Adoption of Resolution Directing the Filing of an Application with the Local Government Commission for Financing Agreement C. Action from Public Hearing — Resolution Directing the Filing of an Application with the Local Government Commission for Financing Agreement 15. Consideration of Annexation Request by Forest City Land Group for 246.67 Acres Located on Rocky River Road — "Helmstead" 16. Consideration of Annexation Request by Snyder Development Group for 174.71 Acres Located on Rocky River Road.— "Howey Farms" 17. Zoning Map Amendment Request for Property Located on Rocky River Road from Union County RA -20 to Conditional District "Helmstead" for 698 Single-family Residential Units 18. Zoning Map Amendment Request for Property Located on Rocky River Road and New Town Road from Union County RA -20 to Conditional District "Howey Farms" for 508 Single-family Residential Units 19. Zoning Map Amendment Request from G -B (General Business) to Conditional District "Secrest Place" for a Commercial Planned Development to be Located at Secrest Price Road and Roosevelt Boulevard (Fast Track Request) A. Motion to Excuse Council Member Ashcraft B. Public Hearing C. Resolution of Land Development Compliance — Conditional District "Secrest Plaza D. Action — Zoning Map Amendment 20. Resolution of Intent to Abandon a Portion of Secrest Price Road A. Motion to Excuse Council Member Ashcraft B. Public Hearing 21. Zoning Map Amendment Request for 324 East Houston Street from R-10 (Residential High -Density) to Conditional District "324 East Houston Street 120 Duplex" (Continued from November 6, 2007 City Council Meeting) A. Public Hearing B. Action — Zoning Map Amendment - Denied 22. Utilities Concession for Turning Point 23. Public Comment Period A. Mr. Nathel Hailey — Presentation of "2007 Hall of Fame Member — Union County Branch of the NAACP" to Mayor Pro Tem P.E. Bazemore B. Pastor Dexter Feely — Jireh Preparatory School 01-08-08 n (Th (Th fl CITY OF MONROE CITY COUNCIL MEETING JANUARY 8, 2008 — 6:30 P.M. MINUTES The City Council of the City of Monroe, North Carolina, met in Regular Session in the City Hall Council Chambers, 300 W. Crowell Street, Monroe, North. Carolina, at 6:30 p.m. on January 8, 2008 with Mayor Bobby G. Kilgore presiding. Present: Mayor Bobby G. Kilgore, Mayor Pro Tem P.E. Bazemore, Council Members John Ashcraft, Billy Jordan, Lynn Keziah, Dottie Nash, Robert J. Smith, City Manager F. Craig Meadows, City Attorney Terry Sholar, and City Clerk Bridgette H. Robinson. Absent: None. Visitors: Nathel Hailey, Nancy Bush, Stephen Conti, Boyd McAteer, Harold Mills, Peter Cozens, Mike Helms, Dale Moore, Dexter Feely, Tina Saleem, Jaime Wise, Tamara Wilson, Myra Brinn, Lorraine Bryd, Fox Johnston, Kirk Rankin, Rick Becker, Peggy Neill, Steve Engel, Kathy Reid, Warren Wilson, Daryl Procunier, Bruce Bounds, Michele Shoultes, Candace Williams, Brady Williams, Tyler Williams, David Williams, Caroleene Couick, Harold Couick, Dottie Donahue, Mark Coan, Elaine Wooten, Homer Rushing, Alan Rushing, Annette Rushing, Boyd McAteer, Dale Ledbetter, James Brown, Pastor Osco Gardin, Jr., Elder Omar Rojas, Donna Ward, Bruce Ward, Charlitta Burruss, Donna Penegar, Bill Standish, Lynn Standish, Curt Metts, Crystal Donahue, Jack Robinson, Kyle Purser, Alex Garcia, Christiani Andreano, Edna Lowery, D.G. Broome, Perry Caskey, Judy Wicker, Mark Greene, D.C. McCallister, Beth Greene, Ginger Pope, Nancy Miller, Steve Xavier, Wes Rollins, M. Rollins, Chris Helms, David Couick, Royce Funderburk, David Funderburk, Jackie Ammons, Barbara Funderburk, Jim Loyd, Davey Plyler, J. Ivey, D.C. Wallace, John Chura, Bill Bolen, Belvia Yow, Loma Tyson, Charlotte Tyson, Don Beveridge, Harold Mills, Lori Craig, Alyssa Craig, Jimmy Craig, Wanda Craig, Stephen Conti, Barbara Conti, K.C. Long, Elizabeth Plyler, Wallen Plyler, O'Neil Plyler, Jerry Thomas, Ann Thomas, Denise Stegall, Mary Lou Clark, Kathy Trull, Sharon Isley, Stephen McGee, Steve Medlin, David Godfrey, John Jackson, Chad Shoultes, Eric Hill, and others. Mayor Kilgore called the Regular City Council Meeting of January 8, 2008 to order at 6:30 p.m. A quorum was present. Item No. 1. Police Department Recognitions. Mayor Kilgore administered Oaths of Office to Officer Adam Lewis Craig, Captain Joseph Bryan Gilliard, Captain David Samuel Williams, 122 n Lieutenant Donald Health Donahue, Lieutenant Bobby Allen Manus, Sergeant Robert Bruce Bartlett, Sergeant William Everette Bolen, Sergeant James Michael Fain, Sergeant Watinia Jan Goforth, Sergeant Gail Callahan Hicks, and Sergeant Joseph Albert Plyler: I, Adam Lewis Craig, Joseph Bryan Gilliard, David Samuel Williams, Donald Health Donahue, Bobby Allen Manus, Robert Bruce Bartlett, William Everette Bolen, James Michael Fain, Watinia Jan Goforth, Gail Callahan Hicks, and Joseph Albert Plyler, do solemnly swear that I will be alert and vigilant to enforce the criminal laws of this state; that I will not be influenced in any matter on account of personal bias or prejudice; that I will support and maintain the Constitution and laws of the United States, and the Constitution and laws of North Carolina not inconsistent therewith; and that I will faithfully and impartially discharge and execute the duties of my office as a law enforcement officer according to the best of my skill, abilities, and judgment; so help me God. /s/ Adam Lewis Craig /s/ Joseph Bryan Gilliard /s/ David Samuel Williams /s/ Donald Health Donahue /s/ Bobby Allen Manus /s/ Robert Bruce Bartlett /s/ William Everette Bolen /s/ James Michael Fain /s/ Watinia Jan Goforth /s/ Gail Callahan Hicks /s/ Joseph Albert Plyler Item No. 2. City Manager Comments. City Manager Meadows briefed Council on the following items: A. Natural Gas. The City set a new record demand on the natural gas system last week with 16,226 dt. The City currently has more natural gas customers than electric customers. B. Water Supply Update. As of Monday, the City has approximately 131 days of water remaining, based on current demand and utilization of supply from Union County. Staff recommends remaining with Stage 3 restrictions until additional water supply is obtained from the quarry, and substantial rainfall is received. C. Second Annual "Pigs in the Park BBQ." The Second. Annual "Pigs in the Park BBQ" festival is scheduled to be held April 11 and 12 at Belk Tonawanda Park. D. Leaf Collection. Leaf collection continues through the end of February. E. Old Quarry off Sutherland Avenue. At a meeting last week in Albemarle, DOT informed City officials that the City needed to take a formal position with regard to purchasing the old quarry off Sutherland Avenue. City Manager Meadows requested authorization from Council to write DOT to formally request that they sell the quarry property to the City for use in the City's water supply system. Council Member Nash made a motion to authorize the City Manager to write DOT to formally request that they sell the quarry property to the City for use in the City's water supply system. 123 Council Member Smith seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None CONSENT AGENDA Mayor Kilgore reviewed the Consent Agenda and asked if any member of the Council or citizen would like to have any items moved from the Consent Agenda to the Regular Agenda for discussion. Written background information was provided in advance in the Council Agenda Packets for each item on the Consent Agenda. No further discussion was held. One motion and vote was taken, which included approval of all items on the Consent Agenda. Item No. 3. Approval/Acceptance of Minutes. A. Minutes of Regular City Council Meeting of October 16 2007. Council Member Keziah moved to approve the Minutes of the Regular City Council Meeting of October 16, 2007. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None B. Minutes of Regular City Council Meeting of November 20, 2007. Council Member Keziah moved to approve the Minutes of the Regular City Council Meeting of November 20, 2007. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None C. Minutes of Regular City Council Meeting of December 4 2007. Council Member Keziah moved to approve the Minutes of the Regular City Council Meeting of December 4, 2007. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None 124 n 0 D. Minutes of Planning Board Meeting of December 5, 2007 (Draft). Minutes of the Planning Board meeting of December 5, 2007 were received as information by Council. E. Minutes of Historic District Commission Meeting of October 8 2007. Minutes of the Historic District Commission meeting of October 8, 2007 were received as information by Council. F. Minutes of Community Appearance Commission of July 16, 2007. Minutes of the Community Appearance Commission meeting of July 16, 2007 were received as information by Council. G. Minutes of Public Safety Committee Meeting of December 12 2007. Minutes of the Public Safety Committee meeting of December 12, 2007 'were received as information by Council. H. Minutes of Monroe Tourism Development Authority Meetings of September 6, 2007, October 11, 2007 and November 8, 2007. Minutes of the Monroe Tourism Development Authority meetings of September 6, 2007, October 11, 2007, and November 8, 2007 were received as information by Council. Item No. 4. Budget Amendments. A. Rescind Budget Amendment BA -2007-54 for Tourism Authority Sponsorship of Veterans Day Celebration Event at Monroe Regional'. Airport. Deputy Finance Officer Denise Stegall advised by memorandum that Council previously adopted Budget Amendment BA -2007-54 which transferred funds from the Monroe Tourism Development Authority's Unreserved Fund Balance to the current FY2007-08 budget in order to support marketing efforts for the 2007 Veteran's Day Weekend Celebration. Ms. Stegall advised that the Monroe Tourism Development Authority adopted their own budget each year and only the Authority could designate funds from their budget during the year. Therefore, staff recommended that Council rescind Budget Amendment BA -2007-54. Council Member Keziah moved to rescind Budget Amendment BA -2007-54. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None B. Rescind Budget Amendment BA -2007-53 and adopt Replacement Budget Amendment BA -2008-02 for Federal Assistance to Firefi • hters Grant Award. Deputy Finance Officer Stegall advised by memorandum that Council previously adopted Budget Amendment BA -2007- 53 which designated and appropriated $189,000 for the Federal Assistance to Firefighters Grant Program. Ms. Stegall advised that the grant was awarded for a total of $210,000 for replacement of the Fire Department's self-contained breathing apparatus (SCBA); however, Budget Amendment BA -2007-53 only recognized $189,000, the Federal share of expenditures, and 125 $21,000 of revenues appropriated from General Fund Fund Balance, which is the 10% local match required. Staff recommended that Council rescind Budget Amendment BA -2007-53 and adopt Budget Amendment BA -2008-02 in order to designate and appropriate the full amount of revenues and expenditures for this project. Ms. Stegall advised that the amount of funds to be appropriated from General Fund Unappropriated Fund Balance remained unchanged. Council Member Keziah moved to rescind Budget Amendment BA -2007-53 and adopt Budget Amendment BA -2008-02: BUDGET AMENDMENT BA -2008-02 1. Amendment necessary rescind Budget Amendment BA -2007-53 and to designate and appropriate funds received from the Federal Assistance to Firefighters Grant Program and from the General Fund Unappropriated Fund Balance to the fire department expenditure accounts: General Fund: Revenues: Appropriation of Fund Balance $ 21,000 Restricted Intergovernmental - Federal Assistance to Firefighters Grant $189,000 Expenditures: Restricted Intergovernmental — Federal Assistance to Firefighters Grant $210,000 Adopted this 8th day of January, 2008. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None Item No. 5. Budget Ordinances. A. Amendment for Relocation of 16 -inch Water Main at Aeropointe Industrial Park Phase L Engineering Director Jim Loyd advised by memorandum that Council approved the award of the roadway construction improvements for Aeropointe Industrial Park on August 21, 2007 to Dellinger, Inc. in the amount of $ 1,254,368.76 to build Aeropointe Parkway and to provide water/sewer service to the ATI Allvac development. Approval was also provided in the amount of $30,000 for the City's consultant, Kimley Horne & Associates, to prepare design drawings to provide a left turn lane along Rocky River Road and to relocate a 16 -inch asbestos water main owned by Union County. The improvements are required for the connection of Aeropointe Parkway to Rocky River Road. 126 Mr. Loyd advised that the State was to provide the base for the turn lane with their force account work with costs recovered from the $400,000 grant approved by a Municipal Agreement. Quantities are included in the work bid by Dellinger to provide for any milling and final overlay of Rocky River Road. The relocation of the 16 -inch water main is estimated at $150,000. Since the cost for this work was not included in the original budget, Staff recommended that Council adopt a Budget Ordinance Amendment in the amount of $120,000 to cover the costs of the work. The Water Resources Department is providing the $30,000 remainder of the estimated costs ($150,000-$120,000) from their approved funds since a portion of the work will resolve an elevation conflict with the proposed sewer crossing under Rocky River Road. In an effort to keep the construction improvements moving forward and to meet a March 2008 deadline by ATI Allvac for sewer service, the Engineering Department also recommended that n Council authorize the City Manager to enter into a change order with Dellinger, Inc. for the relocation once the agreement has been finalized. Council Member Keziah moved to adopt Capital Project Budget Ordinance Amendment BO - 2008 -02 and authorize the City Manager to enter into a change order with Dellinger, Inc. for the 16 -inch water main relocation: CAPITAL PROJECT BUDGET ORDINANCE AMENDMENT AEROPOINTE INDUSTRIAL PARK PHASE I - AEROPOINTE PARKWAY BO -2008-02 WHEREAS, the City Council approved BA -2007-27 on May 15, 2007 to appropriate $500,000 from the General Fund to a Capital Projects Fund for the purpose of building the first phase of Aeropointe Parkway; and, WHEREAS, the City Council approved BO -2007-15 on August 21, 2007 to appropriate an additional $155,430 from the General Fund Balance to complete the improvements and to accept a grant from the North Carolina Depailnient of Transportation for construction costs of the project in an amount not to exceed $400,000.00, less the cost of any force account work estimated at $75,000 performed by State forces on the project (i.e., grading and base construction for the turn lane on Rocky River Road); and, WHEREAS, the Engineering Depailnient requests additional funds in the amount of $120,000 be appropriated from the General Fund Balance in order to accomplish the 16 -inch asbestos water main relocation along Rocky River Road required by the North Carolina Department of Transportation as part of this project. NOW, THEREFORE, BE IT ORDAINED that the City Council hereby amends the Aeropointe Industrial Park Phase I Capital Project Fund and appropriates the following revenues and expenditures: REVENUES EXPENDITURES DESCRIPTION AMOUNT AS AMENDED Transfer from General Fund $775,430 Restricted Intergovernmental 325,000 DESCRIPTION AMOUNT Aeropointe Industrial Park Phase I Project $1,100,430 127 BE IT FURTHER ORDAINED that an amendment to the General Fund budget for FY 2007- 2008 is approved to appropriate additional fund balance to transfer $120,000 to the Aeropointe Industrial Park Phase I Capital Project Fund. Adopted this 8th day of January, 2008. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None B. Purchase of Ten T -Hangars at Monroe Regional Airport. Economic Development and Aviation Director Chris Plate advised by memorandum that the City was embarking on major capital improvement projects at the Monroe Regional Airport. A portion of the overall project was the purchase of ten T -Hangars from the Maxwell Group. He advised that the City planned to finance the hangars along with the other improvements, but the closing on the revenue bonds and transaction to purchase the hangars both occur on January 10, 2008. Mr. Plate advised that staff needed to secure short-term financing from the Electric Fund, not to exceed one week, to cover the purchase price of $359,000. This interest-free loan will be reimbursed to the Electric Fund upon closing of the revenue bonds and receiving these funds. The Economic Development Department — Aviation Division, recommended that Council adopt a Budget Ordinance for the purpose of purchasing ten T -Hangars from the Maxwell Group at the Monroe Regional Airport. Council Member Keziah moved to adopt Budget Ordinance BO -2008-03: BUDGET ORDINANCE MONROE REGIONAL AIRPORT SHORT-TERM LOAN FROM ELECTRIC FUND BO -2008-03 WHEREAS, the City desires to provide a first class general aviation airport to meet the aviation needs of the region and local business and industry, to promote economic development, and expand Monroe's tax base; and WHEREAS, Monroe's airport runway is too short to meet the needs of larger general aviation aircraft; and WHEREAS, the City is planning a significant investment in the Monroe Regional Airport; and WHEREAS, the City is closing on long-term financing on January 10, 2008, but short-term financing is necessary to move forward with the purchase of ten (10) T -Hangars, a portion of the overall project. NOW, THEREFORE, BE IT ORDAINED that the City Council of the City of Monroe will loan funds for a period of one week interest free from the Electric Fund to the Airport Fund and appropriates the following revenues and expenses: Airport Fund: Amount 128 n Revenue: Advance From Electric Fund Expense: Airport Fund Project Costs $359,000 $359,000 Electric Fund: Revenue: Appropriation of Fund Balance $359,000 Expense: Advance to Airport Fund $359,000 BE IT FURTHER ORDAINED THAT THE City Council authorizes the Mayor to sign the Promissory Note on the City's behalf. Adopted this 8t" day of January, 2008. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None Item No. 6. Call for Public Hearings to be Held January 22 2008. A. Zoning Map Amendment Request from G -B (General Business) to Conditional District "Monroe Crossing" for a Commercial Planned Development to be Located at Dickerson Boulevard and West Roosevelt Boulevard (Monroe Mall). Council Member Keziah moved to call for a public hearing to be held on January 22, 2008 at 6:30 p.m. to consider this request. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None B. Zoning Map Amendment Request from GI (General Industrial) to Conditional District "Excel Personal Development" for Property Located on Curtis Street. Council Member Keziah moved to call for a public hearing to be held on January 22, 2008 at 6:30 p.m. to consider this request. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None C. Zoning Text Amendment Request to Amend the Enforcement Process for Cars Parked in Unapproved Areas. Council Member Keziah moved to call for a public hearing to be held 129 n on January 22, 2008 at 6:30 p.m. to consider this request. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None D. Amendment Request for Property Located at 150 S. Bivens Road to Conditional District "Metal - Recycling Services." Council Member. Keziah moved to call for a public hearing to be held on January 22, 2008 at 6:30 p.m. to consider this request. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None E. Six -Month Moratorium on Residential Subdivision Development. Council Member Keziah moved to call for a public hearing to be held on January 22, 2008 at 6:30 p.m. to consider this request. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None Item No. 7. Carolina Transformer Superfund Settlement. City Attorney Terry Sholar advised by memorandum that the Carolina Transformer site in Fayetteville, North Carolina was contaminated due to leaking fluids from electric transformers. He advised that Monroe was identified as a possible contributor to the contamination since it was alleged that transformers owned by Monroe were disposed of by Carolina Transformer in the past. City Attorney Sholar advised that if this were so, Monroe was considered a potentially responsible party (PRP) under CERCLA and responsible for cleanup costs. City Attorney Sholar advised that the responsible parties have reached a tentative settlement of the costs with the Federal Government and are seeking contribution by all PRP's including Monroe. The settlement offer received by the City requests that the City contribute $90,000 toward the cleanup cost and in exchange, no further legal action will be taken against the City. The amount of contribution is based on the amount of electricity sold and distributed over all identified PRP's. Staff recommended that Council join in the settlement and contribute $90,000 or incur the cost of independently litigating its contribution in separate legal action. A. Acceptance of Offer. Council Member Keziah moved to accept the offer to join in the settlement. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, 130 Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None B. Budget Amendment. Council Member Keziah moved to adopt Budget Amendment BA - 2008 -01: BUDGET AMENDMENT BA -2008-01 1. Amendment to appropriate funds for the Carolina Transformer site superfund cleanup cost: Electric Fund: Revenues: Appropriation of Fund Balance $90,000 Expenditures: Electric System Maintenance $90,000 Adopted this 8th day of January, 2008. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None Item No. 8. Award of Contracts. A. HVAC Improvements and Flooring at Recreation Centers. Parks and Recreation Director Mike Courtney advised by memorandum that bids had been received for HVAC improvements to various City facilities. Based on a review of the bids, staff recommended that Council award contracts to Hinson Mechanical Company for HVAC improvements to Winchester Gym, Sutton Park Gym and Dickerson Center Gym for $244,553; Moriah for the sport court flooring for Dickerson Gym and Sutton Park Gym for $72,339.72; and The Sport Flooring Group for wood flooring for Winchester Gym for $107,000. Council Member Keziah moved to award contracts to Hinson Mechanical Company for HVAC improvements to Winchester Gym, Sutton Park Gym and Dickerson Center Gym for $244,553; Moriah for sport court flooring for Dickerson Gym and Sutton Park Gym for $72,339.72; and The Sport Flooring Group for wood flooring for Winchester Gym for $107,000. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None 131 fl B. Renovation of Old Armory. Parks and Recreation Director Courtney advised by memorandum that bids were received for the renovation of the Old Armory. He advised that due to the age of the Old Armory and unknown conditions of certain aspects of the project until construction begins, a contingency of $100,000 will be added. Based on a review of the bids, staff recommended that Council award the contract for the renovation of the Old Armory to H.C. Rummage, Inc. in the amount of $510,296, and establish a contingency of $100,000 to provide funds for any unanticipated conditions. Council Member Keziah moved to award the contract for the renovation of the Old Armory to H.C. Rummage, Inc. in the amount of $510,296, and establish a contingency of $100,000 to provide funds for any unanticipated conditions. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None Item No. 9. Annual Certification of Firemen. Fire Chief Ron Fowler advised by memorandum that N.C.G.S. §58-86-25 required that all certified fire departments submit a complete roster of its eligible fire personnel annually. He advised that this was necessary to maintain eligibility for line of duty death benefits as well as eligibility for State Pension Fund credit for individual members. Chief Fowler advised that State statute also required certification of the fire department roster by the governing board of the fire department. Staff recommended that Council certify the Fire Department roster as presented. Council Member Keziah moved to certify the Fire Department roster as presented. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None Item No. 10. Travel Policy for Elected Officials. Council Member Keziah moved to approve the Travel Policy for Elected Officials. Council Member Nash seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None Said Travel Policy for Elected Officials is hereby incorporated as a part of these Minutes as Exhibit "A." Item No. 11. Summary of Contracts Awarded Pursuant to 0-2001-17, Change Orders Approved Pursuant to R-2000-76, and Authority of City Manager to Settle Certain Claims - 132 Pursuant to 0-2004-27. City Manager Meadows advised by memorandum the award of contracts pursuant to Ordinance 0-2001-17 (Ordinance Delegating Authority to the City Manager with Respect to Certain Contracts), Change Orders pursuant to Resolution R-2000-76 (Resolution to Delegate Authority to City Manager to Approve Change Orders in the Amount Allowed by N.C. General Statutes), and City Manager Settlement of Claims pursuant to 0-2004-27. The following is a summary of contracts recently awarded under authority of 0-2001-17: Date Name Purpose Amount $12,000 11/29/07 Webb Real Property Services, LLC To provide appraisals in accordance with FAA guidelines for property located within the Runway Protection Zone (RPZ) for Monroe Regional Airport 11/29/07 MACTEC Engineering and Consulting, Inc. Asbestos consulting services at Winchester Head Start Building $13,700 11/29/07 GS2 Engineering & Environmental Consultants, Inc. To provide geotechnical exploration for three electric transmission towers sites *$3,200 12/10/07 Dawn Development Install 6" gas line to serve ATI Allvac — Bakers $138,000 12/10/07 The Moser Group To provide appraisals in accordance with FAA guidelines for property located within the Runway Protection Zone (RPZ) for Monroe Regional Airport $14,000 12/10/07 Dawn Development Install 2" gas line to serve The Park at Monroe $45,000 12/11/07 Thermal Techniques Preventive maintenance operation used to identify and correct potential electric abnormalities on the electrical system *$3,300 12/11/07 Kimley-Horn and Associates, Inc. Provide design services for left turn lane improvement: and relocation of Union County waterline along Rocky River Road for the Aeropointe Industrial Park $30,000 12/11/07 C & A Masonry For the labor of the brick and block foundation for Wastewater Treatment Office Building *$2,500 12/13/07 Roger Melton Painting To prepare surfaces and paint metal trim and columns under walkway *$535 12/13/07 Morrison Appraisal To perform appraisals for property for an elevated water storage tank located in the area of Rocky River and Highway 84 *$1,500 12/14/07 Southeastern Transformer Company Replacement of LTC at Hal Coan Substation *$4,999 12/14/07 Melrose South Pyrotechnics, Inc. _ 2008 Fireworks Show — July 4, 2008 $8,500 133 n 12/20/07 F. D. Lawrence Survey of Goldmine Road property for land acquisition requirement for the realignment of Goldmine Road Phase II for Monroe Regional Airport Runway Extension project $8,100 12/20/07 William R. Morgan Company Appraisal services for elevated water storage tank site *$2,500 12/20/07 Telecommunications & Industrial Consulting Services Corporation To assist the COM in acquiring General Public Utility Easements from property owners as part of the Natural Gas Pipeline Project _ $120,000 12/21/07 Lawrence & Associates, PA To survey and produce an General Public Utility Easement plat survey for the Aeropointe Industrial Park project *$3,500 1/2/08 Weatherguard, Inc. - For replacement roof at the Winchester Gym locker room area $49,500 *Approved by Department Director The following is a summary of Change Orders pursuant to Resolution R-2000-76: Date Name Purpose Amount 12/03/07 Dellinger, Inc. AeroPointe Industrial Park $16,520 12/03/07 Dickerson Architecture Police Firingange Facility Uptown pipe replacement — Church Street - $5,654.36 $7,000 12/07/07 Dawn Development 12/07/07 Newcon Construction Relocate Goldrnine Road- Phase I <$21,470> 12/13/07 Dellinger, Inc. Aeropointe Industrial Park $32,651 There were no Settlement Claims. This item was received as information of Council only and no action was required. REGULAR AGENDA Item No. 12. Presentation of the Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2007. Mr. John Kapelar of Potter and Company advised that they were responsible for the audit of the City of Monroe. He advised that the objective of the audit was to provide reasonable assurance that the Comprehensive Annual Financial Report was fairly presented and free of material misstatement. Mr. Kapelar advised that the audit was issued an unqualified opinion which is the highest level of assurance a CPA firm can issue. He advised that they also issued an unqualified opinion on the City's compliance with laws, regulations, contracts, and grants related to Federal and State monies received. Mr. Kapelar advised that he worked closely with the City Manager and the Finance Department and thanked them for their work. Council commended the City Manager and staff. Item No. 13. Resolution to Amend and Restate the Series Resolution for the Combined Enterprise System Revenue Bonds. Mayor Kilgore advised the members of the City Council 134 (Th fl that the next order of business was to consider and take action on an amended and restated series resolution providing for the issuance of the City's Combined Enterprise System Revenue Bonds, Series 2008A in the principal amount not exceeding of $30,920,000 and Combined Enterprise System Revenue Bonds, Series 2008B in the principal amount of $13,095,000 (collectively, the "Series 2008 Bonds"), including approvals ratifying an official statement and related bond purchase agreements and providing for provisions related to bond insurance. Mayor Kilgore noted that the amended and restated series resolution amends and restates the City Council's December 4, 2007 series resolution in order to provide for details related to the financial guaranty insurance policy and the reserve fund insurance policy to be issued by Assured Guaranty Corp. Given market conditions related to various bond insurance companies, the City and Banc of America Securities were unable to procure such insurance policies prior to December 4, 2007. Council Member Keziah introduced the Series Resolution entitled "AN AMENDED AND RESTATED SERIES RESOLUTION AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $44,015,000 COMBINED ENTERPRISE SYSTEM REVENUE BONDS, SERIES 2008A AND SERIES 2008B, OF THE CITY OF MONROE, NORTH CAROLINA, TO FINANCE THE COST OF CERTAIN ADDITIONAL IMPROVEMENTS TO THE CITY'S COMBINED ENTERPRISE SYSTEM, AND AUTHORIZING AND APPROVING THE FORM AND TERMS OF THE OFFICIAL STATEMENT AND THE BOND PURCHASE AGREEMENTS AND THE EXECUTION AND DELIVERY OF THE OFFICIAL STATEMENT AND THE BOND PURCHASE AGREEMENTS AND THE DISTRIBUTION AND USE OF THE PRELIMINARY OFFICIAL STATEMENT, THE OFFICIAL STATEMENT, THE BOND ORDER AND THIS SERIES RESOLUTION IN CONNECTION WITH THE PUBLIC OFFERING OF THE SERIES 2008A BONDS," a copy of which was submitted to the meeting, and moved that it be adopted with such revisions as the Mayor and the City Clerk, with the advice of counsel, may deem necessary and appropriate. Following discussion of the Series Resolution, Councilmember Smith seconded the motion and the Series Resolution was adopted by the following vote: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None Said Series Resolution R-2008-01 is hereby incorporated as a part of these Minutes as Exhibit "B.„ Item No. 14. Financing for City Facilities Renovations. City Manager Meadows stated that Council previously adopted Resolution R-2007-106 declaring the Council's intent, after a public hearing to accept a proposal from Wachovia Bank, N.A. to finance certain improvements to various City facilities. Subsequently, staff obtained additional financing proposals and requested that Council adopt a Resolution amending Resolution R-2007-106 to accept a proposal from SunTrust Leasing Corporation. This amendment will allow financing of the renovations at a substantially lower total cost to the City. NYC650980.1 135 City Manager Meadows advised that the next matter of business would be a public hearing regarding the financing of the City facilities projects. Subsequent to the Public Hearing and dependent upon Council's findings at the hearing, Council is requested to adopt a Resolution directing the filing of an application with the Local Government Commission. A. Resolution Amending Resolution R-2007-106. Council Member Nash moved to adopt Resolution R-2008-06: RESOLUTION AMENDING RESOLUTION R-2007-106 A RESOLUTION OF INTENT TO AWARD AN INSTALLMENT CONTRACT FOR FINANCING THE CONSTRUCTION, EQUIPPING AND FURNISHING OF THE RENOVATION OF CITY FACILITIES PROJECT R-2008-06 WHEREAS, the City Council (the "Council) of the City of Monroe (the "City") is considering the financing of improvements to the City's Police Firing Range and the renovation, furnishing and equipping of City Facilities Renovations in the amount of approximately $1,900,000, and WHEREAS, to secure the above financing the City of Monroe offered a security interest in the improvements, furnishings, equipment and other personal property to be installed, and WHEREAS, savings in time and closing costs could be realized by negotiating with the following lender; and WHEREAS, City staff proceeded to request and has obtained a proposal from Wachovia Bank, N.A. to provide financing for the project and a summary of said proposal is as follows: Number of Semi -Annual Payments 20 Amount Financed $1,900,000 Interest Rate 4.78% WHEREAS, the North Carolina Local Commission staff has recommended that the City obtain proposals from other lenders, and WHEREAS, City staff did obtain proposals from other lenders, and WHEREAS, a review of those proposals indicates that the proposal from SunTrust Leasing Corporation provides the best financing terms and lowest cost fix- financing the projects and a summary of said proposal is as follows: Number of Semi -Annual Payments 20 Amount Financed $1,900,000 Interest Rate 3.827% WHEREAS, the Council finds the proposal of SunTrust Leasing Corporation would promote the City's interest and intends to accept same, subject to a public hearing pursuant to G.S. 160A-20 (g) and approval of the Local Government Commission pursuant to G.S. 160A -20(e). NOW, THEREFORE, BE IT RESOLVED by the City Council that the terms proposed by SunTrust Leasing Corporation are in the best interest of the City of Monroe, and that: 136 1. A public hearing pursuant to G.S. 160A -20(g) was called for January 8, 2008 at 6:30 p.m. in the City Hall Council Chambers to, consider financing proposals and the City's intent to accept a proposal. 2. The City Council intends to accept the SunTrust Leasing Corporation proposal subject to the findings of the public hearing. Adopted this 8th day of January, 2008. Council Member Keziah seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None B. Public Hearing to Consider Adoption of Resolution Directing the Filing of an Application with the Local Government Commission for Financing Agreement. Mayor Kilgore opened this duly advertised public hearing. There being no speakers on this matter, Mayor Kilgore closed the public hearing. C. Action from Public Hearing — Resolution Directing the Filing of an Application with the Local Government Commission for Financing Agreement. Council Member Nash moved to adopt Resolution R-2008-02: RESOLUTION OF THE CITY OF MONROE, NORTH CAROLINA DIRECTING THE FILING OF AN APPLICATION WITH THE LOCAL GOVERNMENT COMMISSION FOR APPROVAL OF A FINANCING AGREEMENT AUTHORIZED BY NORTH CAROLINA GENERAL STATUTE 160A-20 ADDRESSING CERTAIN RELATED MATTERS AND MAKING RELATED FINDINGS R-2008-02 WHEREAS, the City Council (the "Council") of the City of Monroe (the "City") determined that improvements to the City's Police Firing Range and that the renovation, furnishing and equipping of certain City Facilities must be undertaken by the City, at a cost of approximately $1,900,000 including the costs of financing the renovations; and WHEREAS, the Council desires to finance the improvements, renovations, furnishings and equipment by the use of an installment contract authorized under North Carolina General Statute 160A-20; and WHEREAS, the Council desires to authorize the City Manager to apply to the North Carolina Local Government Commission for its approval of the financing agreement to pay costs of the improvements, renovations, furnishings and equipment including the cost of the financing, and to take all other action necessary in connection therewith; WHEREAS, findings of fact by this governing body must be presented to enable the North Carolina Local Government Commission to make its findings of fact set forth in North Carolina General Statute 159, Article 8, Section 151 prior to approval of the proposed financing. NOW, THEREFORE BE IT RESOLVED by the City Council, as follows: 137 Section 1. That the Council finds and determines and asks that the Local Government Commission find and determine from the City's application and supporting documentation: (a) That the proposed undertakings are necessary and expedient; (b) That the proposed undertakings are preferable to a bond issue for the savings in time and closing costs; (c) That the amount of the agreement will be sufficient but is not excessive for the proposed financing of the improvements, renovations, furnishings and equipment; (d) The City is in compliance with the Local Government Budget and Fiscal Control Act; (e) That the improvements, renovations, furnishings and equipment are feasible; (f) That the City's debt management procedures and policies are good; (g) No increase in taxes will be necessary to meet the sums to fall due under the proposed agreement; (h) The City is not in default in any of its debt service obligations; (i) The City's attorney has rendered an opinion that the proposed improvements, renovations, furnishings and equipment are authorized by law and are purposes and acquisitions for which public funds may be expended pursuant to the Constitution and laws of North Carolina. Section 2. That the City Manager is hereby authorized to do any and all things necessary to effectuate the financing agreement. Section 3. That this Resolution shall become effective on the date of its adoption. Adopted this 8th day of January, 2008. Council Member Keziah seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None Item No. 15. Consideration of Annexation Request by Forest City Land Group for 246.67 Acres Located on Rocky River Road — "Helmstead." Assistant City Manager Herron advised that the applicant had withdrawn this application. Item No. 16. Consideration of Annexation Request beSnyder Development Group for 174.71 Acres Located on Rocky River Road — "Howey Farms." Assistant City Manager Herron advised that the applicant had withdrawn this application. Item No. 17. Zoning Map Amendment Request for Property Located on Rocky River Road from Union County RA -20 to Conditional District "Helmstead" for 698 Single-family 138 0 Residential Units. Assistant City Manager Herron advised that the applicant had withdrawn this application. Item No. 18. Zoning Map Amendment Request for Proms ty Located on Rocky River Road and New Town Road from Union County RA -20 to Conditional District "Howey Farms" for 508 Single-family Residential Units. Assistant City Manager Herron advised that the applicant had withdrawn this application. Item No. 19. Zoning Map Amendment Request from G -B (General Business) to Conditional District "Secrest Place" for a Commercial :Planned Development to be Located at Secrest Price Road and Roosevelt Boulevard (Fast Track Request). A. Motion to Excuse Council Member Ashcraft. Council Member Ashcraft requested to be excused from discussion of this item. Council Member Keziah made a motion to excuse Council Member Ashcraft from discussion from Item No. 19. Council Member Smith seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None B. Public Hearing. Mayor Kilgore opened this duly advertised public hearing. Mr. Herron (Thadvised that this was a zoning map amendment request by BC -1 Development Corporation for 78.46 acres located on Highway 74 West and Secrest Price Road from GB (General Business) to Conditional District "Secrest Place." 0 0 Mr. Herron advised that the current Land Development Plan indicated that Highway 74 would be a complete commercial corridor. He advised that the proposed site was currently zoned General Business, with adjacent properties zoned. GB, R-40 (Residential Low -Density) and Conditional District "Woodlands Creek." Mr. Herron advised that the proposal falls under the Planned Development guidelines as detailed in the City's Land Development Plan. The applicant is proposing a maximum of 650,000 square feet of office and retail uses, with the largest being a freestanding Home Depot Home Improvement Warehouse and Kohl's Department Store. Also proposed are out -parcel sites for restaurants, smaller retail centers, and office space. The site plan indicates multiple signaled drive entrances into the development from Highway 74 with limited movement as approved by the NCDOT. This will be a modified super street system. This design does not allow full turning movements at the signals. One signal allows traffic to exit toward Monroe and the other allows traffic to enter from the Charlotte direction. In addition, drive entrances have been proposed off of Kempsar Lane and Secrest Price Road. A portion of the existing Secrest Price Road right-of-way is proposed to be abandoned from Highway 74 West to Woodlands Creek Drive and incorporated into the traffic system within the development. The building elevations submitted indicate the buildings will be constructed of brick, stone and stucco. Mr. Herron advised that all landscaping requirements including streetscape buffers, parking lot landscaping and screening buffers will be provided in accordance with the Unified Development 139 Ordinance (UDO). The front area still has green areas and trees as required by the UDO. There will be different areas of landscaping in front of these buildings. As required by the Ordinance, these buildings will be staggered and will all have the appearance of a front regardless of where the front door actually is. Mr. Herron advised that there was a 50 foot landscape buffer that was required and proposed along the properties on Kempsar Lane. Planning Board recommended approval of this request. He advised that the 50 foot buffer continued around the rear. Mr. Herron advised that where the buffer stopped, there was an undisturbed area. This is a stream channel and it is required by the Army Corps that this remain undisturbed. He advised that the developer was leaving the existing vegetation as shown. Mr. Herron stated that the buffer would then restart and continue onto the 60 foot right-of-way. He advised that there had been discussion about the subdivision that had been approved in making sure there is an appropriate buffer. Mr. Herron provided a brief overview of the elevation changes and berm requirements. Mr. Kirk Rankin, developer, stated that along the buffer on. Kempsar Lane, there was an addition to the plantings. He stated that there was a berm that was six to eight feet where there would be potentially the most impact from parking, etc., and due to topography, it tapered to approximately a three foot berm in the back corner. He advised that they had agreed with the Planning Department to install two speed humps and to post "No Thru Trucks." He stated that they had attempted to discourage any truck traffic from coming out of the development via Secrest Price and Fowler Secrest Roads and hoped to keep truck traffic within the development and then back onto Highway 74. Mr. Rankin stated there would be shops located on the front in order to somewhat breakup the visibility of the large parking area from Highway 74. He advised that there was no lumber storage out back. There is a chain link fence that the developer has agreed to put colored slats that will patch the back of the building so that people can not see through and see what is being stored in the back area. Mr. Rankin advised that with respect to the Home Depot "orange stripe," the Planning Board recommended that the six foot high orange stripe be reduced by 50% and Home Depot agreed to this recommendation. Council Member Nash expressed concern with the height of the buffer along Kempsar Lane. She advised that she had received concerns regarding the neighborhood from walk-through traffic. Mr. Rankin stated that with the ponds, etc. there was no more physical room and the /^h berm was as high as it could be built. 1 Mr. Ron Horvath, Horvath Associates, stated that part of the problem with the berm is that when you get the slope too steep, the berm will erode and become a maintenance problem. He stated that the plant material has been specified and reviewed by the City. He felt that it would not be a problem to go back and look at additional holly bushes or thornier -type bushes to discourage traffic. He felt this issue could be worked out. Council Member Jordan stated that rather than relying on berms with the vegetation, would the developer consider some type of fence. Mr. Horvath stated that he was not an advocate of fences. Council Member Jordan stated that these neighbors would be contending with walk - (Th through traffic. Mr. Horvath felt that fences required a lot of maintenance, they deteriorated, and 140 the majority of fences were kicked through. He felt that thorny shrubs and prickly bushes were more of a deterrant than a fence. Several members of Council agreed that a chain link fence would help prevent walk-through traffic. Additional recommendations were made to add shrubbery to make the fence more aesthetically pleasing. Council Member Jordan asked if the right-of-way were abandoned, how easy would it be for the traffic to navigate through the shopping center. Mr. Rankin stated that the development would maintain a two-lane road width which would involve some turns and would eventually come straight out to Highway 74. nMr. Fox Johnston, developer, stated that he was also a developer on Poplin Place and hoped that this development would be as successful. In response to the fence issue, Mr. Johnston felt that a chain link fence would be the best solution; however, it would be the most non -aesthetically pleasing situation. Although this was not his choice, he advised that he would be willing to install the chain link fence to fill in the gaps. Mr. Johnston stated that from a traffic standpoint, they asked for one traffic signal. However, during negotiations, the DOT asked them to look at a more efficient design which is more expensive and adds an additional traffic signal to function as one system so that there is a better level of service. Mr. Stephen Conti expressed concern with the access from Secrest Price Road to the parking lot. He stated that there would be an increase in traffic on a very narrow country road that was not going to be safe. He stated that in his opinion, people at the parking area would take a short cut to get out onto Fowler Secrest Road. He stated that he would like to see this stubbed off and not provide access into the parking lot. Mr. Boyd McAteer questioned the height and maintenance of the proposed berm. Mr. Rankin stated that the berm would be six to eight feet and if the beim was located on the developer's property, it would be the responsibility of the developer to maintain the berm. Mr. McAteer also expressed concern with walk-through traffic from the surrounding apartments. He advised that he had a fence on his property and questioned if it would remain. Mr. Rankin stated that they would not remove his fence. Mr. Horvath, stated that he understood the concerns of the neighborhood; however, no one could promise that a six to eight foot berm with landscaping would totally prevent being able to see the development or prevent lights from being visible. Mr. McAteer asked at what height would the berm be maintained. Mr. Horvath advised that the buffering materials were different than normal shrubbery and would grow naturally as high as possible; however, it took time for these plants to grow. He advised that the plants would start out between 24 and 30 inches high and would grow to be anywhere from six to 30 feet high. Mr. McAteer advised that he, to, would like to see the chain link fence installed and would like to get a commitment for the fence. 141 n n fl Mr. Harold Mills advised that his questions had been answered. Mr. John Leaird stated that he was the only resident present that resided on the other side of Kempsar Lane. He stated that when Woodbrook Apartments were built they advised that they were gong to put in a natural berm. He advised that the berm they installed was approximately two feet high and six feet apart. He _stated that he had to contend with walk-through traffic from the apartments. He stated that he did not have a problem with the development but felt that if a fence were not installed they would be facing -the same type problems. Council Member Keziah explained to Mr. Leaird the City currently follows a process called "conditional district zoning." This process requires the developer to build according to the permit issued by the City. He advised that conditional district zoning did not exist in the past. Mr. Brian Hale expressed concern with the entrance to Hone Depot. He agreed with the request of Mr. Conti to not have an access onto Secrest Price Road. He stated that if this could not be done, he would like to request that speed humps be installed in the housing development that is being built. Mayor Kilgore referred Mr. Hale to the Transportation Committee to address this concern. Council Member Smith and Engineering Director Loyd provided Mr. Hale with information concerning the Transportation Committee meetings. Mr. Rankin stated that there was an agreement to put shields on the lights to be located near Kempsar Lane as well as on the security lights in the back of the development. There being no other speakers, Mayor Kilgore closed the public hearing. C. Action — Zoning Map Amendment. Mayor Pro Tem Bazemore moved BE. IT ORDAINED that this property be rezoned from G -B (General Business) to Conditional District "Secrest Place" and that the Home Depot building have two stripes instead of one. Council Member Keziah seconded the motion, which passed unanimously with the following votes: AYES: Council Members Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None D. Action — Resolution of Land Development Compliance -- Conditional District "Secrest Plaza." Mayor Pro Tem Bazemore moved to adopt Resolution R-2008-10: RESOLUTION OF LAND DEVELOPMENT PLAN COMPLIANCE CONDITIONAL DISTRICT "SECREST PLACE" R-2008-10 WHEREAS, in accordance with the provisions of North Carolina General Statute 160A-383, the City Council does hereby find and determine that the adoption of the zoning map amendment for Conditional District "Secrest Place" further described below property is consistent with the adopted Land Development Plan and that the approval of the zoning map amendment for following described property is reasonable and in the public interest due to its consistency with the Land Development Plan and, as a result, its furtherance of the goals and objectives of the Land Development Plan. 142 n NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Monroe approves the zoning map amendment for property with Union County Tax Parcel Number(s): 09-298- 068A, 09-298-067C, 09-298-067H, and 09-298-067J. Adopted this 8th day of January, 2008. Council Member Keziah seconded the motion, which passed unanimously with the following votes: AYES: Council Members Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None Item No. 20. Resolution of Intent to Abandon a Portion of Secrest Price Road. A. Motion to Excuse Council Member Ashcraft. Council Member Ashcraft requested to be excused from discussion of this item. Council Member Keziah made a motion to excuse Council Member Ashcraft from discussion from Item No. 20. Council Member Smith seconded the motion, which passed unanimously with the following votes: AYES: Council Members Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore - NAYS: None B. Public Hearing. Mayor Kilgore opened this duly advertised public hearing. Engineering Director Jim Loyd advised by memorandum that Council adopted a Resolution of Intent on December 4, 2007 calling for a Public Hearing to be held on January 8, 2008 to consider a request from the Fletcher Bright Company to abandon a 1,150 foot section of Secrest Price Road extending from the northern right-of-way line of US Highway 74 to within 50 feet of the western right-of-way line of Woodlands Creek Drive. He advised that Fletcher Bright Company requested the abandonment to facilitate the development of Secrest Place retail development. Mr. Loyd advised that the street has been posted in at least two places along the maintained right-of-way and the Resolution of Intent has been published once a week for four consecutive weeks prior to the Public Hearing in accordance with the General Statutes. Staff recommended that Council adopt a Resolution permanently abandoning a portion of the maintained public right-of-way of Secrest Price Road extending from the northern right-of-way line of US Highway 74 to within 50 feet of the western right-of-way line of Woodlands Creek Drive. There being no other speakers, Mayor Kilgore closed the public hearing. Without object, action on this matter was deferred until the January 22, 2008 City Council Meeting pending DOT approval of the traffic signals for Secrest Place Development. 143 Item No. 21. Zoning Map Amendment Request for 324 East Houston Street from R-10 (Residential High -Density) to Conditional District "324 East Houston Street Du lex" (1 (Continued from November 6, 2007 City Council Meeting) A. Public Hearing. Mayor Kilgore opened the continued public hearing. Assistant City Manager Herron stated that this was a zoning map amendment request for property located at 324 East Houston Street to Conditional District "324 East Houston Street." Mr. Herron advised that Council had seen this request earlier on a fast track request. At that time, Council deferred the request to a future date. Mr. Herron advised that the Planning Board heard the request at its January meeting and the matter is being presented to Council for final consideration. Mr. Herron advised that the property was currently zoned. R-10 (Residential High -Density) and n was located within the South Monroe Historic District. The dwelling unit on the property is currently vacant and has been used as both a single and multi -family unit in the past. The dwelling has been vacant for a period that exceeds 180 days. In order to meet the Ordinance requirements for parking for this type if facility, the applicant has proposed to expand the area to provide the required spaces for bedrooms and visitors spaces required. Additionally, it was noted on the plan and signed off by the applicant that as part of the Conditional District, there will only be four persons per unit. By stating this as a condition, this will be mandatory, if approved. The applicant has also noted that the units will be drug and alcohol -free. Mr. Herron pointed out that these were noted in the application and that these will be enforced by the applicant, and are not zoning matters that could be enforced. Mr. Herron advised that the applicant would maintain these in a manner that is pleasing and acceptable to the community in trying to improve the community by limiting occupancy and keeping them drug and alcohol free. Mr. Herron stated that he had received a question as to why this matter was being discussed again. He advised that up until 2003, the City allowed duplexes on corner lots. However, with the adoption of the Unified Development Ordinance in 2003, the City was asked to eliminate duplexes except in multi -family zoning districts. The City currently only allows duplexes in multi -family zoning districts. Mr. Herron advised that any existing duplex was grandfathered. He advised that Monroe had a standard nonconforming Ordinance that all municipal and county governments have across the nation in that if you have a nonconforming use you are continued to operate as long as you do not cease operation for 180 days. fl Mr. Herron advised that in this situation, the building was used as a duplex. The power was disconnected in 2005 and was not used for well over 180 days. By discontinuing the nonconforming use, the Ordinance states that you must revert to a use that is permitted, in this case single-family. The Ordinance is based on use and not structure design. Mr. Herron advised that staff has received comments that the structure was built to be a duplex. He advised that zoning was not based on structure design but use of the property. Mr. Herron advised that is it based on the fact that any structure could be modified. The text amendment was presented to Council in January 2007 and Council denied the text amendment by a vote of four to three. Mr. Herron stated that after the denial of the proposed text amendment, the property owner approached staff and applied to rezone the property at 324 East Houston Street to a conditional district individually. The individual designation could allow the 144 fl duplex for this property only and would require the property to meet the standards for duplex development. Mr. Herron advised that the City received a valid protest petition for this case. A valid protest petition requires six affirmative votes in order for the amendment to pass. The Planning Board recommended denial of this request. Mr. James Brown, Trustee of Elizabeth Missionary Baptist Church, addressed Council on behalf of Pastor Osco Gardin requesting that Council approve the zoning amendment request. Ms. Nancy Bush spoke in opposition of the request. She referenced North Carolina case law and stated that she was not convinced that going from a one -family to a two-family was "unacceptably drastic." Ms. Bush stated that she was convinced that this was "spot zoning." She stated that in North Carolina, "spot zoning" was not illegal; however, it had been found to be illegal if it did not meet certain conditions. Ms. Bush contended that turning this house back into a two-family unit would not meet the criteria to keep it from being illegal. Ms. Bush stated that the first factor in the validity was the size of the tract involved. She stated the smaller the tract, the more likely it was that it would be found to be illegal spot zoning. Ms. Bush stated that the second factor was compatibility with an overall community plan. She stated that the Historic District Plan states unequivocally that these are single-family residences. She stated that if the benefits to the community were strong, it was not illegal. If however, the benefits are solely or in majority to the person owning the property and are seen as a greater detriment to the community and the neighbors surrounding it, then it is much more likely to be found to be illegal. Ms. Bush stated that over the three and a half year period she has lived in Monroe, this was the eighth time that she had discussed duplexes in this town. She stated that she had been referred to as a "carpet bagging racist" by a member of Elizabeth Missionary Baptist Church because she was against going back to what Monroe was prior to the Historic District being set up to protect homes and ownership. Ms. Bush stated that the last form of legality was the relationship between proposed uses and current uses of adjacent properties. She stated that the greater the disparity the more likely the rezoning was to be considered illegal. Ms. Bush stated that properties surrounding this house are single family. She stated that there were only eight of t -- these houses in the Historic District that are formerly two families that may become single family. Ms. Bush requested that Council continue to support the law in the City of Monroe. Dr. Jaime Wise addressed Council in opposition of this request. Dr. Wise stated that she was head of the Neighborhood Watch in the Historic District. She stated that the overall feeling was that they were against this becoming a duplex because they fear this would create an initiative for more duplexes to come about in the Historic District. Dr. Wise stated that in 2003 some Council Members voted on the 2003 Ordinance that caused this home to go back into a single-family home and she requested that the same Council Members who voted in 2003 continue to support what was put into effect. 145 Ms. Tamara Wilson stated that she disagreed with the rezoning of the property on Houston Street from single-family to duplex based on the fact that Elizabeth Missionary Baptist Church '\ originally requested building permits for a single-family residence. Ms. Wilson advised that she felt the issue regarding duplexes that lost their status and that have been denied re -instatement due to nonconformance be upheld by Council. Ms. Wilson suggested that if the church must have a duplex, perhaps it would be best to sell the property to a deserving family, even an undeserving family and allow the family to begin to build a foundation for wealth while becoming vested in the community. Ms. Wilson felt the church should look elsewhere for duplexes that were properly zoned and within the law if having a duplex was such an important requirement for the church. Ms. Wilson stated that a disjuncture with that building standing empty for a period of time while a family could have been living in it (Th made one wonder whether the true purpose of the property was to provide low-cost housing for people in need or to provide additional monies for the church. Ms. Wilson questioned whether the business of the church was to praise God or to appraise and purchase properties. She felt everyone wanted the same thing as a community. Ms. Wilson stated that she was not here to make money off of her property, she was here to live as peacefully and as quietly as possible and she had no further agenda. Council Member Keziah expressed strong opposition to the statements made by Ms. Wilson. Ms. Wilson apologized if she offended anyone for her statement; however, she advised that she had been offended during these meetings as well. Mr. Loyd Tucker stated that he owned two businesses and worked in downtown Monroe. He stated that he had served on various City boards and commissions. Mr. Tucker stated that there were 22 duplexes located within 1,000 feet of his property. He stated that he was somewhat of a historical preservationist and had opportunities to travel to various states. Mr. Tucker stated that he was in the process of converting two houses in the Historic District that were rental property and converting them back to single family using original materials. Mr. Tucker stated that the house at 324 East Houston Street could easily be turned into a single-family dwelling at a nice profit to anyone who was interested. He stated that there was nothing wrong with multi -family housing in historical districts. He felt that the problem in Monroe was a density problem. /-� There being no other speakers, Mayor Kilgore closed the public hearing. B. Action - Zoning Map Amendment (Denied). Council Member Keziah moved BE IT ORDAINED that this property be rezoned from R-10 (Residential High -Density) to Conditional District "324 East Houston Street Duplex." Mayor Pro Tem Bazemore seconded the motion, which failed with the following votes: AYES: Council Members Ashcraft, Keziah, Mayor Pro Tem Bazemore NAYS: Council Members Jordan, Nash, Smith, and Mayor Kilgore Item No. 22. Utilities Concession for Turning Point. Mayor Pro Tem Bazemore stated that he had received a request from Turning Point that the City consider exempting the shelter's utilities for a period of time. Turning Point advised that they were receiving more people than ever and 146 are having to turn people away because they had no space and could not financially afford to help them. Mayor Pro Tem Bazemore advised that Turning Point was operating at a deficit of $11,000 a month. Mayor Pro Tem Bazemore made a motion that the City assume the utility responsibilities for a period of six months and revaluate the situation at the end of this time frame. Council Member Keziah seconded the motion. Council Member Jordan asked how Turning Point's utilities were. City Manager Meadows advised that the average was approximately $2,000 per month. Council Member Jordan stated that he served on boards of organizations that received support from the City and whenever they lose funding from sources, they realize that once they received money from the City through the fl Outside Agency funding once a year, they realize there is no additional opportunity to come back and receive additional funding. Council Member Jordan stated that there were residents who through no fault of their own found it hard to pay their bills each month and they were not afforded the opportunity to have their bills waived for a period of time. He stated that Turning Point did good work and he did not have a problem with helping them; however, he was not sure if all the residents of Turning Point started out as citizens of Monroe and the utility monies received went towards providing the operations for the City's utility service. He felt if the City was going to help residents, the City needed to also look at opportunities to help residents who are a part of the City. Council Member Jordan felt this was opening up a door and he wanted Council to remember that when other requests come before Council that the door also be opened (7, at that time. He felt Council should be as compassionate to others' needs as the City wants to be towards Turning Point. Council Member Smith stated that he did not have a problem with providing additional funding for Turning Point; however, he did not think the City should set a precedent of paying utility bills. He felt that Council needed to allocate a certain amount of money in lieu of paying utility bills. Mayor Kilgore challenged Union County and surrounding municipalities to also contribute funding to help out Turning Point. Council Member Jordan called the question. Mayor Pro Tem Bazemore made a substitute motion to appropriate $2,000 a month for a period of six months from General Fund Unappropriated Fund Balance to be donated to Turning Point. Council Member Keziah seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None Item No. 23. Public Comment Period. 147 A. Mr. Nathel Hailey — Presentation of "2007 Hall of Fame Member — Union County Branch of the NAACP" to Mayor Pro Tem P.E. Bazemore. Mr. Nathel Hailey presented Mayor Pro Tem Bazemore with a plaque honoring him as the "2007 Hall of Fame Member — Union County Branch of the NAACP." B. Pastor Dexter Feely — Jireh Preparatory School. Pastor Dexter Feely, President of Jireh Preparatory School, stated that the school had been functioning in the City for three years and provided a service for all youth of all ages. He advised that his program benefited children and offered services to the underprivileged, disadvantaged, and students who have been suspended from the public school system and cannot return to school. Pastor Feely felt that he was being "scrutinized" by the City as to where he could house the school. He stated that he contacted officials and agreed to comply with all the City's Ordinances. He advised that to no avail, the nCity had refused to help. Pastor Feely advised that he had moved from his location on Old Charlotte Highway to 1523 Morgan Mill Road. He advised that the school could not function at this location because of zoning -issues and the children had nowhere else to go. He asked that Council allow him to continue to operate his school at the Morgan Mill Road location. Pastor Feely advised that the Zoning Department was not going to approve anything over night and asked that the City provide them some alternate locations for this school. Assistant City Manager Herron stated that staff had encouraged Pastor Feely to make this a conditional district request; however, Pastor Feely had not filed an application. He advised that staff had also discussed the fast track option. Mr. Herron stated that there were Ordinance and safety requirements. He advised that the site on Morgan Mill Road was not a normal site that staff would recommend for a school; however, the final decision is at the discretion of Council. Mr. Herron stated that before going through a process where a potential site could not be recommended, he would ask that Pastor Feely meet with staff to look at other potential sites. Council Member Jordan asked Pastor Feely why the school relocated to Morgan Mill Road. Pastor Feely advised that his lease came to an end on Old Charlotte Highway and the owner was selling the property. He advised that they were pursuing purchasing the property; however, the owner would not lower his asking price and the bank would riot loan the amount the owner was asking for the property. Mr. Herron stated that the standards set for schools required acreage that had open space and other safety factors with regard to traffic access. He stated that this was standard commercial property on Morgan Mill Road. Council Member Keziah asked if a temporary permit could be issued while an alternate location could be found. Mr. Herron stated staff would work with the Fire Department and Building Standards Department to see if a temporary permit could be issued and also define "temporary." Mr. Herron advised that staff would then ask Pastor Feely to work through the conditional district process to find a permanent acceptable location. Council Member Jordan asked if the Ordinance would allow Pastor Feely to prepare a statement requesting that the fast track fee be waived or did the request have to be site specific to a 148 n property. City Attorney Sholar advised that Council had the discretion to waive a fast track fee anytime. Council Member Ashcraft moved to waive the fast track fee for Jireh Preparatory School. Mayor Pro Tem Bazemore seconded the motion, which passed unanimously with the following votes: AYES: Council Members Ashcraft, Jordan, Keziah, Nash, Smith, Mayor Pro Tem Bazemore, and Mayor Kilgore NAYS: None There being no further business, the Regular City Council Meeting of January 8, 2008 adjourned at 9:05 p.m. Attest: obby . gore, Mayor 01-08-08 inson, City Clerk 149 Exhibit "A" Exhibit "A" y� f{TqNis, �':. 4t,April �'¢' ,, Policy: Travel Policy for Elected Officials Effective Date: August 21, 2001 Revision Effective Date: February 5, 1, 2007, January 1, 2008 2002, Policy Number: GA -02 Page 1 of 8 City Council Mayor .41e.,<____, Responsible Party TRAVEL POLICY FOR ELECTED OFFICIALS SECTION 1 Purpose. It is the intent of this policy to provide City elected officials a comprehensive reference for uniform interpretation of payment or reimbursement for travel expenses pertaining to official City travel and subsistence while conducting official City business as defined herein. SECTION 2 Applicability of Travel Policy. This policy is applicable to all elected officials serving the City of Monroe. SECTION 3 General Policy. A. An elected official traveling on official City business representing the City should exercise the same care in incurring expenses that a prudent person would exercise if traveling on personal business and expending personal funds. B. Official travel expenses will be reimbursed in accordance with this Administrative Policy. C. Officials authorized to use City credit cards may elect to use them instead of reimbursement; all receipts for expenditures must be submitted to the City Clerk in order for the expenditures to be approved. SECTION 4 Definitions. A. Authorizing Party. An individual authorized by this policy to approve or disapprove requests for travel, cash advances, travel reimbursements, etc. B. Official City Business. Travel that has a direct benefit to the City by enhancing the elected official's knowledge on various issues and responsibilities of local government or where the elected official is representing the City in their official capacity as a City Council Member. Examples of travel that would meet this requirement include, but are not limited to seminars and conferences offered by the National League of Cities, N.C. League of Municipalities, N. C. Legislative Conferences, ElectriCities and the Union County Chamber of Commerce. Travel Policy No.: GA -02 Policy Name: Travel Policy for Elected Officials Page 2 of 8 and expenses related to partisan political activities or that are not directly beneficial to the City shall be paid for by the individual elected official without reimbursement by the City. C. Reimbursements. All reimbursement requests shall be filed for approval and payment within five (5) working days after the travel period ends. D. Requesting Party. The person who will be reimbursed for travel costs incurred while conducting City business or visiting for employment. E. Subsistence. Subsistence is an allowance related to meals, based on actual expenses incurred by the elected official. F. Incidentals. Costs related to tips and telephone calls. SECTION 5 General Guidelines. Airline tickets and registrations for the elected official will be paid directly by the City. All other costs will be paid directly by the requesting party, and will not be billed to the City. The requesting party is encouraged to use travel agents for airline tickets and to reserve transportation and lodging in advance when possible. The elected official will be reimbursed for actual costs incurred only, subject to the limitations established in this policy. A. Travel requests shall be coordinated through the City Clerk. Travel authorization forms are to be submitted to the Mayor prior to travel date. Travel authorization forms that include air travel should be submitted timely so that discount rates may be obtained. B. The City Clerk will receive a copy of each approved Travel Authorization Form. The City Clerk is responsible for determining that an unencumbered appropriation sufficient to cover the estimated cost of the approved travel remains in the expenditure item. If a sufficient balance remains in the expenditure item, the estimated travel cost will be encumbered. If the remaining balance in the expenditure item is insufficient to cover the estimated cost of travel and other monies are not yet available, the City Manager will be notified by the City Clerk. SECTION 6 Travel Advances. The City of Monroe will provide advance funds if the estimated expense exceeds one hundred dollars ($100.00) or two (2) nights stay. r‘' SECTION 7 Specific Guidelines Relating to Transportation, Subsistence, and Other Cost. Policy No.: GA -02 Policy Name: Travel Policy for Elected Officials C\ A. Transportation. Page 3 of 8 1. Air Line Travel. Actual coach fare (substantiated by receipt) will be reimbursed. First class travel should be used only in extraordinary circumstances. Penalties and charges resulting from the cancellation of airline reservations (or other travel reservations) shall be the City's obligation if the elected official's cancellation or change is made at the convenience of the City or in the event of accidents, serious illness or death within the individual's immediate family, or other critical circumstances beyond the control of the individual, the City will pay the penalties and charges. 2. Personal Vehicle. The elected official shall use his/her personal vehicle for travel and be reimbursed. Actual Mileage is reimbursable mileage, measured from the elected official's residence or other departure location to the destination and return. Parking fees, tolls, and storage fees are reimbursable. Receipts are required. 3. Rental Vehicle. A receipt is necessary for reimbursement. Rental vehicles are to be used as a last resort. Use of a rental vehicle must be approved in advance. B. Lodging. The Travel Authorization Form shall include the lodging accommodations as a part of the travel. C. Subsistence. Actual costs of meals (substantiated by receipts) or per diem allowance will be reimbursed. In all situations in which a City -issued credit card is used, a detailed receipt showing itemized purchases shall be submitted as a part of the Travel Reimbursement and Expense Report. In some situations, it may be appropriate for the City to bear the cost for a business meal for other individuals. Receipt and supporting documentation as to the purpose shall be provided for the business meal as a part of the reimbursement request or credit card voucher. In no case, shall the cost of alcohol be reimbursed or paid by the City without reimbursement to the City by the elected official. D. Spousal Travel Costs to State and National Conferences. In situations where a spouse will be traveling with the elected official to state and national conferences, the following procedures shall be adhered to: Policy No.: GA -02 Policy Name: Travel Policy for Elected Officials fl Page 4 of 8 • Reservations and payment for air travel for a traveling spouse shall be reimbursed by the City, when prior approval has been received by the Mayor; • Costs for meals for the spouse of an elected official shall be reimbursed by the City (substantiated by receipts); and • The additional costs for overnight stays at a hotel/motel shall be paid for or reimbursed by the City (substantiated by receipts). E. Companion Travel Costs. In situations where a family member(s) or other companion (other than a spouse) will be traveling with the elected official, the following procedures shall be adhered to: • Reservations and payment for air travel shall be placed on a personal credit card for the family member(s) or other companion; • Costs for meals for the family member(s) or other companion shall be paid for and accounted for separately or handled by reimbursement to the City, utilizing receipts for documentation; and • The additional costs for overnight stays at a hotel/motel shall be paid for or reimbursed to the City at the cost difference above the designated "single rate." SECTION 8 Procedure for Travel Authorization. A. Submission, approval and processing of reimbursement requests. 1. A "Travel Authorization Form" will be completed by the elected official and/or City Clerk detailing the purpose of travel, destination, and estimated costs. This form must be signed off on by the Mayor preferably in advance of the travel, but prior to payment of registration fees, hotel reservations and reimbursement of City funds. 2. The Travel Reimbursement Request and Expense Report will be prepared by the City Clerk for the elected official along with the necessary processing. 3. The Director of Finance and Administration will review so as to determine that the Travel Reimbursement Request and Expense Report has been properly approved, that it is mathematically correct, and that requested reimbursements agree to submitted receipts, when required, and are within the limits set by this Policy. If an error in the reimbursement request is found, the requesting party will be informed and the error will be corrected before payment is made. Policy No.: GA -02 Policy Name: Travel Policy for Elected Officials TRAVELPOLICY C` Page 5 of 8 4. The items which are NOT reimbursable consist of, but are not limited to, the following: 1. Any miscellaneous expense not supported by a receipt. 2. Meals included in registration fees. 3. Alcoholic beverages. 4. Movie rental. 5. Snacks or drinks other than meal. 6. Any traffic fines. 5. If the amount received as a travel advance exceeds the reported travel expense, settlement shall be made at the time the Travel Reimbursement Request and Expense Report is submitted. Policy No.: GA -02 Policy Name: Travel Policy for Elected Officials Appendixes - A. Appendix 1 B. Appendix 2 Copy of a Travel Authorization Form Copy of a Travel Reimbursement Request and Expense Report Page 6 of 8 Policy No.: GA -02 Policy Name: Travel Policy for Elected Officials CITY OF MONROE TRAVEL AUTHORIZATION FORM FOR ELECTED OFFICIALS Page 7 of 8 Elected Official Name Date Funds Needed: Today's Date: Purpose of Travel Destination Date(s) Travel to Occur: Budget Account Number(s) to be Charged: TRAVEL FUNDS REQUESTED (insert amounts and answer questions below): Estimated Costs 1) Registration Fees 2) Lodging Expenses 3) Meals and Incidentals Allowance 4) Transportation Costs Funds Needed in Advance Total Estimated Costs of Travel Funds Needed in Advance 1) IF REGISTRATION FEES are needed, make payable to Are registration fees to be paid in advance? YES NO 2) Name of lodging facility: Rate per night $ Government discount requested? YES NO 3) Number of meals anticipated while on travel: 4a) Will personal vehicle be used for transportation? YES NO Anticipated number of miles to be traveled: 4b) If air fair is incurred, name of airline: I HEREBY CERTIFY THAT ALL FUNDS REQUESTED ON THIS FORM ARE TO BE USED IN THE CONDUCT OF OFFICIAL CITY BUSINESS. ANY FUNDS RECEIVED BUT NOT SPENT BY ME ARE TO BE RETURNED TO THE CITY WITHIN THREE WORKING DAYS AFTER MY RETURN FROM THIS TRAVEL. FUNDS NOT RETURNED TO THE CITY WITHIN THE SPECIFIED PERIOD MAY BE COLLECTED BY PAYROLL DEDUCTION. Elected Official Signature: !f APPROVAL: Mayor/Date AVAILABILITY OF FUNDS: Date: Director of Finance and Administration Policy No.: GA -02 Policy Name: Travel Policy for Elected Officials Page 8 of 8 CITY OF MONROE TRAVEL REIMBURSEMENT AND EXPENSE REPORT FOR ELECTED OFFICIAL ** ATTACH COPY OF APPROVED TRAVEL REQUEST FORM TO THIS REPORT **List ALL expenses incurred, including amounts charged to City** Day/ Date Sunday Monday Tuesday Wednesday Thursday Friday Saturday NATURE OF EXPENSE ach receipts. ipplicable to thisie TOTAL Meals and Incidentals Allowance* Lodging Registration Fees Air Fare Car Rental Cab Fare Gasoline Parking Fees Tolls Miscellaneous Other (describe) Personal auto mileage miles at $0. per mile TOTAL Notes/Remarks: AMOUNT DUE _ CITY (check one) _ ELECTED OFFICIAL CHARGES INCURRED ON CITY CREDIT CARD Less Amounts Charged (list charges below) Total Elected Official Expenses Less Funds Advanced by City NET EXPENSE REPORT (describe expenses in blocks below under the correct day) I CERTIFY THAT THE FOREGOING EXPENSES WERE INCURRED IN THE CONDUCT OF OFFICIAL CITY BUSINESS. Elected Official/Date Mayor/Date Director of Finance and Administration/Date *Prorated, if applicable (Travel Policy, Section 7C) n Exhibit "B" CITY OF MONROE NORTH CAROLINA AMENDED AND RESTATED SERIES RESOLUTION Adopted January 8, 2008 R-2008-01 CITY OF MONROE, NORTH CAROLINA COMBINED ENTERPRISE SYSTEM REVENUE BONDS, SERIES 2008A AND SERIES 2008B NYC642431.10 fl ARTICLE I Section 101. Section 102. Section 103. ARTICLE II Section 201. Section 202. Section 203. Section 204. ARTICLE III Section 301. Section 302. Section 303. Section 304. ARTICLE IV Section 401. Section 402. Section 403. Section 404. Section 405. Section 406. Section 407. Section 408. ARTICLE V Section 501. ARTICLE VI Section 601. Section 602. Section 603. Section 604. Section 605. ARTICLE VII Section 701. TABLE OF CONTENTS Page DEFINITIONS Meaning of Words and Terms 2 2 Amendment of Section 101 of the Order 4 Rules of Construction 5 AUTHORIZATION, FORM, ISSUANCE, DELIVERY AND REGISTRATION OF SERIES 2008 BONDS 5 Authorization and Purposes of Series 2008 Bonds 5 Forms of Series 2008 Bonds 6 Details of Series 2008 Bonds 6 Issuance of Series 2008 Bonds; Application of Proceeds 7 REDEMPTION OF SERIES 2008 BONDS 9 Redemption of Series 2008 Bonds 9 Selection of Series 2008 Bonds for Redemption 9 Redemption Notice for Series 2008A Bonds 9 Redemption Notice for Series 2008B Bonds 11 ACCOUNTS, SUBACCOUNTS, REVENUES AND FUNDS 12 Establishment of Subaccounts and Account 12 Revenues Received by the City 12 Application of Money in the Series 2008 Subaccount of the Sinking Fund Account 13 Application of Money in the Special Reserve Account; Remedy of Deficiency 14 Application of Money in the Series 2008 Subaccount of the Redemption Account 15 Investment of Money 16 Payment of Principal, Interest and Premium and Pledge of Net Revenues 17 Tax Covenant 18 THE TRUSTEE 18 Confirmation of Duties by Trustee 18 SUPPLEMENTAL SERIES RESOLUTIONS 18 Modification of Series Resolutions without Consent of Owners 18 Modification of Series Resolution with Consent of Owners 19 Series 2008 Bonds Affected 20 Exclusion of Series 2008 Bonds 20 Responsibilities of Trustee and City under this Article 20 DEFEASANCE 21 Release of Series Resolution 21 ARTICLE VIII Section 801. Section 802. ARTICLE IX Section 901. Section 902. Section 903. Section 904. Section 905. Section 906. Section 907. Section 908. Section 909. Section 910. THE POLICY 22 Payment Procedure Under the Policy 22 Miscellaneous Insurance Provisions 26 MISCELLANEOUS PROVISIONS 27 State Law Governs 27 Headings 27 Application to Local Government Commission 27 Approval of Purchase Agreements and Direct Placement 27 Authorization of Preliminary Official Statement and Approval of Final Official Statement 28 Authorization, Execution and Delivery of Reimbursement Agreement 29 Authorization for Other Acts 29 Continuing Disclosure Covenant 29 Manner of Giving Notice 32 Series Resolution Effective 33 Exhibit A Description of the Additional Improvements Financed with Series 2008A Bonds A-1 Exhibit B Description of Additional Improvements Financed with Series 2008B Bonds B-1 Exhibit C Form of Combined Enterprise System Revenue Bond, Series 2008A C-1 Exhibit D Form of Combined Enterprise System Revenue Bond, Series 2008B D-1 ii AN AMENDED AND RESTATED SERIES RESOLUTION AUTHORIZING THE ISSUANCE OF $44,015,000 COMBINED ENTERPRISE SYSTEM REVENUE BONDS, SERIES 2008A AND SERIES 2008B, OF THE CITY OF MONROE, NORTH CAROLINA, TO FINANCE THE COST OF CERTAIN ADDITIONAL IMPROVEMENTS TO THE CITY'S COMBINED ENTERPRISE SYSTEM, AND AUTHORIZING AND APPROVING THE FORM AND TERMS OF THE OFFICIAL STATEMENT AND THE BOND PURCHASE AGREEMENTS AND THE EXECUTION AND DELIVERY OF THE OFFICIAL STATEMENT AND THE BOND PURCHASE AGREEMENTS AND THE DISTRIBUTION AND USE OF THE PRELIMINARY OFFICIAL STATEMENT, THE OFFICIAL STATEMENT, THE BOND ORDER AND THIS SERIES RESOLUTION IN CONNECTION WITH THE PUBLIC OFFERING OF THE SERIES 2008A BONDS. WHEREAS, the City of Monroe, North Carolina (the "City") adopted an order on May 3, 1994, as amended by a First Supplemental Bond Order adopted by the City on October 6, 1998 (collectively, the "Order"), which authorizes the City to issue bonds in accordance with Section 208 thereof; WHEREAS, the Order provides that the City may issue Parity Indebtedness (as defined in the Order) for purposes of refinancing outstanding Indebtedness of the City and financing the costs of Additional Improvements to the Combined Enterprise System (each as defined in the Order); WHEREAS, the City Council of the City has previously adopted a series resolution on December 4, 2007, authorizing the issuance of revenue bonds to finance the cost of certain improvements to the City's Combined Enterprise System; WHEREAS, the City Council of the City desires to amend and restate the December 4, 2007 series resolution to reflect, among other things, provisions related to a financial guaranty insurance policy and a financial guaranty reserve fund insurance policy; WHEREAS, the City Council of the City has determined that the issuance of the bonds rhereinafter referred to in order to finance the cost of certain improvements to the City's existing Combined Enterprise System will benefit and be in the best interests of the City; WHEREAS, the City has determined that the definition of Revenues (as defined in the Order) should be amended pursuant to Section 1101 of the Order to include certain items that were heretofore excluded; WHEREAS, the City Council and the Trustee do not believe that such amendment will materially and adversely affect the interest of the Holders and Owners (each as defined in the Order); and WHEREAS, the City Council deems it to be in the City's best interest to approve such amendment through the adoption of this Series Resolution; now, therefore, BE IT RESOLVED by the City Council of the City of Monroe, North Carolina: ARTICLE I DEFINITIONS Section 101. Meaning of Words and Terms. Unless otherwise required by the context, words and terms used herein which are defined in the Order shall have the meanings assigned to them therein, and the following words and terms shall have the following meanings: "Bond Registrar" means The Bank of New York Trust Company, N.A., Jacksonville, Florida, as designated by Section 201. (Th "Bond Year" means the period commencing on March 1 of any year and ending on the last day of each February of the following year. "Closing" means the delivery of and payment for the Series 2008 Bonds. "Closing Date" means the date of the Closing. "Escrow Agent" means collectively The Bank of New York Trust Company, N.A., its respective successors and assigns. "Insurer" means Assured Guaranty Corp., a Maryland -domiciled insurance company, and any successors or assigns thereof. "Interest Payment Date" means March 1 or September 1, as the case may be. "Issuance, Sale and Closing Certificate" means the certificate of the City Manager filed pursuant to this Series Resolution with the Trustee at Closing setting forth certain details of the Series 2008 Bonds and other terms and provisions relating to the sale and issuance of the Series 2008 Bonds as provided for herein together with such other details, terms and provisions as the City Manager may determine in order to effect and facilitate the Closing. "Policy" means the financial guaranty insurance policy issued by the Insurer guaranteeing the scheduled payment of principal of and interest on the Series 2008A Bonds when due. "Regular Record Date" means the 15th day of the month preceding any Interest Payment Date, whether or not a Business Day. "Reimbursement Agreement" means the Reimbursement Agreement, dated as of January 1, 2008, by and between the Reserve Policy Provider and the City. "Reserve Policy" means the financial guaranty insurance policy issued by the Reserve Policy Provider that guarantees certain payments to the Special Reserve Account with respect to the Series 2008A Bonds as provided therein and subject to the limitations set forth therein. 2 "Reserve Policy Provider" means Assured Guaranty Corp., a Maryland -domiciled insurance company, and any successors or assigns thereof. "Serial Bonds" means the City of Monroe Series 2008A Bonds which are designated as Serial Bonds in the Issuance, Sale and Closing Certificate. "Series 2008 Bonds" means the Series 2008A Bonds and the Series 2008B Bonds. "Series 2008A Bonds" means the City of Monroe, North Carolina Combined Enterprise System Revenue Bonds, Series 2008A. "Series 2008B Bonds" means the City of Monroe, North Carolina Combined Enterprise System Revenue Bonds, Series 2008B. "Series 2008 Subaccount of the Additional Improvements Account" means the subaccount created and so designated by Section 401. "Series 2008 Subaccount of the Interest Account" means the subaccount created and so designated by Section 401. "Series 2008 Subaccount of the Principal Account" means the subaccount created and so designated by Section 401. "Series 2008 Subaccount of the Redemption Account" means the subaccount created and so designated by Section 401. "Series 2008 Subaccount of the Sinking Fund Account" means the subaccount created and so designated by Section 401. "Sinking Fund Requirement" means, with respect to the Term Bonds and for any Bond Year, the principal amount fixed or computed for retirement by purchase or redemption on or prior to March 1 of the following Bond Year. The Sinking Fund Requirement for the Term Bonds shall be initially the respective principal amounts of such Term Bonds for retirement on each March 1 as fixed in the Issuance, Sale and Closing Certificate. If during any Bond Year, the total principal amount of Term Bonds retired by purchase or redemption under the provisions of this Series Resolution shall be greater than the amount of the Sinking Fund Requirement for such Term Bonds, the subsequent Sinking Fund Requirements for such Term Bonds shall be reduced in such amount aggregating the amount of such excess as shall be specified in an Officer's Certificate filed with the Trustee prior to the next ensuing February 15. "Special Reserve Account" means the City of Monroe Combined Enterprise System Special Reserve Account, Series 2008A created and so designated by Section 401 of this Series Resolution. "Special Reserve Account Requirement" means the dollar amount which shall be set forth in the Issuance, Sale and Closing Certificate. "Term Bonds" means the Series 2008A Bonds, which are designated as Term Bonds in the Issuance, Sale and Closing Certificate, and the Series 2008B Bonds. Section 102. Amendment of Section 101 of the Order. The defined term "Revenues" is hereby amended and restated in its entirety and shall read as follows: "Revenues" means all receipts, income, proceeds and money received in any period by or for the City in respect of the Combined Enterprise System, including, but without limiting the generality of the foregoing, (a) all payments, proceeds, fees, charges, rents, including, without limiting the generality of the foregoing, tap, connection, developer, capacity and impact fees and special assessments (except to the extent such moneys are set aside specifically to pay the costs of a capital project for which such fees or assessments are levied) and all other income derived by or for the City for the use of and for the services and facilities furnished by or from the operation or ownership of the Combined Enterprise System, and all other income derived by the City from the operation or ownership of the Combined Enterprise System, and all rights to receive the same, whether in the form of accounts receivable, contract rights or other rights, and the proceeds of such rights whether now owned or held or hereafter coming into existence, and (b) any proceeds o_ f use and occupancy or business interruption insurance; but there shall not be included in "Revenues" (i) the proceeds of any gifts, grants, bequests, contributions or donations, (ii) the proceeds from the sale and disposition of all or any part of the Combined Enterprise System, (iii) reimbursements received by the City of advances made by it in respect of (A) the Improvements, (B) any Additional Improvements, (C) any refundings of Indebtedness and (D) any capital improvements, (iv) the investment income realized on, and the income and gains realized upon the maturity or sale of, securities held by or on behalf of the City in any Funds, Accounts and subaccounts established by or pursuant to this Order, but only to the extent such income and gains as so realized are required to be deposited to some Fund, Account or subaccount other than the Revenue Fund as may be provided in this Order or in any Parity Resolution, (v) to the extent and for so long as such payments are pledged to secure the financing of the same, debt service or other payments made to the City in respect of Special Purpose Facilities, except to the extent otherwise provided by the City in respect of any such payments, 4 (vi) Net Insurance Proceeds or Net Eminent Domain Proceeds or the proceeds of any other insurance other than any use and occupancy or business interruption insurance, (vii) the proceeds of any appropriation made by any political subdivision in the State or by the State or any State agency unless the proceeds of any such appropriation are designated, in whole or in part, as Revenues by the City, (viii) the income from the investment of Qualified Escrow Funds to the extent such income is applied to the payment of the principal of or the interest on Long -Term Indebtedness which is excluded from the determination of the Long - Term Debt Service Requirement, (ix) the proceeds of any security deposits or moneys received to make refunds to users, (x) the proceeds of any Indebtedness, and (xi) payments made by the counterparty in connection with any interest rate exchange or swap agreement. For purposes of testing compliance with the rate covenant described in Section 704 and the limitations on Parity Indebtedness and Subordinated Indebtedness described in Sections 716 and 717, Revenues will be calculated based upon generally accepted accounting principles, except that such calculation will include and exclude those items specifically included and excluded above. Section 103. Rules of Construction. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words used herein shall include the plural as well as the singular number. References herein to particular articles or sections are references to articles or sections of this Series Resolution unless some other reference is indicated. ARTICLE II AUTHORIZATION, FORM, ISSUANCE, DELIVERY AND REGISTRATION OF SERIES 2008 BONDS Section 201. Authorization and Purposes of Series 2008 Bonds. (a) The City is hereby authorized to issue $30,920,000 City of Monroe Combined Enterprise System Revenue Bonds, Series 2008A, to finance the Cost of the Additional Improvements described in Exhibit A hereto, to pay the premium for the Policy, to pay the premium for the Reserve Policy and to pay certain costs and expenses incidental thereto. 5 (b) The City is hereby authorized to issue $13,095,000 City of Monroe Combined Enterprise System Revenue Bonds, Series 2008B, to finance Cost of the Additional Improvements described in Exhibit B hereto and to pay certain costs and expenses incidental thereto. (c) The Bank of New York Trust Company, N.A., Jacksonville, Florida, is hereby confirmed as Trustee under the Order. The Bank of New York Trust Company, N.A., Jacksonville, Florida, is hereby appointed Bond Registrar for the Series 2008 Bonds under this Series Resolution. Section 202. Forms of Series 2008 Bonds. The definitive Series 2008A Bonds and the Series 2008B Bonds are issuable in fully registered form in denominations of $5,000 or any whole multiple thereof, shall be lettered "R-" and shall each be numbered from 1 consecutively upward. The definitive Series 2008A Bonds and Series 2008B Bonds shall be substantially in the form set forth in Exhibit C and Exhibit D, respectively, attached hereto and made a part hereof, with such appropriate variations, omissions and insertions as are permitted or required by this Series Resolution or the Issuance, Sale and Closing Certificate. Section 203. Details of Series 2008 Bonds. (a) The Series 2008A Bonds shall be dated the date of their delivery, shall bear interest until their payment, such interest to the maturity thereof being payable on March 1, 2008, and semiannually thereafter on September 1 and March 1, in each year, all as hereinafter provided. The Series 2008A Bonds shall be issued by means of a book -entry system with no physical distribution of bond certificates to be made except as hereinafter provided. One bond certificate with respect to each date on which the Series 2008A Bonds are stated to mature, in the aggregate principal amount of the Series 2008A Bonds stated to mature on such date and registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), will be issued and required to be deposited with DTC and immobilized in its custody. The book -entry system will evidence ownership of the Series 2008A Bonds in the principal amount of $5,000 or any whole multiple thereof, with transfers of ownership effected on the records of DTC and its participants pursuant to rules and procedures established by DTC and its participants. The principal of and any redemption premium on each Series 2008A Bond and interest with respect thereto shall be payable to Cede & Co. or any other person appearing on the registration books of the City as the registered owner of such Series 2008A Bond or its registered assigns or legal representatives. Transfer of principal, interest and any redemption premium payments to participants of DTC will be the responsibility of DTC, and transfer of principal, interest and any redemption premium payments to beneficial owners of the Series 2008A Bonds by participants of DTC will be the responsibility of such participants and other nominees of such beneficial owners. The City, the Bond Registrar and the Trustee will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing records maintained by DTC, its participants or persons acting through such participants. In the event that (a) DTC determines not to continue to act as Securities Depository for the Series 2008A Bonds or (b) the City determines that continuation of the book -entry system of evidence and transfer of ownership of the Series 2008A Bonds would adversely affect the interests of the beneficial owners of the Series 2008A Bonds, the City will discontinue the book - 6 entry system with. DTC. If the City identifies another qualified Securities Depository to replace DTC, the City will make arrangements with DTC and such other Securities Depository to effect such replacement and deliver replacement bonds registered in the name of such other Securities Depository or its Securities Depository Nominee in exchange for the outstanding Series 2008A Bonds, and the references to DTC or Cede & Co. in this Series Resolution shall thereupon be deemed to mean such other Securities Depository or its Securities Depository Nominee. If the City fails to identify another qualified Securities Depository to replace DTC, the City will deliver replacement bonds in the form of fully registered certificates in the denomination of $5,000 or any whole multiple thereof in exchange for the outstanding Series 2008A Bonds as required by DTC and others. (b) The Series 2008B Bonds shall be dated the date of their delivery, shall bear interest until their payment, such interest to the maturity thereof being payable on March 1, 2008, and semiannually thereafter on September 1 and March 1, in each year, all as hereinafter provided. The Series 2008B Bonds shall be initially issued and privately placed with Banc of America Public Capital Corp. and shall be in minimum denominations of $5,000 or any whole multiple thereof. The Series 2008B Bonds may be only assigned to a bank, insurance company, or a similar financial institution or any entity approved by the Local Government Commission. Section 204. Issuance of Series 2008 Bonds; Application of Proceeds. (a) The principal amount of each maturity of the Series 2008A Bonds and the Series 2008B Bonds shall be in the amount set forth in the Issuance, Sale and Closing Certificate, subject to the limitation set forth in Section 201. (b) The Series 2008A Bonds shall bear interest at the rates, shall consist of Serial Bonds and Term Bonds and shall mature (subject to the right of prior redemption as hereinafter set forth) on March 1 in the years and amounts set forth in the Issuance, Sale and Closing Certificate; provided, however, that the effective interest cost of the Series 2008A Bonds, shall not exceed 5.50% per annum; and, provided further, that the Series 2008A Bonds shall mature on or before March 1, 2033. (c) The Series 2008B Bonds shall bear interest at a rate and shall mature (subject to the right of prior redemption) on March 1 in the year and amount set forth in the Issuance, Sale and Closing Certificate; provided, however, that the effective interest cost of the Series 2008B (Th Bonds, shall not exceed 5.50% per annum; and provided further, that the Series 2008B Bonds shall mature on or before March 1, 2028. (d) The Series 2008 Bonds shall be executed substantially in the form and in the manner herein set forth and shall be deposited with the Bond Registrar for authentication, but before the Series 2008 Bonds shall be authenticated and delivered by the Bond Registrar, there shall be filed with the Trustee the following: (i) a copy, certified by the City Clerk, of the Order and this Series Resolution; (ii) a copy, certified by the Secretary or any Deputy Secretary of the Local Government Commission, of the order and resolutions of the Local Government Commission approving the issuance of and awarding the Series 2008 Bonds; 7 (iii) an opinion of the City Attorney to the effect that (1) this Series Resolution and the Order have each been duly and validly adopted and are each valid and binding on the City in accordance with their terms, (2) no provision of the Order or this Series Resolution results in or constitutes a default under any agreement, indenture or other instrument to which the City is a party or by which the City may be bound, and of which the City has knowledge, (3) the City's adoption of the Order and this Series Resolution and execution and issuance of the Series 2008 Bonds are not subject to any authorization, consent, approval or review of any governmental body, public officer or regulatory authority not theretofore obtained or effected, and (4) the form, terms, execution, issuance and delivery of the Series 2008 Bonds have been duly and validly authorized by the City; (iv) an opinion of the City Attorney to the effect that all approvals, consents, authorizations, permits, certifications and other orders of any governmental authority, board, agency or commission having jurisdiction, or filings with any such entities, which would be necessary for the acquisition and construction of the Additional Improvements, and which are required to have been obtained or to have been filed by the date of Closing, have been obtained or filed; provided, however, with respect to those portions of the Additional Improvements which have not been started or completed by the date of Closing, such opinion may state that if such approvals, consents, authorizations, permits, certifications and other orders have not been obtained or filed by the date of Closing, the City Attorney does not anticipate any difficulty in obtaining or filing the same when applied for after the date of Closing, and with respect to such portion of the Additional Improvements as may require the acquisition of property by eminent domain, the City Attorney may state that he reasonably anticipates such property can be acquired through eminent domain proceedings; and (v) evidence of compliance with the appropriate provisions of Section 716 of the Order with respect to incurring Parity Indebtedness. (e) When the documents mentioned in subsections (i) to (v), inclusive, of subsection (d) shall have been filed with the Trustee, and when the Series 2008 Bonds shall have been executed and authenticated as required by this Series Resolution, the Series 2008 Bonds shall be delivered to or upon the order of the State Treasurer for redelivery to or upon the order of the purchasers named in the resolution mentioned in subsection (d)(ii) of this Section, but only upon the deposit with the Trustee of the purchase price of the Series 2008 Bonds. The Trustee shall be entitled to rely upon the resolutions mentioned in subsections (d)(i) and (ii) of this Section as to all matters stated therein. (f) Simultaneously with the Closing and the deposit of the net proceeds of the Series 2008 Bonds with the Trustee, the Trustee shall apply, or cause to be applied, the net proceeds (including any original issue premium or discount) as follows: (i) To the Insurer the premium amount for the Policy, which shall be derived from the net proceeds of the Series 2008A Bonds. 8 (ii) To the Reserve Policy Provider the premium for the Reserve Policy, which shall be derived from the net proceeds of the Series 2008A Bonds. (iii) The balance of the proceeds shall be deposited to the credit of the Series 2008 Subaccount of the Additional Improvements Account of the Construction Fund. The initial purchasers of the Series 2008A Bonds shall pay to the Insurer the premium amount for the Policy and to the Reserve Policy Provider the premium amount for the Reserve Policy. ARTICLE III REDEMPTION OF SERIES 2008 BONDS Section 301. Redemption of Series 2008 Bonds. (a) The Series 2008 Bonds are subject to prior redemption as provided in this Article III and in Article III of the Order. (b) Optional Redemption. The Series 2008 Bonds shall be subject to redemption at the option of the City in the manner and upon the terms set forth in the Issuance, Sale and Closing Certificate. (c) Mandatory Sinking Fund Redemption. The Series 2008A Bonds that are Term Bonds shall be subject to mandatory sinking fund redemption from moneys deposited to the credit of the Series 2008 Subaccount of the Sinking Fund Account in an amount equal to the applicable Sinking Fund Requirement as set forth in the Issuance, Sale and Closing Certificate, at a redemption price equal to 100% of the principal amount of the Series 2008A Bonds to be so redeemed plus interest accrued to the redemption date. The Series 2008B Bonds shall be subject to mandatory sinking fund redemption from moneys deposited to the credit of the Series 2008 Subaccount of the Sinking Fund Account in an amount equal to the applicable Sinking Fund Requirement as set forth in the Issuance, Sale and Closing Certificate, at a redemption price equal to 100% of the principal amount of the Series 2008B Bond to be so redeemed, plus interest accrued to the redemption date. Section 302. Selection of .Series 2008 Bonds for Redemption. The Series 2008 Bonds shall be redeemed only in whole multiples of $5,000. If less than all of the Series 2008 Bonds are called for redemption, the Series 2008 Bonds to be so redeemed shall be called for redemption in the manner set forth in an Officer's Certificate filed with the Trustee. If less than all of the Series 2008 Bonds of any one maturity are to be called for redemption the Bond Registrar shall select the Series 2008 Bonds to be redeemed by lot, each five thousand dollar ($5,000) portion of principal being counted as one Bond for this purpose; provided, however, that so long as the only Owner of the Series 2008 Bonds is a Securities Depository Nominee, such selection shall be made by the Securities Depository. Section 303. Redemption Notice for Series 2008A Bonds. At least thirty (30) days but not more than forty-five (45) days prior to the redemption date of any Series 2008A Bonds to be redeemed, whether such redemption be in whole or in part, the Bond Registrar shall cause a notice of any such redemption signed by the Bond Registrar to be mailed, first class, postage 9 prepaid, to all Owners of the Series 2008A Bonds to be redeemed in whole or in part, provided that failure to mail any such notice to any Owner or any defect in such notice shall not affect the ( validity of the proceedings for such redemption as to the Series 2008A Bonds of any other Owner to whom such notice is properly given. Each such notice shall set forth the designation, the date and Series and the CUSIP numbers of the Series 2008A Bonds to be redeemed, the date fixed for redemption, the Redemption Price to be paid, the address and phone number of the Trustee and Bond Registrar, the date of the redemption notice, the maturities of the Series 2008A Bonds to be redeemed and, if less than all of the Series 2008A Bonds of any one maturity then Outstanding shall be called for redemption, the distinctive numbers and letters, if any, of such Series 2008A Bonds to be redeemed and, in the case of Series 2008A Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. If any Bond is to be redeemed in part only, the notice of redemption shall state also that on or after the redemption date, upon surrender of such Series 2008A Bonds, a new Bond in principal amount equal to the unredeemed portion of such Bond will be issued. The Bond Registrar shall also take the following actions with respect to each such notice of redemption: (a) Not less than thirty-five (35) days prior to the redemption date, notice of such redemption shall be given by (i) registered or certified mail, postage prepaid, (ii) telephonically confirmed facsimile transmission or (iii) overnight delivery service to the following securities depository (if then in existence and accepting redemption notices) at the addresses and transmission numbers set forth below, or such other address or transmission number as may have been delivered in writing to the Bond Registrar for such purpose not later than the close of business on the day before such notice is given: The Depository Trust Company 55 Water Street, 50th Floor New York, New York 10041 Attention: Call Notification Department Telephone: (800) 654-8154 or (212) 855-7238 Facsimile: (212) 855-7232 or (7233 or 7234) E-mail: redemptionnotification@dtcc.com (b) Not less than thirty-five (35) days prior to the redemption date, notice of such redemption shall be given by (i) registered or certified mail or (ii) overnight delivery service to at least two of the following services selected by the Bond Registrar (if then in existence and accepting redemption notices): (1) Financial Information, Inc.'s Daily Called Bond Service; (2) Standard & Poor's Called Bond Service; or (3) FIS — Mergent Bond Record. 10 (c) Not less than thirty-five (35) days prior to the redemption date, notice of such redemption shall be given by first class mail, postage prepaid, to the Local Government Commission. Neither the failure to give such notice pursuant to subparagraphs (a), (b) or (c) above, nor any defect therein, shall affect the sufficiency of the proceedings for redemption. Any notice of redemption, except a notice of redemption in respect of a Sinking Fund Requirement, may state that the redemption to be effected is conditioned upon the receipt by the Trustee or Bond Registrar on or prior to the redemption date of moneys sufficient to pay the principal of and premium, if any, and interest on the Series 2008A Bonds to be redeemed and that if such moneys are not so received such notice shall be of no force or effect and such Series 2008A Bonds shall not be required to be redeemed. In the event that such notice contains such a (Th condition and moneys sufficient to pay the principal of and premium, if any, and interest on such Series 2008A Bonds are not received by the Trustee or Bond Registrar on or prior to the redemption date, the redemption shall not be made and the Bond Registrar shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received. Section 304. Redemption Notice for Series 2008B Bonds. At least thirty (30) days but not more than forty-five (45) days prior to the redemption date of the Series 2008B Bonds to be redeemed, whether such redemption be in whole or in part, the Bond Registrar shall cause a notice of any such redemption signed by the Bond Registrar to be mailed, first class, postage prepaid, to the Local Government Commission and any Owner of the Series 2008B Bonds to be redeemed in whole or in part. Each such notice shall set forth the designation, date and the certificate number of the Series 2008B Bonds to be redeemed, the date fixed for redemption, the address and phone number of the Trustee and Bond Registrar, the date of the redemption notice and, in the case of the Series 2008B Bonds being redeemed in part only, the portion of the principal thereof to be redeemed. If the Series 2008B Bonds are to be redeemed in part only, the notice of redemption shall state also that on or after the redemption date, upon surrender of such Series 2008B Bonds, a new Series 2008B Bonds in principal amount equal to the unredeemed portion of such Series 2008B Bonds will be issued. Any notice of redemption may state that the redemption to be effected is conditioned upon the receipt by the Trustee or Bond Registrar on or prior to the redemption date of moneys sufficient to pay the principal of and premium, if any, and accrued interest on the Series 2008B Bonds to be redeemed and that if such moneys are not so received such notice shall be of no force or effect and such Series 2008B Bonds shall not be required to be redeemed. In the event that such notice contains such a condition and moneys sufficient to pay the principal of and accrued interest on such Series 2008B Bond or principal installments thereof are not received by the Trustee or Bond Registrar on or prior to the redemption date, the redemption shall not be made and the Bond Registrar shall within a reasonable time thereafter give notice, in the manner (Th in which the notice of redemption was given, that such moneys were not so received. 11 ARTICLE IV ACCOUNTS, SUBACCOUNTS, REVENUES AND FUNDS Section 401. Establishment of Subaccounts and Account. The following Subaccounts and Account are hereby established: (a) Series 2008 Subaccount of the Additional Improvements Account; (b) Series 2008 Subaccount of the Interest Account; (c) Series 2008 Subaccount of the Principal Account; (d) Series 2008 Subaccount of the Redemption Account; (e) Series 2008 Subaccount of the Sinking Fund Account; (f) City of Monroe Combined Enterprise System Special Reserve Account, Series 2008A. The subaccounts and Special Reserve Account mentioned above shall be established with and held by the Trustee pursuant to the Order and this Series Resolution. Section 402. Revenues Received by the City. The City shall, subject to the provisions of the Order, deposit or cause to be deposited, from Net Revenues held in the Revenue Fund, with the Trustee the following amounts, and the Trustee shall apply such amounts to the various Accounts and subaccounts specified herein in the following manner and order: (a) on or before the twenty-fifth (25th) day of the month preceding each March 1 and September 1, commencing March 1, 2008, into the Series 2008 Subaccount of the Interest Account, such amounts as shall be sufficient to make full and timely payments of the interest payable on the Series 2008 Bonds on the next ensuing Interest Payment Date; (b) on or before the twenty-fifth (25th) day of the month preceding each March 1, into the Series 2008 Subaccount of the Principal Account, beginning on the date set forth in the Issuance, Sale and Closing Certificate, such amounts as shall be sufficient to make full and timely payments of the principal of all Serial Bonds due on the next ensuing March 1; (c) on or before the twenty-fifth (25th) day of the month preceding each March 1, into the Series 2008 Subaccount of the Sinking Fund Account, beginning on the date set forth in the Issuance, Sale and Closing Certificate and the Series 2008B Bonds, the amounts that are required to retire the Term Bonds to be called by mandatory redemption or to be paid at maturity on the next ensuing March 1, in accordance with the Sinking Fund Requirement therefor; and (d) beginning on the 25th day of the month following the submission of a "Demand for Payment," in the form attached to the Reserve Policy, and the payment with respect thereto by the Reserve Policy Provider, into the Special Reserve Account the amount required to be deposited therein to replenish the amounts so withdrawn under the Reserve Policy, in accordance with the provisions of Section 404 hereof. In the month following a month in which the City shall have failed to make any deposit required by this Section 402, the City shall deposit, in addition to the amounts then due, but only from Net Revenues, an amount sufficient to cure any deficiency in deposit unless such deficiency shall have been cured. Section 403. Application of Money in the Series 2008 Subaccount of the Sinking Fund Account. Money held in the Series 2008 Subaccount of the Sinking Fund Account shall be applied during each Bond Year to the purchase or retirement of Term Bonds then Outstanding as follows: (a) The Trustee shall, at the request of the City, endeavor to purchase and cancel Term Bonds or portions thereof subject to redemption by operation of the Series 2008 Subaccount of the Sinking Fund Account or maturing on the next ensuing March 1 at the most advantageous price obtainable with reasonable diligence. The purchase price of each such Term Bond shall not exceed par plus accrued interest to the date of purchase. The Trustee shall pay the interest accrued on such Term Bonds to the date of settlement therefor from the Series 2008 Subaccount of the Interest Account or other available funds of the City and the purchase price from the Series 2008 Subaccount of the Sinking Fund Account, but no such purchase shall be made by the Trustee from money in the Series 2008 Subaccount of the Sinking Fund Account within the period of forty-five (45) days immediately preceding any March 1 on which such Term Bonds are subject to redemption. The aggregate purchase price of Term Bonds during such Bond Year shall not exceed the amount deposited in the Series 2008 Subaccount of the Sinking Fund Account on account of the Sinking Fund Requirement for the Term Bonds for such Bond Year. If in any Bond Year the sum of the amount on deposit in the Series 2008 Subaccount of the Sinking Fund Account for the payment of any Term Bonds and the principal amount of the Term Bonds that were purchased during such Bond Year pursuant to the provisions of this paragraph (a) or delivered during such Bond Year to the Trustee by the City exceeds the Sinking Fund Requirement for the Outstanding Term Bonds for such Bond Year, the Trustee shall endeavor to purchase Outstanding Term Bonds with such excess money; (b) The Trustee shall call for redemption on the March 1 immediately following the then current Bond Year the Term Bonds then subject to redemption in a principal amount equal to the aggregate Sinking Fund Requirement for the Term Bonds for such Bond Year, less the principal amount of any such Term Bonds retired during such Bond Year by purchase pursuant to paragraph (a) of this Section or delivered during such Bond Year to the Trustee by the City. If the amount available in the Series 2008 Subaccount of the Sinking Fund Account on such March 1 is not equal to the Sinking Fund Requirement for the Term Bonds for such Bond Year less the principal amount of any such Term Bonds so delivered or purchased and retired, the Trustee shall apply the 13 amount available in the Series 2008 Subaccount of the Sinking Fund Account to the redemption of Term Bonds then subject to redemption so as to exhaust, to the extent practicable, the amount available. On each redemption date the Trustee shall withdraw from the Series 2008 Subaccount of the Sinking Fund Account the amount required to pay the Redemption Price of the Term Bonds so called for redemption. The amount of interest on the Term Bonds so called for redemption shall be paid from the Series 2008 Subaccount of the Interest Account. If such date is the stated maturity date of any such Term Bonds, the Trustee shall not call such Term Bonds for redemption but, on such maturity, shall withdraw the amount required for paying the principal of such Term Bonds when due and payable. If on any date there is money in the Series 2008 Subaccount of the Sinking Fund Account fl and no Term Bonds are then Outstanding or if on any payment date money remains therein after the mandatory redemption of Term Bonds in accordance with the Sinking Fund Requirement therefor, the Trustee shall withdraw such money therefrom and shall apply the same as follows and in the following order: (a) deposit in the Series 2008 Subaccount of the Interest Account, the Series 2008 Subaccount of the Principal Account and the Special Reserve Account, the amounts, if any, required to be paid thereto in such month and (b) deposit all remaining amounts to the Revenue Fund. If the balance in the Series 2008 Subaccount of the Sinking Fund Account on the fifth Business Day preceding the March 1 upon which Term Bonds are to mature or to be redeemed in accordance with the Sinking Fund Requirement therefor is insufficient to satisfy such Sinking Fund Requirement, the Trustee shall transfer to the Series 2008 Subaccount of the Sinking Fund Account such amounts as may be necessary to remedy the deficiency, drawing upon the Special Reserve Account, all in accordance with the provisions of Section 508(c) of the Order. If, in any Bond Year, by the application of money in the Series 2008 Subaccount of the Sinking Fund Account, the Trustee should purchase or receive from the City and cancel Term Bonds in excess of the aggregate Sinking Fund Requirement for such Bond Year, the Trustee shall file with the City not later than the twentieth (20th) day prior to the next March 1 on which Term Bonds are to be redeemed, a statement identifying the Term Bonds purchased or delivered during such Bond Year and the amount of such excess. The City shall thereafter cause an Officer's Certificate to be filed with the Trustee not later than February 15 of the following Bond Year setting forth with respect to the amount of such excess the Bond Years in which the Sinking Fund Requirements with respect to Term Bonds are to be reduced and the amount by which the Sinking Fund Requirements so determined are to be reduced. Upon the retirement of any Term Bonds by purchase and redemption pursuant to the provisions of this Section, the Trustee shall file with the City a statement identifying such Bonds and setting forth the date of purchase or redemption, the amount of the purchase price or the Redemption Price of such Term Bonds, and the amount paid as interest thereon. The expenses incurred in connection with the purchase or redemption of any such Term Bonds shall be paid by the City from the Revenue Fund or from any other legally available moneys. Section 404. Application of Money in the Special Reserve Account; Remedy of Deficiency. (a) In connection with the issuance and sale of the Series 2008A Bonds, the City 14 shall cause the Reserve Policy Provider to deliver the Reserve Policy to the Trustee for deposit in the Special Reserve Account. The Reserve Policy shall secure only the Series 2008A Bonds. If the Trustee is required to make transfers in respect of the Series 2008A Bonds from the Special Reserve Account to the appropriate subaccounts in the Interest Account, the Principal Account or the Sinking Fund Account to remedy any •deficiency therein with respect to the Series 2008A Bonds, the Trustee shall submit the Demand for Payment to the Reserve Policy Provider demanding payment in the amount (not to exceed the. amount available to be drawn under the Reserve Policy) of the shortfall required to be transferred from the Special Reserve Account, such Demand for Payment to be delivered to the Reserve Policy Provider at least three (3) days prior to the date on which such funds are required. The Trustee shall demand payment under the Reserve Policy as often as shall be required to comply with the provisions of this Section. (b) Beginning on the 25th day of the month following the submission to the Reserve Policy Provider of a Demand for Payment and the payment with respect thereto by the Reserve Policy Provider, and continuing on the 25th day of each month until the Reserve Policy has been reinstated to its full amount, the City shall withdraw from the Revenue Fund, following the transfers described in (a) and (b) of Section 504 of the Order and subject to the provisions of Section 504(c) of the Order, an amount equal to one -twelfth (1/12th) of the amount required to replenish the amount withdrawn from the Reserve Policy. Section 405. Application of Money in the Series 2008 Subaccount of the Redemption Account. The Trustee shall apply money in the Series 2008 Subaccount of the Redemption Account to the purchase or redemption of Series 2008 Bonds as follows: (a) Subject to the provisions of paragraph (c) of this Section, the Trustee shall endeavor to purchase and cancel Series 2008 Bonds or portions thereof, regardless of whether such Bonds or portions thereof are then subject to redemption, at the most advantageous price obtainable with reasonable diligence, provided that the purchase price of each Bond shall not exceed the Redemption Price that would be payable on the next redemption date to the Owner of such Series 2008 Bonds under the provisions of this Series Resolution. The Trustee shall pay the interest accrued on such Bonds or portions thereof to the date of settlement from the Series 2008 Subaccount of the Interest Account or other available funds of the City and the purchase price from the Series 2008 Subaccount of the Redemption Account, but no such purchase shall be made by the Trustee from money in the Series 2008 Subaccount of the Redemption Account within the period of forty-five (45) days immediately preceding any date on which such Series 2008 Bonds or portions thereof are to be redeemed. (b) Subject to the provisions of paragraph (c) of this Section, the Trustee shall call for redemption on a date permitted by this Series Resolution such amount of Series 2008 Bonds or portions thereof as, with the redemption premium, if any, will exhaust the money then held in the Series 2008 Subaccount of the Redemption Account as nearly as may be practicable; provided, however, that not less than Fifty Thousand Dollars ($50,000) in principal amount of the Series 2008 Bonds shall be called for redemption at any one time unless the Trustee is so instructed by the City. The Trustee shall pay the accrued interest on the Series 2008 Bonds or portions thereof to be redeemed to the date of redemption from the Series 2008 Subaccount of the Interest Account and the 15 Redemption Price of such Bonds or portions thereof from the Series 2008 Subaccount of the Redemption Account. The Trustee shall withdraw from the Series 2008 Subaccount of the Redemption Account and set aside the respective amounts required to pay the Redemption Price of the Series 2008 Bonds or portions thereof so called for redemption. (c) Money in the Series 2008 Subaccount of the Redemption Account shall be applied by the Trustee in each Fiscal Year to the purchase or the redemption of Series 2008 Bonds then Outstanding in accordance with the latest Officer's Certificate filed with the Trustee designating the Series 2008 Bonds to be redeemed, and if such Series 2008 Bonds are Term Bonds, the years in which future Sinking Fund Requirements are to be reduced as a result of such redemption and the amount of such reduction in each such year. In the event no such certificate is filed (i) the Trustee shall apply such money to the purchase of Series 2008 Bonds bearing the highest rate of interest, (ii) if Series 2008 Bonds of more than one maturity bear the same interest rate, the Trustee shall redeem such Series 2008 Bonds in the inverse order of maturities, and (iii) if the Series 2008 Bonds bearing the highest rate of interest are Term Bonds, the Trustee shall reduce Sinking Fund Requirements for such Term Bonds in inverse order of the scheduled redemption of such Term Bonds. Upon the retirement of any Series 2008 Bonds by purchase or redemption, pursuant to the provisions of this Section, the Trustee shall file with the City a statement identifying such Series 2008 Bonds and setting forth the date of purchase or redemption, the amount of the purchase price or the Redemption Price of such Bonds and the amount paid as interest thereon. The expenses incurred by the Trustee in connection with the purchase or redemption of any such Series 2008 Bonds shall be paid by the City from the Revenue Fund or from any other available moneys. Section 406. Investment of Money. Money held for the credit of all Accounts and subaccounts established hereunder on deposit with the Trustee shall be continuously invested and reinvested by the Trustee in Investment Obligations to the extent practicable. Any such Investment Obligations shall mature not later than the respective dates when the money held for the credit of such subaccounts will be required for the purposes intended. No Investment Obligations in any such subaccount may mature beyond the latest maturity date of any Series 2008 Bonds Outstanding at the time such Investment Obligations are deposited. Investment Obligations acquired with money in or credited to any Account or subaccount established hereunder shall be deemed at all times to be part of such Account or subaccount. Any loss realized upon the disposition or maturity of such Investment Obligations shall be charged against such Account or subaccount. The interest accruing on any such Investment Obligations and any profit realized upon the disposition or maturity of such Investment Obligations shall be credited to such Accounts or subaccounts as follows: Accounts or subaccounts Credited to Series 2008 Subaccount of the Additional Series 2008 Subaccount of the Additional Improvements Account of the Construction Improvements Account of the Construction Fund Fund 16 n n Special Reserve Account Series 2008 Subaccounts of the Interest Account and the Principal Account All other Accounts and subaccounts Series 2008 Subaccount of the Additional Improvements Account of the Construction Fund until completion of the Additional Improvements and thereafter to the Series 2008 Subaccount of the Interest Account Series 2008 Subaccount of the Interest Account Revenue Fund Any such interest accruing and any such profit realized shall be transferred upon the receipt thereof by the City or the Trustee, as the case may be, pursuant to the provisions of the Order and this Series Resolution. An Authorized Officer shall give to the Trustee written directions respecting the investment of any money required to be invested hereunder, subject, however, to the provisions of this Section 406, and the Trustee shall then invest such money as so directed. The Trustee may request in writing additional direction or authorization from the Authorized Officer with respect to the proposed investment of money. Upon receipt of such directions, the Trustee shall invest, subject to the provisions of this Section 406, such money in accordance with such directions. The Trustee shall, acting in a commercially reasonable manner, sell at the best price obtainable or reduce to cash a sufficient amount of such Investment Obligations whenever it is necessary to do so in order to provide money to make any payment from any such subaccount. Whenever a transfer of money between two or more of the subaccounts is permitted or required, such transfer may be made as a whole or value determined at the time of such transfer in accordance with Article VI of the Order, provided that the Investment Obligations transferred are those in which money of the receiving subaccount could be invested at the date of such transfer. Section 407. Payment of Principal, Interest and Premium and Pledge of Net Revenues. The City covenants that it will promptly pay the principal of and the interest on every Series 2008 Bond issued under the provisions of this Series Resolution at the places, on the dates and in the manner provided herein and in said Series 2008 Bonds, and any premium required for the retirement of said Series 2008 Bonds by purchase or redemption, according to the true intent and meaning thereof. The City further covenants that it will faithfully perform at all times all of its covenants, undertakings and agreements contained in this Series Resolution, the Refunding Bond Order and the Order, or in any Series 2008 Bond executed, authenticated and delivered hereunder or in any proceedings of the City pertaining thereto. The City represents and covenants that it is duly authorized under the Constitution and laws of the State to issue the Series 2008 Bonds and to pledge the Net Revenues in the manner and to the extent herein and in the Order and the Series Resolution set forth; that all action on its part for the issuance of the Series 2008 Bonds has been duly and effectively taken; that such Series 2008 Bonds in the hands 17 of the Owners thereof are and will be valid and binding special obligations of the City payable according to their terms. Section 408. Tax Covenant. The City covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion of interest paid on the Series 2008 Bonds from gross income of the Owners thereof for federal income tax purposes. ARTICLE V THE TRUSTEE Section 501. Confirmation of Duties by Trustee. The Trustee shall confirm its { acceptance of the duties and obligations imposed upon it by this Series Resolution by delivery to the City of its written confirmation thereof. ARTICLE VI SUPPLEMENTAL SERIES RESOLUTIONS Section 601. Modification of Series Resolutions without Consent of Owners. The City may, from time to time and at any time, adopt such resolutions supplemental hereto (which supplemental resolution shall thereafter form a part hereof) as shall be substantially consistent with the terms and provisions of this Series Resolution and, in the opinion of the Trustee, who may rely upon a written opinion of legal counsel, shall not materially and adversely affect the interest of the Owners: (a) to cure any ambiguity or formal defect or omission, to correct or supplement any provision herein that may be inconsistent with any other provision herein, to make any other provisions with respect to matters or questions arising under this Series Resolution or to modify, alter, amend, add to or rescind, in any particular, any of the terms or provisions contained in this Series Resolution, or (b) to grant or to confer upon the Trustee for the benefit of the Owners any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Owners or the Trustee, or (c) to add to the covenants and agreements of the City in this Series Resolution other covenants and agreements thereafter to be observed by the City or to surrender any right or power herein reserved to or conferred upon the City, or (d) to permit the qualification of this Series Resolution under any federal statute now or hereafter in effect or under any state Blue Sky law, and, in connection therewith, if the City so determines, to add to this Series Resolution or any supplemental Series Resolution such other terms, conditions and provisions as may be permitted or required by such federal statute or Blue Sky law, or 18 (e) to adopt such other resolutions supplemental hereto as shall not materially and adversely affect the interest of the Owners. Section 602. Modification of Series .Resolution with Consent of Owners. Subject to the terms and provisions contained in this Section, and not otherwise, the Owners of not less than a majority in aggregate principal amount of the Series 2008 Bonds then Outstanding that will be affected, as defined in Section 603, by a proposed supplemental series resolution shall have the right, from time to time, anything contained in this Series Resolution to the contrary notwithstanding, to consent to and approve the adoption by the City and the acceptance by the Trustee of such series resolution supplemental hereto as shall be deemed necessary or desirable by the City for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Series Resolution or in any supplemental series resolution; provided, however, that nothing herein contained shall permit, or be construed as permitting (a) an extension of the maturity of the principal of or the interest on. any Series 2008 Bond, (b) a reduction in the principal amount of any Series 2008 Bond or the redemption premium or the rate of interest thereon, or (c) the creation of a pledge of Net Revenues other than the lien and pledge created by the Order or this Series Resolution, or (d) a preference or priority of any Series 2008 Bond over any other Series 2008 Bond, or (e) a reduction in the aggregate principal amount of Series 2008 Bonds required for consent to such supplemental series .resolution. Nothing herein contained, however, shall be construed as making necessary the approval by the Owners of the adoption and acceptance of any supplemental series resolution as authorized in Section 601. The Trustee shall, at the expense of the City, such expense to be paid from the Revenue Fund or from any other available moneys, cause notice of the proposed adoption of such supplemental series resolution to be mailed, postage prepaid, to the Local Government Commission and all Owners. Such notice shall briefly set forth the nature of the proposed supplemental series resolution and shall state that copies thereof are on file at the principal office of the Trustee for inspection by all Owners. The Trustee shall not, however, be subject to any liability to any Owner by reason of its failure to mail the notice required by this Section, and any such failure shall not affect the validity of such supplemental series resolution when approved and consented to as provided in this Section. Whenever, atany time within one year after the date of the mailing of such notice, the City shall deliver to the Trustee an instrument or instruments in writing purporting to be executed by the Owners of not less than a majority in aggregate principal amount of Series 2008 Bonds then Outstanding that are affected, as defined in Section 603, by a proposed supplemental series resolution, which instrument or instruments shall refer to the proposed supplemental series resolution described in such notice and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such notice, thereupon, but not otherwise, the City may adopt such supplemental series resolution in substantially such form, without liability or responsibility to any Owner, whether or not such Owner shall have consented thereto. If the Owners of not less than a majority in aggregate principal amount of the Series 2008 Bonds Outstanding at the time of the adoption of such supplemental series resolution and that are affected, as defined in Section 603, by a proposed supplemental series resolution have consented 19 to and approved the adoption thereof as herein provided, to the extent permitted by law, no Owner shall have any right to object to the adoption of such supplemental series resolution, to object to any of the terms and provisions contained therein or the operation thereof, to question the propriety of the adoption thereof, or enjoin or restrain the City from adopting the same or from taking any action pursuant to the provisions thereof. Upon the adoption of any supplemental series resolution pursuant to the provisions of this Section or Section 601, this Series Resolution shall be and be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Series Resolution of the City, the Trustee and all Owners shall thereafter be determined, exercised and enforced in all respects pursuant to the provisions of this Series Resolution as so modified and amended. Section 603. Series 2008 Bonds Affected. For purposes of this Series Resolution, Series 2008 Bonds shall be deemed to be "affected" by a supplemental series resolution if the same adversely affects or diminishes the rights of Owners against the City or the rights of the Owners in the security for such Series 2008 Bonds. The Trustee may in its discretion determine whether any Series 2008 Bonds would be affected by any supplemental series resolution and any such determination shall be conclusive upon the Owners of all Series 2008 Bonds, whether theretofore or thereafter authenticated and delivered hereunder. The Trustee shall not be liable for any such determination made in good faith. Notwithstanding the foregoing provisions of this Article VI, any modification of this Series Resolution that affects the Series 2008B Bonds exclusively shall require the prior written consent of any holder of the Series 2008B Bonds. Section 604. Exclusion of Series 2008 Bonds. Series 2008 Bonds owned or held by or for the account of the City shall not be deemed Outstanding Bonds for the purpose of any consent or other action or any calculation of Outstanding Series 2008 Bonds provided for in this Article, and the City as Owner of such Series 2008 Bonds shall not be entitled to consent or take any other action provided for in this Article. At the time of any consent or other action taken under this Article, the City shall furnish the Trustee an Officer's Certificate upon which the Trustee may rely, describing all Series 2008 Bonds so to be excluded. Section 605. Responsibilities of Trustee and City under this Article. The Trustee and the City shall be entitled to exercise their discretion in determining whether or not any proposed supplemental series resolution or any term or provision therein contained is desirable, after considering the purposes of such instrument, the needs of the City, the rights and interests of the Owners, and the rights, obligations and interests of the Trustee. The Trustee shall be entitled to receive, and shall be fully protected in relying upon, the opinion of counsel approved by it, who may be bond counsel for the City, as conclusive evidence that any such proposed supplemental series resolution does or does not comply with the provisions of this Series Resolution, and that it is or is not proper for it, under the provisions of this Article, to accept such supplemental series resolution. 20 ARTICLE VII DEFEASANCE Section 701. Release of Series Resolution. When (a) the Series 2008 Bonds secured hereby shall have become due and payable in accordance with their terms or otherwise as provided in this Series Resolution, and the whole amount of the principal and the interest and premium, if any, so due and payable upon all Series 2008 Bonds shall be paid, and (b) if the Series 2008 Bonds shall not have become due and payable in accordance with their terms, the Trustee or the Bond Registrar shall hold, sufficient (i) money or (ii) Defeasance Obligations or a combination of (i) and (ii) of this clause (b), the principal of and the interest on which, when due and payable, will provide sufficient money to pay the principal of, and the interest and redemption premium, if any, on all Series 2008 Bonds then Outstanding to the maturity date or dates of such Series 2008 Bonds or to the date or dates specified for the redemption thereof, as verified by an independent certified public accountant or other nationally recognized arbitrage rebate consultant acceptable to the Trustee, and (c) if Series 2008 Bonds are to be called for redemption, irrevocable instructions to call the Series 2008 Bonds for redemption shall have been given by the City to the Trustee, and (d) sufficient funds shall also have been provided or provision made for paying all other obligations payable hereunder by the City, then and in that case the right, title and interest of the Trustee in the Funds, Accounts and subaccounts mentioned in this Series Resolution shall thereupon cease, determine and become void and, upon being furnished with an opinion, in form and substance satisfactory to the Trustee, of counsel approved by the Trustee, to the effect that all conditions precedent to the release of this Series Resolution have been satisfied, the City shall repeal and cancel this Series Resolution and shall execute such documents to evidence such cancellation as may be required by such counsel and the Trustee shall turn over to the City any surplus in, and all balances remaining in, all Funds, Accounts and subaccounts other than money held for the redemption or payment of Series 2008 Bonds. Otherwise, this Series Resolution shall be, continue and remain in full force and effect; provided, that, in the event Defeasance Obligations shall be deposited with and held by the Trustee or the Bond Registrar as hereinabove provided, (i) in addition to the requirements set forth in Article III, the Trustee, within thirty (30) days after such Defeasance Obligations shall have been deposited with it, shall cause a notice signed by the Trustee to be mailed, postage prepaid, to all Owners of Series 2008 Bonds, setting forth (a) the date or dates, if any, designated for the redemption of the Series 2008 Bonds, (b) a description of the Defeasance Obligations so held by it, and (c) that this Series Resolution has been repealed and canceled in n accordance with the provisions of this Section, and (ii) (a) the Trustee shall nevertheless retain such rights, powers and privileges under the Order and this Series Resolution as may be necessary and convenient in respect of the Series 2008 Bonds for the payment of the principal, 21 interest and any premium for which such Defeasance Obligations have been deposited and (b) the Bond Registrar shall retain such rights, powers and privileges under the Order and this Series Resolution as may be necessary and convenient for the registration, transfer and exchange of Series 2008 Bonds; provided, however, that failure to mail such notice to any Owner or to the Owners or any defect in such notice so mailed shall not affect the validity of the proceedings for the repeal and cancellation of this Series Resolution. All money and Defeasance Obligations held by the Trustee (or the Bond Registrar) pursuant to this Section shall be held in trust and applied to the payment, when due, of the obligations payable therewith. Notwithstanding the foregoing provisions of this Article VII, if the principal and/or (Th interest due on the Series 2008A Bonds shall be paid by the Insurer pursuant to the Policy, the Series 2008A Bonds shall remain outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the City, and the assignment and pledge of the Net Revenues to the Owners shall continue to exist and shall run to the benefit of the Insurer, and the Insurer shall be subrogated to the rights of such Owners including, without limitation, any rights that such Owners may have in respect of securities law violations arising from the offer and sale of the Series 2008A Bonds. The Series 2008A Bonds and the Series 2008B Bonds may be paid in full separately in accordance with this Article VII. ARTICLE VIII THE POLICY Section 801. Payment Procedure Under the Policy. (a) At least two (2) Business Days prior to each Interest Payment Date on the Series 2008A Bonds, the Trustee shall determine whether there will be sufficient funds to pay all of the principal of and interest on the Series 2008A Bonds then due on such Interest Payment Date and shall immediately notify the Insurer or its designee on the same Business Day by telephone or electronic mail, confirmed in writing by registered or certified mail, of the amount of any deficiency. Such notice shall specify the amount of the anticipated deficiency, the Series 2008A Bonds to which such deficiency is (Th applicable and whether such Series 2008A Bonds will be deficient as to principal or interest or both. If the deficiency is made up in whole or in part prior to or on the Interest Payment Date, the Trustee shall so notify the Insurer or its designee. (b) The Trustee, shall after giving notice to the Insurer as provided in (a) above, make available to the Insurer and, at the Insurer's direction, to its designee, the registration books of the City maintained by the Trustee and all records relating to the funds and accounts maintained under the Order and the Series Resolution. (c) The Trustee shall provide the Insurer and any designee thereof with a list of the Owners of the Series 2008A Bonds entitled to receive principal or interest payments from the Insurer under the terms of the Policy, and shall make arrangements with the Insurer or another designee of the Insurer to (i) mail checks or drafts to the Owners of Series 2008A Bonds entitled 22 to receive full or partial interest payments from the Insurer and (ii) pay principal upon Series 2008A Bonds surrendered to the Insurer or another designee of the Insurer by the Owners of Series 2008A Bonds entitled to receive full or partial principal payments from the Insurer. (d) The Trustee shall, at the time it provides notice to the Insurer of any deficiency pursuant to subsection (a) above, notify the Owners of the Series 2008A Bonds entitled to receive the payment of principal or interest thereon from the Insurer (i) as to such deficiency and its entitlement to receive principal or interest, as applicable, (ii) that the Insurer will remit to them all or a part of the interest payments due on the related Interest Payment Date upon proof of its entitlement thereto and delivery to the Insurer or any designee thereof, in form satisfactory to the Insurer, of an appropriate assignment of the registered owner's right to payment, (iii) that, if they are entitled to receive partial payment of principal from the Insurer, they must surrender the fl related Series 2008A Bonds for payment first to the Trustee, which will note on such Series 2008A Bonds the portion of the principal paid by the Trustee and second to the Insurer or its designee, together with the an appropriate assignment, in form satisfactory to the Insurer, to permit ownership of such Series 2008A Bonds to be registered in the name of the Insurer, which will then pay the unpaid portion of principal, and (iv) that, if they are entitled to receive full payment of principal from the Insurer, they must surrender the related Series 2008A Bonds for payment to the Insurer or its designee, rather than the Trustee, -together with the an appropriate assignment, in form satisfactory to the Insurer, to permit ownership of such Series 2008A Bonds to be registered in the name of the Insurer. (e) In addition, if the Trustee has notice that any Owners of the Series 2008A Bonds has been required to disgorge payments of principal or interest on the Series 2008A Bonds previously Due for Payment (as such term is defined in the Policy) pursuant to a final non - appealable order by a court of competent jurisdiction that such payment constitutes an avoidable preference to such Owners within the meaning of any applicable bankruptcy laws, then the Trustee shall notify the Insurer or its designee of such fact by telephone or electronic notice, confirmed in writing by registered or certified mail. (f) The Trustee is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Owners of the Series 2008A Bonds as follows: (i) If and to the extent there is a deficiency in amounts required to pay interest on the Series 2008A Bonds, the Trustee shall (A) execute and deliver to Insurer, in form satisfactory to the Insurer, an instrument appointing the Insurer as agent for such Owners in any legal proceeding related to the payment of such interest and an assignment to the Insurer of the claims for interest to which such deficiency relates and which are paid by the Insurer, (B) receive as designee of the respective Owners (and not as Trustee) in accordance with the tenor of the Policy payment from the Insurer with respect to the claims for interest so assigned, and (C) disburse the same to such respective Owners; and (ii) If and to the extent of a deficiency in amounts required to pay principal of the Series 2008A Bonds, the Trustee shall (A) execute and deliver to the Insurer, in form satisfactory to Insurer, an instrument appointing the Insurer as agent for such Owners in any legal proceeding related to the payment of such principal and an assignment to Insurer of the Series 2008A Bond surrendered to the Insurer in an amount equal to the 23 principal amount thereof as has not previously been paid or for which moneys are not held by the Trustee and available for such payment (but such assignment shall be delivered only if payment from Insurer is received), (B) receive as designee of the respective Owners (and not as Trustee) in accordance with the tenor of the Policy payment therefore from the Insurer, and (C) disburse the same to such Owners. (g) Payments with respect to claims for interest on and principal of the Series 2008A Bonds disbursed by the Trustee from proceeds of the Policy shall not be considered to discharge the obligation of the City with respect to such Series 2008A Bonds, and such Series 2008A Bonds shall remain outstanding for all purposes. (h) Irrespective of whether any such assignment is executed and delivered: (i) to the extent the Insurer makes payments directly or indirectly (e.g., by paying through the Trustee), on account of principal of or interest on the Series 2008A Bonds, the Insurer will be subrogated to the rights of such Owners to receive the amount of such principal and interest from the City, with interest thereon as provided and solely from the sources stated in the Order, this Series Resolution and the Series 2008A Bonds; and (ii) the City shall pay to the Insurer the amount of such principal and interest, with interest thereon as provided in the Order, this Series Resolution and the Series 2008A Bonds, but only from the sources and in the manner provided herein and therein for the payment of principal of and interest on the Series 2008A Bonds to Owners, and will otherwise treat the Insurer as the owner of such rights to the amount of such principal and interest. (i) The City shall pay or reimburse the Insurer, to the extent permitted by law, (A) for all amounts paid by Insurer under the terms of the Policy, and (B) any and all charges, fees, costs and expenses which the Insurer may reasonably pay or incur, including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, in connection with (i) any accounts established to facilitate payments under the Policy, (ii) the administration, enforcement, defense or preservation of any rights in respect of the Order or this Series Resolution including defending, monitoring or participating in any litigation or proceeding (including any bankruptcy proceeding in respect of the City or any affiliate thereof) relating to this Series Resolution or any other document contemplated by the Order and this Series Resolution, (iii) the application of the Net Revenues securing any Series 2008A Bonds under the Order or this Series Resolution, or the pursuit of any remedies under the Order or this Series Resolution, to the extent such costs and expenses are not recovered from such application, or (iv) any amendment, waiver or other action with respect to, or related to, the Order or this Series Resolution; costs and expenses shall include a reasonable allocation of compensation and overhead attributable to time of employees of the Insurer spent in connection with the actions described in clauses (ii) - (iv) immediately above. In addition, the Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the Order or this Series Resolution. The City shall pay interest on the amounts owed under this subsection (i) from the date of any payment due or paid, at the per annum rate of interest publicly announced from time to time by JP Morgan Chase Bank, 24 National Association at its principal office in New York, New York as its prime lending rate (any change in such prime rate of interest to be effective on the date such change is announced by JPMorgan Chase Bank, National Association) plus three percent (3%) per annum (the "Reimbursement Rate"). The Reimbursement Rate shall be calculated on the basis of the actual number of days elapsed over a 360 -day year. In the event JPMorgan Chase Bank ceases to announce its prime rate publicly, the prime rate shall be the publicly announced prime rate or base lending rate of such national bank, as the Insurer shall specify. (j) In addition to any and all rights of reimbursement, subrogation and any other rights pursuant hereto or under law or in equity, the City shall pay or reimburse the Insurer, to the extent permitted by law, any and all charges, fees, costs, claims, losses, liabilities (including penalties), judgments, demands, damages, and expenses which Insurer or its officers, directors, shareholders, employees, agents and each Person, if any, who controls the Insurer within the meaning of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended, may reasonably pay or incur, including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, of any nature in connection with, in respect of or relating to the transactions contemplated by the Order or this Series Resolution by reason of: (i) any omission or action (other than of or by Insurer) in connection with the offering, issuance, sale or delivery of the Series 2008A Bonds; (ii) the negligence, bad faith, willful misconduct, misfeasance, malfeasance or theft committed by any director, officer, employee or agent of the City in connection with any transaction arising from or relating to the Order or this Series Resolution; (iii) the violation by the City of any law, rule or regulation, or any judgment, order or decree applicable to it; (iv) the breach by the City of any representation, warranty or covenant under the Order or this Series Resolution or the occurrence, in respect of the City, under the Order or this Series Resolution of any "Event of Default" or any event which, with the giving of notice or lapse of time or both, would constitute any "Event of Default"; or (v) any untrue statement or alleged untrue statement of a material fact contained in the Official Statement relating to the Series 2008A Bonds, if any, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such claims arise out of or are based upon any untrue statement or omission in information included in an official statement, if any, and furnished by Insurer in writing expressly for use therein. (k) The Insurer shall be entitled to pay principal or interest on the Series 2008A Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the City (as such terms are defined in the Policy) and any amounts due on the Series 2008A Bonds as a result of acceleration of the maturity thereof in accordance with the Order, whether or not 25 the Insurer has received a Notice (as defined in the Policy) of Nonpayment or a claim upon the Policy. (1) In addition, the Insurer shall to the extent it makes any payment of principal or interest on the Series 2008A Bonds become subrogated to the rights of the recipients of such payments in accordance with the terms of the Policy, and to evidence such subrogation (i) in the case of claims for interest, the Trustee shall note the Insurer's rights as subrogee on the registration books of the City maintained by the Trustee, upon receipt of proof of payment of interest thereon to the registered Owners of the Series 2008A Bonds, and (ii) in the case of claims for principal, the Trustee, if any, shall not Insurer's rights as subrogee on the registration books of the City maintained by the Trustee, upon surrender of the Series 2008A Bonds together with receipt of proof of payment of principal thereof. Section 802. Miscellaneous Insurance Provisions. (a) Any notice that is required to be given to the beneficial owners of the Series 2008A Bonds, nationally recognized municipal securities information repositories or state information depositories pursuant to Rule 15c2 -12(b) (5) adopted by the Securities and Exchange Commission or to the Trustee, shall also be provided to the Insurer, simultaneously with the sending of such notices. In addition, to the extent that the City has undertaken to provide continuing disclosure with respect to the Series 2008A Bonds, all information furnished pursuant to such undertaking shall also be provided to the Insurer, simultaneously with the furnishing of such information. All notices required to be given to the Insurer shall be in writing and shall be sent by registered or certified mail addressed to the Insurer Corp., 1325 Avenue of the Americas, New York, New York 10019, Attention: General Counsel, with a copy to the Insurer, Attention: Risk Management Department — Public Finance Surveillance. (b) The City shall, at the reasonable request of the Insurer, discuss the affairs, finances and accounts of the City or any information with the Insurer related to the security for the Series 2008A Bonds, and shall use its best efforts to enable the Insurer to have access to the Combined Enterprise System, books and records of the City on any business day upon reasonable prior notice. (c) The Trustee shall notify Insurer of any failure of the City to provide notices, certificates and other information under this Series Resolution. (d) Insurer shall receive prior written notice of any name change of the Trustee or the removal, resignation or termination of the Trustee. No removal, resignation or termination of the Trustee shall take effect until a successor, acceptable to the Insurer, shall be appointed. (e) With respect to amendments or supplements to the Order or this Series Resolution that do not require the consent of the Owners, the Insurer shall be given notice of any such amendments or supplements. With respect to amendments or supplements to the Order or this Series Resolution that require the consent of the Owners, the Insurer's prior written consent shall be required. Copies of any amendments or supplements to the Order or this Series Resolution that are consented to by the Insurer shall be sent to the Rating Agencies that have assigned a rating to the Series 2008A Bonds. Notwithstanding any other provision of the Order or this Series Resolution, in determining whether the rights of Owners will be adversely affected by any 26 action taken pursuant to the terms and provisions thereof, the Trustee shall consider the effect on the Owners as if there were no Policy. (f) The Insurer shall be recognized as a third party beneficiary under this Series Resolution and may enforce any such right, remedy or claim conferred, given or granted under this Series Resolution. (g) The Insurer shall be deemed to be the Owner of all of the Series 2008A Bonds for purposes of (a) exercising all remedies and directing the Trustee to take actions or for any other purposes following an Event of Default, and (b) granting any consent, direction or approval or taking any action permitted by or required under this Series Resolution, to be granted or taken by the Owners of such Series 2008A Bonds. (h) Any provision of this Series Resolution expressly recognizing or granting rights in or to Insurer may not be amended in any manner that affects the rights of Insurer hereunder without the prior written consent of Insurer. If the consent of the Owners is required under the Order or this Series Resolution, then the Insurer's consent shall also be required. In connection with any such consent, the Insurer shall have the right to vote.on behalf of all Owners who hold Series 2008A Bonds guaranteed by the Insurer, absent a default by the Insurer under this Policy. In the event of any reorganization or liquidation with respect to the City, the Insurer shall have the right to vote on behalf of all Owners who hold Series 2008A Bonds guaranteed by the Insurer, absent a default by the Insurer under the Policy. Subject to Section 803 of the Order, any acceleration of the Series 2008A Bonds or any annulment thereof shall be subject to the prior written consent of the Insurer. ARTICLE IX MISCELLANEOUS PROVISIONS Section 901. State Law Governs. This Series Resolution is adopted with the intent that the laws of the State shall govern its construction. Section 902. Headings. Any heading preceding the text of the several articles or sections hereof, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Series Resolution, nor shall they affect its meaning, construction or effect. Section 903. Application to Local Government Commission. The City hereby confirms its request to the Local Government Commission to sell the Series 2008 Bonds at private sale and without advertisement in accordance with the provisions of Section 159-123 of the General Statutes of North Carolina, as amended. Section 904. Approval of Purchase Agreements and Direct Placement. (a) The proposal set forth in the Bond Purchase Agreement, to be dated as of the date of delivery thereof 27 (the "Series 2008A Purchase Agreement"), submitted by Banc of America Securities LLC (the "Purchaser"), offering to purchase the. Series 2008A Bonds, bearing interest at the rates determined by the Local Government Commission and approved by the City Manager as hereinafter provided at the aggregate purchase price to be determined by the Local Government Commission and approved by the City Manager as hereinafter provided, such purchase price not to be less than 97% of the aggregate principal amount of the Series 2008A Bonds, upon acceptance by the Local Government Commission on behalf of the City and approval by the City Manager and upon the award of the Series 2008A Bonds to the Purchaser by the Local Government Commission at said price and upon the terms and conditions set forth in the Series 2008A Purchase Agreement, is hereby approved. The City Manager is hereby designated to approve the sale of the Series 2008A Bonds to the Purchaser at such interest rates, for such purchase price and upon such terms and conditions as the City Manager shall determine, all in accordance with the provision of this Series Resolution. (b) The proposal set forth in the Bond Purchase Agreement, to be dated as of the date of delivery thereof (the "Series 2008B Purchase Agreement") submitted by Banc of America Public Capital Corp (the `BAPCC"), offering to purchase the Series 2008B Bonds, bearing interest at the rate determined by the Local Government Commission and approved by the City Manager as hereinafter provided at an aggregate purchase price of 100% of the aggregate principal amount of the Series 2008B Bonds, upon acceptance by the Local Government Commission on behalf of the City and approval by the City Manager and upon the award of the Series 2008B Bonds to BAPCC by the Local Government Commission at said price and upon the terms and conditions set forth in the Series 2008B Purchase Agreement, is hereby approved. The City Manager is hereby designated to approve the direct sale of the Series 2008B Bonds to BAPCC at such interest rates and .upon such terms and conditions as the City Manager shall determine, all in accordance with the provision of this Series Resolution. (c) The City Manager is hereby authorized and directed in the name and on behalf of the City to execute the Series 2008A Purchase Agreement and the Series 2008B Purchase Agreement evidencing the acceptance thereof by the City in substantially the form presented at this meeting together with such changes, additions and deletions as the City Manager, with the advice of counsel, may deem necessary and appropriate; such execution and delivery shall be conclusive evidence of the approval and authorization in all respects of the form and content thereof. Section 905. Authorization of Preliminary Official Statement and Approval of Final Official Statement. The City hereby authorizes the distribution of the Preliminary Official Statement, to be dated on or about December 5, 2007, relating to the Series 2008A Bonds, which Preliminary Official Statement was deemed to be final as of its date within the meaning of Rule 15c2-12 of the Securities Exchange Commission except for the omission of certain pricing and other information permitted by such Rule to be omitted therefrom and to be included in the final Official Statement, and approves and consents to the use and distribution of copies of a final Official Statement, the Order and this Series Resolution by the Purchaser in connection with the offering and sale of the Series 2008A Bonds. The City Council hereby authorizes the Mayor and the City Manager of the City to execute and deliver the final Official Statement relating to the Series 2008A Bonds, in substantially the form of the Preliminary Official Statement presented at this meeting together with such changes, specifications, and deletions as they, with the advice of 28 counsel, may deem necessary and appropriate; such execution and delivery shall be conclusive evidence of the approval and authorization in all respects of the form and content thereof. C\ Section 906. Authorization, Execution and Delivery of Reimbursement Agreement. The City hereby approves the execution and delivery of the Reimbursement Agreement. The Mayor, the City Manager and the Assistant City Manager of the City are hereby authorized and directed to execute and deliver the Reimbursement Agreement, in substantially the form of the Reimbursement Agreement presented at this meeting together with such changes, specifications, and deletions as they, with the advice of counsel, may deem necessary and appropriate; such execution and delivery shall be conclusive evidence of the approval and authorization in all respects of the form and content thereof. Section 907. Authorization for Other Acts. (a) The officers of the City and the agents and employees of the City and the officers and agents of the Trustee are hereby authorized and directed to do all acts and things required of them by the provisions of the Series 2008 Bonds, the Order, the Series 2008A Purchase Agreement and the Series 2008B Purchase Agreement for the full, punctual and complete performance of the terms, covenants, provisions and agreements of the same and also to do all acts and things required of them by the provisions of this Series Resolution. (b) The Mayor, the City Manager and the Assistant City Manager, and any of them, or their deputies, are further authorized and directed (without limitation except as may be expressly set forth herein) to take such action and to execute and deliver any such documents, deeds, certificates, undertakings, agreements (including reserve fund insurance policy agreements) or other instruments as they, with the advice of counsel, may deem necessary and appropriate to effect the transactions contemplated by the Order, this Series Resolution, the Series 2008A Purchase Agreement and the Series 2008B Purchase Agreement. Section 908. Continuing Disclosure Covenant. The City hereby undertakes, for the benefit of the beneficial owners of the Series 2008A Bonds, to provide: (a) by not later than seven months from the end of each Fiscal Year of the City, commencing with the Fiscal Year ending June 30, 2008, to each nationally recognized municipal securities information repository ("NRMSIR") and to the state information depository for the State ("SID"), if any, audited financial statements of the City for such Fiscal Year, if available, prepared in accordance with Section 159-34 of the General Statutes of North Carolina, as it may be amended from time to time, or any successor statute, or, if such audited financial statements of the City are not available by seven months from the end of such Fiscal Year, unaudited financial statements of the City for such Fiscal Year to be replaced subsequently by audited financial statements of the City to be delivered within fifteen (15) days after such audited financial statements become available for distribution; (b) by not later than seven months from the end of each Fiscal Year of the City, commencing with the Fiscal Year ending June 30, 2008, to each NRMSIR, and to the SID, if any, the financial and statistical data as of the date not earlier than the end of the preceding Fiscal Year for the type of information included under the following headings in the Official Statement 29 relating to the Series 2008A Bonds to the extent such items are not included in the audited financial statements referred to in (a) above: n (1) "The Combined Enterprise System - Water System" (permitted plant capacity, average annual demand and peak demand); (2) "The Combined Enterprise System - Water System - Water Rates and Customer Charges, - Connection Fees, - Capacity Fees, - Number of Customers and 1,000 Gallons Consumed and - Major Users"; (3) "The Combined Enterprise System - Sanitary Sewer System" (permitted plant capacity and average annual demand); (4) "The Combined Enterprise System - Sanitary Sewer System - Sewer Rates and Customer Charges, - Connection Fees, - Capacity Fees, - Number of Customers and 1,000 Gallons Treated and - Major Users"; (5) "The Combined Enterprise System - Electric System - Electric Rates, - Number of Customers, - Megawatt Hour Sales and Peak Demand and - Major Users"; (6) "The Combined Enterprise System - Natural Gas System - Natural Gas Rates, - Number of Customers, - Natural Gas Consumption and - Major Users"; and (7) "The City — Tax Information; (c) in a timely manner, to each NRMSIR or to the Municipal Securities Rulemaking Board ("MSRB"), and to the SID, if any, notice of any of the following events with respect to the Series 2008A Bonds, if material: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on any credit enhancements reflecting financial difficulties; (5) substitution of any credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax-exempt status of the Series 2008A Bonds; (7) modification to the rights of the Owners of the Series 2008A Bonds; (8) bond calls, other than pursuant to mandatory sinking fund redemption; (9) defeasances; 30 n (10) release, substitution or sale of any property securing repayment of the Series 2008A Bonds; (11) rating changes; and (d) in a timely manner, to each NRMSIR or to the MSRB, and to the SID, if any, notice of a failure of the City to provide required annual financial information described in (a) or (b) above on or before the date specified. The City may meet the continuing disclosure filing requirements described above either by providing the required information directly to the NRMSIRs or SID, if any, or by providing such information to a central post office that is authorized by the Securities and Exchange Commission to accept such information for subsequent transmission to the NRMSIRs and SID, if any, without separately providing such information to such NRMSIRs or SID, if any. If the City fails to comply with the undertaking described above, the Trustee or any beneficial owner of the Series 2008A Bonds may take action to protect and enforce the rights of all beneficial owners with respect to such undertaking, including an action for specific performance; provided, however, the City's failure to comply with the undertaking described above shall not constitute an Event of Default under the Order and shall not result in any acceleration of the Series 2008A Bonds. All actions shall be instituted, had and maintained, in the manner provided in this paragraph for the benefit of all beneficial owners of the Series 2008A Bonds. The City reserves the right to modify from time to time the information to be provided to the extent necessary or appropriate in the judgment of the City, provided that: (a) any such modification may only be 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 City; (b) the information to be provided, as modified, would have complied with the requirements of Rule 15c2-12 issued under the Securities Exchange Act of 1934 as of the date of the Official Statement, after taking into account any amendments or interpretations of Rule 15c2-12, as well as any changes in circumstances; and (c) any such modification does not materially impair the interests of the beneficial owners of the Series 2008A Bonds, as determined by the Trustee or bond counsel to the City, or by the approving vote of the Owners of a majority in principal amount of the Series 2008A Bonds then Outstanding pursuant to the terms of this Series Resolution, as it may be amended from time to time, at the time of the amendment. In the event the City makes such a modification, annual financial information containing the modified operating data or financial information shall explain, in narrative form, the reasons for the modification and the impact of the change in the type of operating data or financial information being provided. 31 With respect to the Series 2008A Bonds the provisions of this Section 1008 shall terminate upon payment, or provision having been made for payment in a manner consistent with Rule 15c2-12, in full of the principal of and interest on all of the Series 2008A Bonds. The City also undertakes to provide to the holder of Series 2008B Bonds the information set forth in subsections (a) and (b) of this Section at the times and in the manner set forth in such subsections. Section 909. Manner of Giving Notice. All notices, demands and requests to be given to or made under this Series Resolution by the City, the Local Government Commission, the Insurer, the Surety Bond Provider, the Trustee or the Bond Registrar shall be given or made in writing and shall be deemed to be properly given or made if sent by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: (a) As to the City — City of Monroe 300 West Crowell Street Monroe, North Carolina 28110 Attention: City Manager (b) As to the Trustee or Bond Registrar — The Bank of New York Trust Company, N.A. 10161 Centurion Parkway Jacksonville, Florida 32256 Attention: Corporate Trust Department (c) As to the Local Government Commission — North Carolina Local Government Commission 325 N. Salisbury Street Raleigh, North Carolina 27603-1385 Attention: Secretary (d) As to Banc of America Public Capital Corp 555 California Street, 4th Floor San Francisco, California 94104 Attention: Contract Administration 32 (e) As to the Insurer/Reserve Policy Provider — Assured Guaranty Corp. 1325 Avenue of the Americas New York, New York 10019 Attention: Risk Management Department — Public Finance Surveillance Section 910. Series Resolution Effective. This Series Resolution shall take effect upon the Closing, except that the provisions of Sections 903 to 907, inclusive, shall take effect immediately. 33 EXHIBIT A DESCRIPTION OF THE ADDITIONAL IMPROVEMENTS FINANCED WITH SERIES 2008A BONDS A summary of the Additional Improvements to the City's Combined Enterprise System are as follows: Water System Improvements. Construction of a one million gallon water storage tank and water mains and lines. Electric System Improvements. Construction of an electric substation, the installation of new transformers, the replacement of existing transformers, the construction of approximately 12.8 miles of transmission loop around the City and the installation of circuit breakers at an existing substation. Natural Gas Improvements. Construction of an 8" natural gas line loop around the City and the acquisition of land therefor. A-1 n EXHIBIT B DESCRIPTION OF ADDITIONAL IMPROVEMENTS FINANCED WITH SERIES 2008B BONDS Airport System Improvements. Runway extension, rehabilitation and improvements, street rerouting, upgrade of terminal building, the acquisition of the ten (10) existing T -Hangars and the construction of ten (10) new T -Hangars and the acquisition of land for future runway extension, road, ramp and taxiway development. B-1 EXHIBIT C [FORM OF BOND] No $ United States of America State of North Carolina City of Monroe Combined Enterprise System Revenue Bond, Series 2008A INTEREST RATE MATURITY DATE DATED DATE CUSIP REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: DOLLARS The City of Monroe, North Carolina (the "City"), a municipal corporation of the State of North Carolina, for value received, hereby promises to pay, solely from the sources and in the manner hereinafter provided, to the registered owner hereof named above, on the maturity date set forth above (or earlier as hereinafter referred to), upon the presentation and surrender hereof, at the principal corporate trust office of The Bank of New York Trust Company, N.A., Jacksonville, Florida (the "Bond Registrar"), the principal sum set forth above. The City also promises to pay, solely from said sources, interest (calculated on the basis of a 360 -day year consisting of twelve 30 -day months) thereon on each March 1 and September 1 from the Interest Payment Date (as defined in the Series Resolution hereinafter mentioned) next preceding the date on which it is authenticated unless it is authenticated on an Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or if it is authenticated prior to March 1, 2008, in which event it shall bear interest from its date, payable on March 1, 2008 and semi-annually thereafter on September 1 and March 1 of each year at the rate per annum set forth above until the principal sum hereof is paid. The interest so payable and punctually paid or duly provided for, on any Interest Payment Date, will be paid to the person in whose name this Bond is registered at the close of business on the Regular Record Date (as defined in the Series Resolution) for such interest, which shall be the 15th day (whether or not a business day) of the calendar month next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Owner (as defined in the Order hereinafter mentioned) on such Regular Record Date, and may be paid to the person in whose name this Bond is registered at the close of business on a Special Record Date (as defined in the Order) for the payment of such defaulted interest to be fixed by the Trustee hereinafter i mentioned, notice whereof being given to the Owners not less than ten (10) days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Bonds of this Series may be listed C-1 and upon such notice as may be required by such exchange, or as more fully provided in the Order. Such payment of interest shall be made by check mailed to the Owner at his address as it appears on the bond registration books maintained by the Bond Registrar. All such payments shall be made in lawful money of the United States of America. This Bond is one of a duly authorized series of revenue bonds of the City, designated "City of Monroe Combined Enterprise System Revenue Bonds, Series 2008A" (the "Bonds"), issued under and pursuant to the Constitution and laws of the State of North Carolina, including the Act as defined in a bond order duly adopted by the City on May 3, 1994, as supplemented and amended on October 6, 1998 and December 4, 2007 (collectively, the "Order"), pursuant to which The Bank of New York Trust Company, N.A., Jacksonville, Florida, is serving as Trustee, and a series resolution (the "Series Resolution") duly adopted by the City on December 4, 2007, as amended and restated on January 8, 2008. The Bonds are being issued for the purpose of providing funds for (i) paying the Cost of the Additional Improvements (as defined in the Series Resolution), (ii) paying the premiums for the Policy and the Reserve Policy (both as defined in the Series Resolution), and (iii) paying certain costs and expenses incidental to the issuance of the Bonds. The Bonds are being issued by means of a book -entry system with no physical distribution of bond certificates to be made except as provided in the Series Resolution. One bond certificate with respect to each date 011 which the Bonds are stated to mature, in the aggregate principal amount of the Bonds stated to mature on such date and registered in the name of Cede & Co., a nominee of The Depository Trust Company, New York, New York ("DTC"), is being issued and required to be deposited with DTC and immobilized in its custody. The book - entry system will evidence ownership of the Bonds in the principal amount of $5,000 or any whole multiple thereof, with transfers of ownership effected on the records of DTC and its participants pursuant to rules and procedures established by DTC and its participants. Transfer of principal, interest and any redemption premium payments to beneficial owners of the Bonds by participants of DTC will be the responsibility of such participants and other nominees of such beneficial owners. The City will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. While Cede & Co. is the registered owner of this bond, notwithstanding the provisions hereinabove contained, payments of principal of or redemption fl premium, if any, and interest on this bond shall be made in accordance with the existing arrangements between the Bond Registrar and DTC. The Bonds are special obligations of the City secured by a pledge, charge and lien upon Net Revenues, as defined in the Order. The City is not obligated to pay the principal of or the interest on the Bonds except, as provided in the Order, from Net Revenues, or certain other moneys made available therefor under the Order, and neither the faith and credit nor the taxing power of the State of North Carolina or any political subdivision thereof is pledged to the payment of the principal of and the interest on the Bonds. The Order provides for the issuance from time to time under the conditions, limitations and restrictions therein set forth of additional revenue bonds and permits the incurrence of Parity Debt (as defined in the Order) secured pari passu as to the pledge of Net Revenues with the Bonds and other Parity Indebtedness heretofore or hereafter issued or incurred under the Order, subject to the City's right hereafter to determine by resolution not to treat Other General Obligation Indebtedness as Parity Indebtedness. C-2 The Order provides for the creation of a special fund designated "City of Monroe Combined Enterprise System Bond Fund" (the "Bond Fund"). Pursuant to the Series Resolution, r\ special subaccounts have been created within the Bond Fund with respect to the Bonds (the "Subaccounts"), which Subaccounts are pledged and charged with the payment of the principal of and the interest on all Bonds issued pursuant to the provisions of the Series Resolution. The Series Resolution also provides for the deposit of Net Revenues to the credit of the Subaccounts to the extent and in the manner provided in the Order. In certain events, the City will be authorized to deliver replacement Bonds in the form of fully -registered certificates in the denomination of $5,000 or any multiple thereof in exchange for the outstanding Bonds as provided in the Series Resolution. At the principal corporate trust office of the Bond Registrar, in the manner and subject to the conditions provided in the Order, Bonds may be exchanged for an equal aggregate principal amount of Bonds of the same maturity, of authorized denominations and bearing interest at the same rate. The Bond Registrar shall keep at its principal corporate trust office books for the registration of transfer of the Bonds. The transfer of this Bond may be registered only upon such books and as otherwise provided in the Order upon the surrender hereof to the Bond Registrar together with an assignment duly executed by the registered owner hereof or his attorney or legal representative in such form as shall be satisfactory to the Bond Registrar. Upon any such registration of transfer, the Bond Registrar shall deliver in exchange for this Bond a new Bond or Bonds, registered in the name of the transferee, of authorized denominations, in an aggregate principal amount equal to the unredeemed principal amount of this Bond, of the same maturity and bearing interest at the same rate. The Bonds maturing on and after March 1, 2019 are subject to redemption, at the option of the City, on or after March 1, 2018 in whole or in part on any date, from any moneys that may be available for such purpose at a redemption price equal to 100% of the principal amount of the Bonds to be redeemed, plus accrued interest to the redemption date, all in the manner provided in the Series Resolution. The Term Bonds (as defined in the Series Resolution) are subject to mandatory sinking (Th fund redemption from moneys deposited to the credit of the Series 2008 Subaccount of the Sinking Fund Account; in each case in an amount equal to the applicable Sinking Fund Requirement (as defined in the Series Resolution), at a redemption price equal to the principal amount of the Bonds to be so redeemed, without premium, plus interest accrued to the redemption date. At least thirty (30) days but not more than forty-five (45) days prior to the redemption date of any Bonds to be redeemed, whether -such redemption is in whole or in part, the Bond Registrar shall cause a notice of any such redemption signed by the Bond Registrar to be mailed, first class, postage prepaid, to all Owners of Bonds to be redeemed in whole or in part, provided that failure to mail any such notice to any Owner or any defect in such notice shall not affect the validity of the proceedings for such redemption as to the Bonds of any other Owner. The Bond Registrar shall also mail such notice of redemption to two securities depositories and three C-3 national information services which disseminate redemption information and to the Local Government Commission, but failure to mail such notice shall not affect the validity of any proceedings for the redemption of any Bonds. Any notice of redemption, except a notice of redemption in respect of a Sinking Fund Requirement, may state that the redemption to be effected is conditioned upon the receipt by the Trustee or Bond Registrar on or prior to the redemption date of moneys sufficient to pay the principal of and premium, if any, and interest on the Bonds to be redeemed and that if such moneys are not so received such notice shall be of no force or effect and such Bonds shall not be required to be redeemed. In the event that such notice contains such a condition and moneys sufficient to pay the principal of and premium, if any, and interest on such Bonds are not received by the Trustee or Bond Registrar on or prior to the redemption date, the redemption shall not be made and the Bond Registrar shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received. If less than all of the Bonds are to be called for redemption, the Bonds to be so redeemed shall be called for redemption in the manner the City may direct. If less than all of the Bonds of any one maturity are to be called for redemption, the Bond Registrar shall select the Bonds to be redeemed by lot, each $5,000 portion of principal being counted as one Bond for this purpose. The Owner of this Bond shall have no right to enforce the provisions of the Order or to institute action to enforce the covenants therein, or to take any action with respect to any event of default under the Order, or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Order and the Series Resolution. Modifications or alterations of the Order and the Series Resolution or any order or series resolution supplemental thereto may be made only to the extent and in the circumstances permitted by the Order or the Series Resolution, as the case may be. This Bond, notwithstanding the provisions for registration of transfer stated herein and contained in the Order and the Series Resolution, at all times shall be, and shall be understood to be, an investment security within the meaning of and for all the purposes of Article 8 of the Uniform Commercial Code of North Carolina. All acts, conditions and things required to happen, exist and be performed precedent to and in the issuance of this Bond and the adoption of the Order and the Series Resolution have happened, exist and have been performed as so required. This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Order or the Series Resolution until it shall have been authenticated by the execution by the Bond Registrar of the certificate of authentication endorsed hereon. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Order or the Series Resolution, as the case may be. C-4 IN WITNESS WHEREOF, the City, by resolution duly passed by its City Council, has caused this Bond to bear the facsimile signatures of the Mayor and the City Clerk of said City and its corporate seal to be imprinted hereon, all as of the 10th day of January, 2008. (SEAL) C-5 Mayor, City of Monroe City Clerk, City of Monroe fl n CERTIFICATE OF LOCAL GOVERNMENT COMMISSION The issuance of the within bond has been approved under the provisions of The State and Local Government Revenue Bond Act of North Carolina. Secretary, Local Government Commission CERTIFICATE OF AUTHENTICATION Date of authentication: January 10, 2008 This Bond is a Bond of the Series designated therein and issued under the provisions of the within mentioned Order and Series Resolution. The Bank of New York Trust Company, N.A., Bond Registrar By: Authorized Signatory C-6 STATEMENT OF INSURANCE Assured Guaranty Corp. ("Assured Guaranty"), a Maryland -domiciled insurance company, has delivered its financial guaranty insurance policy (the "Policy") with respect to the scheduled payments of principal of and interest on this Bond to The Bank of New York Trust Company, N.A., as paying agent on behalf of the owners of the Bonds (the "Paying Agent"). Such Policy is on file and available for inspection at the principal office of the Paying Agent and a copy thereof may be obtained from Assured Guaranty or the Paying Agent. All payments required to be made under the Policy shall be made in accordance with the provisions thereof. The owner of this Bond acknowledges and consents to the subrogation rights of Assured Guaranty as more fully set forth in the Policy. C-7 fl n [FORM OF ASSIGNMENT] FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE the within bond and all right thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: In the presence of: NOTICE: The signature must be guaranteed by a participant in the Securities Transfer Agents Medallion Program ("STAMP") or such other similar program, all in accordance with the Securities Exchange Act of 1934, as amended. C-8 The signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration of enlargement or any change whatever. EXHIBIT D [FORM OF BOND] No $ United States of America State of North Carolina City of Monroe Combined Enterprise System Revenue Bond, Series 2008B INTEREST RATE MATURITY DATE DATED DATE REGISTERED OWNER: BANC OF AMERICA PUBLIC CAPITAL CORP PRINCIPAL SUM: DOLLARS The City of Monroe, North Carolina (the "City"), a municipal corporation of the State of North Carolina, for value received, hereby promises to pay, solely from the sources and in the manner hereinafter provided, to the registered owner hereof named above, on the maturity date set forth above (or earlier as hereinafter referred to), upon the presentation and surrender hereof, at the principal corporate trust office of The Bank of New York Trust Company, N.A., Jacksonville, Florida (the "Bond Registrar"), the principal sum set forth above. The City also promises to pay, solely from said sources, interest (calculated on the basis of a 360 -day year consisting of twelve 30 -day months) thereon on each March 1 and September 1 from the Interest Payment Date (as defined in the Series Resolution hereinafter mentioned) next preceding the date on which it is authenticated unless it is authenticated on an Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or if it is authenticated prior to March 1, 2008, in which event it shall bear interest from its date, payable on March 1, 2008 and semi-annually thereafter on September 1 and March 1 of each year at the rate per annum set forth above until the principal sum hereof is paid. The interest so payable and punctually paid or duly provided for, on any Interest Payment Date, will be paid to the person in whose name this Bond is registered at the close of business on the Regular Record Date (as defined in the Series Resolution) for such interest, which shall be the 15th day (whether or not a business day) of the calendar month next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Owner (as defined in the Order hereinafter mentioned) on such Regular Record Date, and may be paid to the person in whose name this Bond is registered at the close of business on a Special Record Date (as defined in the Order) for the payment of such defaulted interest to be fixed by the Trustee hereinafter mentioned, notice whereof being given to the Owners not less than ten (10) days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Bonds of this Series may be listed D-1 and upon such notice as may be required by such exchange, or as more fully provided in the Order. Such payment of interest shall be made by check mailed to the Owner at his address as it appears on the bond registration books maintained by the Bond Registrar. All such payments shall be made in lawful money of the United States of America. This Bond is a duly authorized series of revenue bonds of the City, designated "City of Monroe Combined Enterprise System Revenue Bonds, Series 2008B" (the "Bonds"), issued under and pursuant to the Constitution and laws of the State of North Carolina, including the Act as defined in a bond order duly adopted by the City on May 3, 1994, as supplemented and amended on October 6, 1998 and December 4, 2007 (collectively, the "Order"), pursuant to which The Bank of New York Trust Company, N.A., Jacksonville, Florida, is serving as Trustee, and a series resolution (the "Series Resolution") duly adopted by the City on December 4, 2007, as amended and restated on January 8, 2008. The Bonds are being issued for the purpose of providing funds for (i) paying the Cost of the Additional Improvements (as defined in the Series Resolution) and (ii) paying certain costs and expenses incidental to the issuance of the Bonds. The Bonds are special obligations of the City secured by a pledge, charge and lien upon Net Revenues, as defined in the Order. The City is not obligated to pay the principal of or the interest on the Bonds except, as provided in the Order, from Net Revenues, or certain other moneys made available therefor under the Order, and neither the faith and credit nor the taxing power of the State of North Carolina or any political subdivision thereof is pledged to the payment of the principal of and the interest on the Bonds. The Order provides for the issuance from time to time under the conditions, limitations and restrictions therein set forth of additional revenue bonds and permits the incurrence of Parity Debt, as defined in the Order, secured pari passu as to the pledge of Net Revenues with the Bonds and other Parity Indebtedness heretofore or hereafter issued or incurred under the Order, subject to the City's right hereafter to determine by resolution not to treat Other General Obligation Indebtedness as Parity Indebtedness. The Order provides for the creation of a special fund designated "City of Monroe Combined Enterprise System Bond Fund" (the "Bond Fund"). Pursuant to the Series Resolution, special subaccounts have been created within the Bond Fund with respect to the Series 2008A Bonds (as defined in the Series Resolution) and the Bonds (the "Subaccounts"), which Subaccounts are pledged and charged with the payment of the principal of and the interest on all fl Bonds issued pursuant to the provisions of the Series Resolution. The Series Resolution also provides for the deposit of Net Revenues to the credit of the Subaccounts to the extent and in the manner provided in the Order. The Bonds shall be in minimum denominations of $5,000 or any whole multiple thereof. In certain events, the City will be authorized to deliver replacement Bonds in the form of fully - registered certificates in the denomination of $5,000 or any multiple thereof in exchange for the outstanding Bonds as provided in the Series Resolution. At the principal corporate trust office of the Bond Registrar, in the manner and subject to the conditions provided in the Order, Bonds may be exchanged for an equal aggregate principal namount of Bonds of the same maturity, of authorized denominations and bearing interest at the same rate. D-2 This Bond may be only assigned to a bank, insurance company, or a similar financial institution or any other entity approved by the Local Government Commission. The Bond Registrar shall keep at its principal corporate trust office books for the registration of transfer of the Bonds. The transfer of this Bond may be registered only upon such books and as otherwise provided in the Order upon the surrender hereof to the Bond Registrar together with an assignment duly executed by the registered owner hereof or his attorney or legal representative in such form as shall be satisfactory to the Bond Registrar. Upon any such registration of transfer, the Bond Registrar shall deliver in exchange for this Bond a new Bond or Bonds, registered in the name of the transferee, of authorized denominations, in an aggregate principal amount equal to the unredeemed principal amount of this Bond, of the same maturity and bearing interest at the same rate. This Bond is subject to redemption, at the option of the City, on or after March 1, 2010, in whole or in part on any date, from any moneys that may be available for such purpose at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued interest to the redemption date, all in the manner provided in the Series Resolution. At least thirty (30) days but not more than forty-five (45) days prior to the redemption date of any Bonds to be redeemed, whether such redemption is in whole or in part, the Bond Registrar shall cause a notice of any such redemption signed by the Bond Registrar to be mailed, first class, postage prepaid, to all Owners of Bonds to be redeemed in whole or in part, provided that failure to mail any such notice to any Owner or any defect in such notice shall not affect the validity of the proceedings for such redemption as to the Bonds of any other Owner. The Bond Registrar shall also mail such notice of redemption to two securities depositories and three national information services which disseminate redemption information and to the Local Government Commission, but failure to mail such notice shall not affect the validity of any proceedings for the redemption of any Bonds. Any notice of redemption, except a notice of redemption in respect of a Sinking Fund Requirement, may state that the redemption to be effected is conditioned upon the receipt by the Trustee or Bond Registrar on or prior to the redemption date of moneys sufficient to pay the principal of and premium, if any, and interest on the Bonds to be redeemed and that if such moneys are not so received such notice shall be of no force or effect and such Bonds shall not be fl required to be redeemed. In the event that such notice contains such a condition and moneys sufficient to pay the principal of and premium, if any, and interest on such Bonds are not received by the Trustee or Bond Registrar on or prior to the redemption date, the redemption shall not be made and the Bond Registrar shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received. If less than all of the Bonds are to be called for redemption, the Bonds to be so redeemed shall be called for redemption in the manner the City may direct. If less than all of the Bonds of any one maturity are to be called for redemption, the Bond Registrar shall select the Bonds to be redeemed by lot, each $5,000 portion of principal being counted as one Bond for this purpose. The Owner of this Bond shall have no right to enforce the provisions of the Order or to institute action to enforce the covenants therein, or to take any action with respect to any event of D-3 fl n default under the Order, or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Order and the Series Resolution. Modifications or alterations of the Order and the Series Resolution or any order or series resolution supplemental thereto may be made only to the extent and in the circumstances permitted by the Order or the Series Resolution, as the case may be. This Bond, notwithstanding the provisions for registration of transfer stated herein and contained in the Order and the Series Resolution, at all times shall be, and shall be understood to be, an investment security within the meaning of and for all the purposes of Article 8 of the Uniform Commercial Code of North Carolina. All acts, conditions and things required to happen, exist and be performed precedent to and in the issuance of this Bond and the adoption of the Order and the Series Resolution have happened, exist and have been performed as so required. This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Order or the Series Resolution until it shall have been authenticated by the execution by the Bond Registrar of the certificate of authentication endorsed hereon. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Order or the Series Resolution, as the case may be. D-4 IN WITNESS WHEREOF, the City, by resolution duly passed by its City Council, has caused this Bond to bear the facsimile signatures of the Mayor and the City Clerk of said City (n and its corporate seal to be imprinted hereon, all as of the 10th day of January, 2008. n (SEAL) n D-5 Mayor, City of Monroe City Clerk, City of Monroe CERTIFICATE OF LOCAL GOVERNMENT COMMISSION The issuance of the within bond has been approved under the provisions of The State and Local Government Revenue Bond Act of North Carolina. Secretary, Local Government Commission CERTIFICATE OF AUTHENTICATION Date of authentication: January 10, 2008 This Bond is a Bond of the Series designated therein and issued under the provisions of the within mentioned Order and Series Resolution. The Bank of New York Trust Company, N.A., Bond Registrar By: Authorized Signatory D-6 n [FORM OF ASSIGNMENT] FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE the within bond and all right thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: In the presence of: NOTICE: The signature must be guaranteed by a participant in the Securities Transfer Agents Medallion Program ("STAMP") or such other similar program, all in accordance with the Securities Exchange Act of 1934, as amended. D-7 The signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration of enlargement or any change whatever.