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TRANSCRIPT OF PROCEEDINGS AUTHORIZING THE ISSUANCE m $18,370,000 THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI INDUSTRIAL DEVELOPMENT REVENUE REFUNDING BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT) SERIES 2017 CLOSING DATE: NOVEMBER 1, 2017 CLOSING MEMORANDUM $18,370,000 THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI INDUSTRIAL DEVELOPMENT REVENUE REFUNDING BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT) SERIES 2017 This Memorandum sets forth the actions to be taken in connection with the issuance, sale and delivery by The Industrial Development Authority of the City of Riverside, Missouri of its Industrial Development Revenue $18,370,000 (the "Bonds"). The documents and actions described herein and in the Closing List attached hereto are to be delivered and taken as a condition precedent to the issuance of the Bonds. Such delivery of documents and actions shall be deemed to have taken place simultaneously at the closing, and no delivery of documents, payments of moneys or other actions with respect to the foregoing transaction will be considered to have been completed until all such deliveries, payments or other actions have been made or taken. The closing is scheduled for Wednesday, November 1, 2017, at 10:00 a.m., at the offices of Gilmore & Bell, P.C., Kansas City, Missouri. The items set forth on the Closing List will be examined, assembled and incorporated in the transcripts evidencing the authorization and issuance of the Bonds. Copies of the transcript will be prepared and distributed to the following: 1. The Industrial Development Authority of the City of Riverside, Missouri ("Authority") 2. City of Riverside, Missouri (the "City"). 3. UMB Bank, N.A. ("Trustee" and "Paying Agent"). 4. Spencer Fane LLP ("City Attorney"). 5. Gilmore & Bell, P. C. ("Bond Counsel"). 6. Stifel, Nicolaus & Company, Incorporated ("Underwriter"). 7. Lewis Rice LLC ("Underwriter Counsel"). $18,370,000 THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI INDUSTRIAL DEVELOPMENT REVENUE REFUNDING BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT) SERIES 2017 Closing: November 1, 2017 CLOSING LIST Document No. BASIC DOCUMENTS 1. Bond Trust Indenture. 2. Financing Agreement. 3. Tax Compliance Agreement. Exhibit A: Debt Service Schedule and Proof of Bond Yield Exhibit B: IRS Form 8038-G Exhibit C: Description of Property Comprising the Financed Facility and Final Written Allocation of Original Obligations Exhibit D: Sample Annual Compliance Checklist 4. Preliminary Official Statement. 5. Official Statement. 6. Specimen Bond. 7. Bond Purchase Agreement. 8. Escrow Letter of Instructions. 9. Continuing Disclosure Agreement. DOCUMENTS DELIVERED BY THE AUTHORITY 10. Resolution Authorizing Issuance of the Bonds. 11. Excerpt of Minutes of Meeting of the Authority on October 3, 2017, showing passage of Resolution authorizing the issuance of the Bonds; Waiver of Notice of Special Meeting. 12. Authority's Closing Certificate and Instructions to the Trustee. Exhibit A: Articles of Incorporation Exhibit B: Bylaws Exhibit C: Certificate of Good Standing Exhibit D: Facsimile Signature Affidavits DOCUMENTS DELIVERED BY THE CITY 13. City's Closing Certificate, with authorizing Ordinance attached thereto. 14. Excerpt of Minutes of Meeting of the governing body of the City on October 17, 2017, showing passage of Ordinance No. 1565 authorizing the issuance of the Bonds. DOCUMENTS DELIVERED BY THE TRUSTEE 15. Trustee's Closing Certificate. 16. Trustee Defeasance and Redemption Certificate. DOCUMENTS DELIVERED BY THE UNDERWRITER 17. Underwriter's Receipt for Bonds and Closing Certificate. 18. Issue Price Certificate. 19. Closing Memorandum. MISCELLANEOUS CLOSING DOCUMENTS 20. Uniform Commercial Code Financing Statements relating to the Bond Trust Indenture. 21. DTC Blanket Letter of Representations. 22. Rating Letter from Standard & Poor's Rating Services. LEGAL OPINIONS 23. Opinions of Bond Counsel: a. Approving Opinion. b. Supplemental Opinion. C. Disclosure Opinion. d. Defeasance Opinion. 24. Opinion of Authority's Counsel. 25. Opinion of City Attorney. 26. Opinion of Underwriter's Counsel. BOND TRUST INDENTURE Dated as of November 1, 2017 Between THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI And UMB BANK, N.A. as Trustee Relating to: $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 BOND TRUST INDENTURE Table of Contents Page Parties...............................................................................................................................1 Recitals.............................................................................................................................. l GrantingClauses.............................................................................................................1 ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION Section 101. Definitions of Words and Terms.......................................................................................3 Section 102. Rules of Construction.....................................................................................................10 ARTICLE H THE BONDS Section 201. Authorization, Amount and Title of Bonds.....................................................................10 Section 202. Authorization of Series 2016 Bonds...............................................................................11 Section 203. Authorization of Additional Bonds.................................................................................12 Section 204. Method and Place of Payment........................................................................................14 Section 205. Form, Denomination, Numbering and Dating................................................................15 Section 206. Execution and Authentication.........................................................................................15 Section 207. Registration, Transfer and Exchange..............................................................................16 Section208. Temporary Bonds............................................................................................................17 Section 209. Mutilated, Destroyed, Lost and Stolen Bonds................................................................17 Section 210. Cancellation of Bonds.....................................................................................................17 Section 211. Book -Entry Bonds; Securities Depository ......................................................................18 ARTICLE III REDEMPTION OF BONDS Section 301. Redemption of Bonds Generally.....................................................................................19 ARTICLE IV FUNDS AND ACCOUNTS AND APPLICATION OF BOND PROCEEDS AND OTHER MONEYS Section 401. Creation of Funds and Accounts.....................................................................................19 Section 402. Deposit of Bond Proceeds and Other Moneys................................................................19 Section 403. Debt Service Fund...........................................................................................................20 Section404. Rebate Fund....................................................................................................................21 Section 405. Deposits into the Series 2016 Debt Service Reserve Fund.............................................21 (i) Section 406. Application of Moneys in the Series 2016 Debt Service Reserve Fund ....................................................................................................................................22 Section 407. Payments Due on Saturdays, Sundays and Holidays......................................................22 Section 408. Nonpresentment of Bonds...............................................................................................22 Section 409. Records and Reports of Trustee......................................................................................23 ARTICLE V SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS Section 501. Moneys to be Held in Trust.............................................................................................23 Section 502. Investment of Moneys.....................................................................................................23 ARTICLE VI GENERAL COVENANTS AND PROVISIONS Section 601. Authority to Issue Bonds and Execute Indenture............................................................24 Section 602. Limited Obligations........................................................................................................24 ....................................................27 Section 603. Payment of Bonds...........................................................................................................25 Section 604. Performance of Covenants..............................................................................................25 Section 605. Inspection of Books........................................................................................................25 Section 606. Enforcement of Rights....................................................................................................25 Section 607. Amendments to the Financing Agreement and Mortgage..............................................25 Section 608. Tax Covenants.................................................................................................................25 Section 609. Certain Information and Opinions to be Provided to the Authority................................26 Section 610. Continuing Disclosure....................................................................................................26 ARTICLE VII DEFAULT AND REMEDIES Section 701. Events of Default............................................................................................................26 Section 702. Acceleration of Maturity; Rescission and Annulment ....................................................27 Section 703. Exercise of Remedies by the Trustee..............................................................................27 Section 704. Trustee May File Proofs of Claim...................................................................................29 Section 705. Limitation on Suits by Bondowners...............................................................................29 Section 706. Control of Proceedings by Bondowners.........................................................................30 Section 707. Application of Moneys Collected...................................................................................30 Section 708. Rights and Remedies Cumulative...................................................................................31 Section 709. Delay or Omission Not Waiver.......................................................................................31 Section 710. Waiver of Past Defaults...................................................................................................31 ARTICLE VIII THE TRUSTEE Section 801. Acceptance of Trusts; Certain Duties and Responsibilities............................................32 Section 802. Certain Rights of Trustee................................................................................................32 Section 803. Notice of Defaults..........................................................................................................34 Section 804. Compensation and Reimbursement................................................................................34 Section 805. Corporate Trustee Required; Eligibility..........................................................................35 Section 806. Resignation and Removal of Trustee..............................................................................35 Section 807. Appointment of Successor Trustee.................................................................................36 Section 808. Acceptance of Appointment by Successor......................................................................37 Section 809. Merger, Consolidation and Succession to Business........................................................37 Section 810. Co -Trustees and Separate Trustees.................................................................................37 Section 811. Designation of Paying Agents.........................................................................................38 Section 812. Advances by Trustee.......................................................................................................39 ARTICLE IX SUPPLEMENTAL INDENTURES Section 901. Supplemental Indentures without Consent of Bondowners............................................39 Section 902. Supplemental Indentures with Consent of Bondowners.................................................40 Section 903. Execution of Supplemental Indentures...........................................................................40 Section 904. Effect of Supplemental Indentures..................................................................................41 Section 905. Reference in Bonds to Supplemental Indentures............................................................41 Section 906. City Consent to Supplemental Indentures.......................................................................41 ARTICLE X SATISFACTION AND DISCHARGE Section 1001. Payment, Discharge and Defeasance of Bonds...............................................................41 Section 1002. Satisfaction and Discharge of Indenture.........................................................................42 Section 1003. Rights Retained After Discharge.....................................................................................42 ARTICLE XI NOTICES, CONSENTS AND OTHER ACTS Section1101. Notices............................................................................................................................43 Section 1102. Acts of Bondowners........................................................................................................44 Section 1103. Form and Contents of Documents Delivered to Trustee.................................................45 Section 1104. Compliance Certificates and Opinions...........................................................................45 ARTICLE XII MISCELLANEOUS PROVISIONS Section 1201. Further Assurances..........................................................................................................46 Section 1202. Immunity of Officers, Directors, Employees and Members of Authority.....................................................................................................................46 Section 1203. Limitation on Authority Obligations...............................................................................46 Section 1204. Benefit of Indenture........................................................................................................47 Section 1205. No Pecuniary Liability....................................................................................................47 Section1206. Severability.....................................................................................................................47 Section 1207. Execution in Counterparts...............................................................................................47 Section1208. Governing Law...............................................................................................................47 Section 1209. Electronic Transactions...................................................................................................47 Signaturesand Seals...................................................................................................... S-1 Exhibit A - Form of Bonds Exhibit B - Form of Disbursement Request - Costs of Issuance Fund (iv) BOND TRUST INDENTURE THIS BOND TRUST INDENTURE (the "Indenture"), dated as of November 1, 2017, between THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI, a body politic and corporate and a public instrumentality duly organized and existing under the laws of the State of Missouri (the "Authority"), and UMB BANK, N.A., a national banking association duly organized and existing under the laws of the United States of America, and having its principal corporate trust office located in the City of Kansas City, Missouri, as trustee (the "Trustee"). RECITALS 1. The Authority is authorized and empowered under the Missouri Industrial Development Corporation Act, Chapter 349 of the Revised Statutes of Missouri, as amended ("Act"), to issue revenue bonds for the purpose of providing funds to finance and refinance the costs of certain "projects" as defined in the Act (which includes "public facilities" as defined in the Act) and to pay certain costs related to the issuance of such bonds. 2. The Authority has previously issued its (i) Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007A, issued in the original principal amount of $30,265,000, and (ii) Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project— City of Riverside, Missouri), Series 2007B, issued in the original principal amount of $10,000,000 (collectively, the "Refunded Bonds"). 3. The proceeds of the Refunded Bonds were used to fund certain infrastructure costs (the "Project") related to construction of improvements as a part of the redevelopment of an approximately 1,800 acre area in the City (the "Redevelopment Area") on the north bank of the Missouri River pursuant to a redevelopment plan (the "Redevelopment Plan") adopted by the City under the provisions of the Real Property Tax Increment Allocation Redevelopment Act, Sections 99.800 et seq. of the Revised Statutes of Missouri, as amended (the "TIF Act"). 4. The City of Riverside, Missouri (the "City") has requested that the Authority assist in the refinancing of the Project and the refunding of the Refunded Bonds through the issuance under this Indenture of the Authority's Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017, in the original principal amount of $18,370,000 (the "Series 2017 Bonds"), the proceeds of which Series 2017 Bonds will be applied as described herein and in the Financing Agreement hereinafter described to provide funds to (a) refinance the Project by refunding and redeeming the Refunded Bonds, (b) fund a Debt Service Reserve Fund for the Series 2017 Bonds and (c) pay certain costs related to the issuance of the Series 2017 Bonds, all as more fully described herein and in the Financing Agreement. 5. The governing body of the Authority adopted a resolution on October 3, 2017, authorizing the Authority to issue the Series 2017 Bonds pursuant to this Indenture for the above purposes. 6. Pursuant to such resolution, the Authority is authorized (a) to execute and deliver this Indenture for the purpose of issuing and securing the Series 2017 Bonds and any Additional Bonds (collectively, the "Bonds") as hereinafter provided and (b) to enter into a Financing Agreement dated as of November 1, 2017 (the "Financing Agreement"), between the Authority and the City, under which the Authority will make the proceeds of the Series 2017 Bonds available to the City in accordance with the provisions of the Financing Agreement to refinance the Project and refund and redeem the Refunded Bonds, in consideration of payments to be made by the City to the Trustee which are, subject to annual appropriation as provided therein, to be sufficient to pay the principal of, redemption premium, if any, and interest on the Series 2017 Bonds as the same become due. 7. All things necessary to make the Series 2017 Bonds, when authenticated by the Trustee and issued as provided in this Indenture, the valid, legal and binding obligations of the Authority, and to constitute this Indenture a valid, legal and binding pledge and assignment of the property, rights, interests and revenues made herein for the security of the payment of the Series 2017 Bonds, have been done and performed, and the execution and delivery of this Indenture and the execution and issuance of the Series 2017 Bonds, subject to the terms of this Indenture, have in all respects been duly authorized. GRANTING CLAUSES To declare the terms and conditions upon which Bonds are to be authenticated, issued and delivered and to secure the payment of all of the Bonds issued and Outstanding under this Indenture from time to time according to their tenor and effect and to secure the performance and observance by the Authority of all the covenants, agreements and conditions contained in this Indenture and in the Bonds, and in consideration of the premises, the acceptance by the Trustee of the trusts created by this Indenture, the purchase and acceptance of the Bonds by the owners thereof, the Authority hereby transfers in trust, pledges and assigns to the Trustee, and hereby grants a security interest to the Trustee in, the property described in paragraphs (a), (b) and (c) below (said property referred to herein as the "Trust Estate"): (a) All rights, title and interest of the Authority (including, but not limited to, the right to enforce any of the terms thereof) in, to and under (1) the Financing Agreement, including, without limitation, all Financing Payments and other payments to be received by the Authority and paid by the City under and pursuant to and subject to the provisions of the Financing Agreement (except the Authority's rights to payment of its fees and expenses and to indemnification as set forth in the Financing Agreement and as otherwise expressly set forth therein), and (2) all financing statements or other instruments or documents evidencing, securing or otherwise relating to the use of the proceeds of the Bonds; and (b) All moneys and securities (except moneys and securities held in the Rebate Fund) from time to time held by the Trustee under the terms of this Indenture; and (c) Any and all other property (real, personal or mixed) of every kind and nature from time to time, by delivery or by writing of any kind, pledged, assigned or transferred as and for additional security under this Indenture by the Authority or by anyone in its behalf or with its written consent, to the Trustee, which is hereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof. The Trustee shall hold in trust and administer the Trust Estate, upon the terms and conditions set forth in this Indenture for the equal and pro rata benefit and security of each and every owner of Bonds, without preference, priority or distinction as to participation in the lien, benefit and protection of this Indenture of one Bond over or from the others, except as otherwise expressly provided herein. NOW, THEREFORE, the Authority covenants and agrees with the Trustee, for the equal and proportionate benefit of the respective owners of the Bonds, that all Bonds are to be issued, authenticated and delivered and the Trust Estate is to be held and applied by the Trustee, subject to the further covenants, conditions and trusts hereinafter set forth, as follows: -2- ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION Section 101. Definitions of Words and Terms. For all purposes of this Indenture, except as otherwise provided or unless the context otherwise requires, the following words and terms used in this Indenture shall have the following meanings: "Act" means the Missouri Industrial Development Corporation Act, Chapter 349 of the Revised Statutes of Missouri, as from time to time amended. "Additional Bonds" means any additional parity Bonds issued by the Authority pursuant to Section 203 of this Indenture that stand on a parity and equality under this Indenture with the Series 2017 Bonds (except with respect to the Series 2017 Debt Service Reserve Fund). "Additional Payments" means the Additional Payments described in Section 3.4 of the Financing Agreement. "Authority" means The Industrial Development Authority of the City of Riverside, Missouri created by the Act, and its successors and assigns or any body, agency or instrumentality of the State of Missouri succeeding to or charged with the powers, duties and functions of the Authority. "Authority Representative" means the Chairman, Vice Chairman, President or Executive Director of the Authority, and any other duly authorized officer of the Authority whose authority to execute any particular instrument or take a particular action under this Indenture or the Financing Agreement shall be evidenced by a written certificate furnished to the City and the Trustee containing the specimen signature of such person or persons and signed on behalf of the Authority by its Chairman or Executive Director. "Authorizing Ordinance" means Ordinance No. 1565 of the City passed on October 17, 2017. "Bond" or "Bonds" means the Series 2017 Bonds and any Additional Bonds issued pursuant to Section 203 of this Indenture. "Bond Issuance Date" means November 1, 2017. "Business Day" means a day on which the Trustee and any Paying Agent shall be scheduled in the normal course of its operations to be open to the public for conduct of its banking operations. "Cede & Co." means Cede & Co., as nominee of The Depository Trust Company, New York, New York. "City" means the City of Riverside, Missouri, a city of the fourth class and political subdivision of the State of Missouri and its successors and assigns. "City Representative" means the Mayor, City Administrator, the Director of Finance or the City Attorney, and any other duly authorized official of the City whose authority to execute any particular instrument or take a particular action under this Indenture or the Financing Agreement shall be evidenced by a written certificate furnished to the Authority and the Trustee containing the specimen signature of such person or persons and signed on behalf of the City by the City Administrator. -3- "Continuing Disclosure Agreement" means the Continuing Disclosure Agreement dated as of November 1, 2017, by and between the City and UMB Bank, N.A., as dissemination agent, for the benefit of holders of the Bonds, as from time to time amended in accordance with the provisions thereof. "Costs of Issuance" means issuance costs with respect to the Bonds, including but not limited to the following: (a) underwriter's spread (whether realized directly or derived through purchase of Bonds at a discount below the price at which they are expected to be sold to the public); (b) counsel fees (including bond counsel, disclosure counsel, City's counsel, as well as any other specialized counsel fees incurred in connection with the borrowing); (c) financial advisor fees of any financial advisor to the Authority or the City incurred in connection with the issuance of the Bonds; (d) rating agency fees; (e) trustee, escrow agent and paying agent fees; (f) accountant fees and other expenses related to issuance of the Bonds; (g) printing costs (for the Bonds and of the preliminary and final Official Statement relating to the Bonds); and (h) fees and expenses of the Authority incurred in connection with the issuance of the Bonds. "Costs of Issuance Fund" means the fund by that name created by Section 401 hereof. "Debt Service Fund" means the fund by that name created by Section 401 of this Indenture. "Debt Service Reserve Fund" means the fund by that name created by Section 401 of this Indenture. "Debt Service Reserve Fund Requirement" means with respect to the Series 2017 Bonds, the amount of $1,000,000. "Default" means any event or condition which constitutes, or with the giving of any requisite notice or upon the passage of any requisite time period or upon the occurrence of both would constitute, an Event of Default. "Defeasance Obligations" means: (a) Government Obligations which are not subject to redemption prior to maturity; or (b) Cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with Government Obligations). ME "Environmental Regulations" means any federal, state or local law, statute, code, ordinance, regulation, requirement or rule defining and governing dangerous, toxic or hazardous pollutants, contaminants, chemicals, materials, or substances. "Escrow Agent" means UMB Bank, N.A., as Trustee and Paying Agent for the Refunded Bonds. "Escrow Agreement" means the Escrow Letter of Instructions from the City and the Authority to the Trustee dated the date of issuance of the Series 2017 Bonds and related to the refunding of the Refunded Bonds. "Escrow Fund" means the fund by that name created under the Escrow Agreement and referred to in Section 401. "Event of Default" means any event of default as defined in Section 701 hereof. "Event of Nonappropriation" means failure of the City to budget and appropriate on or before the last day of any Fiscal Year, moneys sufficient to pay the Financing Payments and reasonably expected Additional Payments due and payable during the next Fiscal Year. "Financing" means the Authority making the proceeds of the Series 2017 Bonds available to the City pursuant to the Financing Agreement. "Financing Agreement" means the Financing Agreement dated as of November 1, 2017, between the Authority and the City as from time to time amended by Supplemental Financing Agreements in accordance with the provisions of the Financing Agreement. "Financing Payment Date" means on or before the Business Day preceding the date any payment is due on the Series 2017 Bonds. "Financing Payments" means the payments of principal and interest on the Financing referred to in Section 3.2 of the Financing Agreement. "Fiscal Year" means the City's fiscal year, which is currently July 1 to June 30, or as it may be hereinafter defined by the City. "Government Obligations" means the following: (a) bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed by, the United States of America; and (b) evidences of direct ownership of a proportionate or individual interest in future interest or principal payments on specified direct obligations of, or obligations the payment of the principal of and interest on which are unconditionally guaranteed by, the United States of America, which obligations are held by a bank or trust company organized and existing under the laws of the United States of America or any state thereof in the capacity of custodian in form and substance satisfactory to the Trustee. "Indenture" means this Bond Trust Indenture as originally executed by the Authority and the Trustee, as from time to time amended and supplemented by Supplemental Indentures in accordance with the provisions of this Indenture. -5- "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended, and, when appropriate, any statutory predecessor or successor thereto, and all applicable regulations (whether proposed, temporary or final) thereunder and any applicable official rulings, announcements, notices, procedures and judicial determinations relating to the foregoing. "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Trustee. "Officer's Certificate" means a written certificate in the form described in Section 1104 hereof of the City by the City Representative, which certificate shall be deemed to constitute a representation of, and shall be binding upon, the City with respect to matters set forth therein. "Opinion of Bond Counsel" means a written opinion in the form described in Section 1104 hereof of any legal counsel acceptable to the Authority and the Trustee who shall be nationally recognized as expert in matters pertaining to the validity of obligations of governmental issuers and the exemption from federal income taxation of interest on such obligations. "Opinion of Counsel" means a written opinion in the form described in Section 1104 hereof of any legal counsel acceptable to the City and the Trustee and, to the extent the Authority is asked to take action in reliance thereon, the Authority, who may be an employee of or counsel to the Trustee or the City. "Original Purchaser" means Stifel, Nicolaus & Company, Incorporated, underwriter of the Series 2017 Bonds. "Outstanding" means when used with respect to Bonds, as of the date of determination, all Bonds theretofore authenticated and delivered under this Indenture, except: (1) Bonds theretofore cancelled by the Trustee or delivered to the Trustee for cancellation as provided in Section 210 of this Indenture; (2) Bonds for whose payment or redemption money or Government Obligations in the necessary amount has been deposited with the Trustee or any Paying Agent in trust for the owners of such Bonds as provided in Section 1001 of this Indenture, provided that, if such Bonds are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; (3) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered under this Indenture; and (4) Bonds alleged to have been destroyed, lost or stolen which have been paid as provided in Section 209 of this Indenture. "Owner" or `Bondowner" means the registered owner of any Bond as recorded on the bond registration records maintained by the Trustee. "Participants" means those financial institutions for whom the Securities Depository effects book -entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. 1.2 "Paying Agent" means the Trustee and any other commercial bank or trust institution organized under the laws of any state of the United States of America or any national banking association designated pursuant to this Indenture or any Supplemental Indenture as paying agent for any series of Bonds at which the principal of, redemption premium, if any, and interest on such Bonds shall be payable. "Permitted Investments" means, if and to the extent the same are at the time legal for investment of funds held under this Indenture: (1) cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in paragraph (2) below); (2) direct obligations of (including obligations issued or held in book entry form on the books of) the Department of Treasury of the United States of America; (3) obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: - Export - Import Bank, - Farm Credit System Financial Assistance Corporation, - Rural Economic Community Development Administration (formerly the Farmers Home Administration), - General Services Administration, - U.S. Maritime Administration, - Small Business Administration, - Government National Mortgage Association (GNMA), - U.S. Department of Housing & Urban Development (PHA's), - Federal Housing Administration, and - Federal Financing Bank; (4) direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: Senior debt obligations rated at least as high as the sovereign debt rating of the United States by Moody's and "AAA" by Standard & Poor's issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC), Obligations of the Resolution Funding Corporation (REFCORP), and Senior debt obligations of the Federal Home Loan Bank System; (5) U.S. dollar denominated deposit accounts, federal funds and banker's acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "A-1" or "A-1+" by Standard & Poor's and "P-1" by Moody's and maturing no more than 360 days after the date of purchase (ratings on holding companies are not considered as the rating of the bank); (6) commercial paper which is rated at the time of purchase in the single highest classification, "A -W' by Standard & Poor's and "P -I" by Moody's and which matures not more than 270 days after the date of purchase; (7) investments in a money market fund rated "AAAm" or "AAAm-G" by Standard & Poor's; -7- (8) "Pre -refunded Municipal Obligations," defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (A) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of Standard & Poor's and Moody's or any successors thereto; or (B) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (2) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to above, as appropriate; provided, however, that Pre - refunded Municipal Obligations meeting the requirements of this subsection (B) may not be used as Permitted Investments without the prior written approval of Standard & Poor's. (9) general obligations of states with a rating of at least "AVA" or higher by both Moody's and Standard & Poor's; and (10) investment agreements (supported by appropriate opinions of counsel) with notice to Standard & Poor's. The value, which shall be determined as of each date any payment is due on the Series 2017 Bonds, of the above investments shall be calculated as follows: (a) as to investments the prices of which are received by the Trustee from pricing services utilized by it in the ordinary course of its trust business, the price received from such services; (b) as to certificates of deposit and bankers acceptances: the face amount thereof, and (c) as to any investment not specified above: the value thereof established by prior agreement between the City and the Trustee. "Person" means any natural person, firm, association, corporation, partnership, limited liability company, joint stock company, a joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. "Prime Rate" means, for any date of determination, the interest rate per annum publicly announced from time to time by the Trustee as its "prime rate." "Rebate Fund" means the fund by that name created by Section 401 hereof. 10 "Record Date" means the 15th day (whether or not a Business Day) of the calendar month next preceding the month in which an interest payment on any Bond is to be made. "Refunded Bonds" means, collectively, the Series 2007A Bonds and the Series 2007B Bonds. "Replacement Bonds" means Bonds issued to the beneficial owners of the Bonds in accordance with Section 211 hereof. "Securities Depository" means, initially, The Depository Trust Company, New York, New York, and its successors and assigns. "Series 2007A Bonds" means the Authority's outstanding Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007A, issued in the original principal amount of $30,265,000. "Series 2007B Bonds" means the Authority's outstanding Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007B, issued in the original principal amount of $10,000,000. "Series 2017 Bonds" means the Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017, aggregating the principal amount of $18,370,000, issued pursuant to Section 202 of this Indenture. "Standard & Poor's" means S&P Global Rating, a division of S&P Global, Inc., New York, New York, and its successors and assigns, and, if such firm shall be dissolved or liquidated or shall no longer perform the functions of a securities rating service, Standard & Poor's shall be deemed to refer to any other nationally recognized securities rating service designated by the City, with notice to the Authority and the Trustee. "Supplemental Financing Agreement" means any agreement supplemental or amendatory to the Financing Agreement entered into by the Authority and the City pursuant to Article XI of the Financing Agreement. "Supplemental Indenture" means any indenture supplemental or amendatory to this Indenture entered into by the Authority and the Trustee pursuant to Article IX of this Indenture. "Tax Compliance Agreement" means the Tax Compliance Agreement dated as of November 1, 2017, among the Authority, the City and the Trustee. "TIF Act" means the Real Property Tax Increment Allocation Redevelopment Act, Sections 99.800-99.865 of the Revised Statutes of Missouri, as amended. "Transaction Documents" means this Indenture, the Bonds, the Financing Agreement, the Official Statement relating to the Bonds, the Continuing Disclosure Agreement, the Tax Compliance Agreement, the Escrow Agreement, the Authorizing Ordinance and any and all other documents or instruments that evidence or are a part of the transactions referred to in this Indenture, the Financing Agreement or the Official Statement or contemplated by this Indenture, the Financing Agreement or the Official Statement; and any and all future renewals and extensions or restatements of, or amendments or supplements to, any of the foregoing; provided, however, that when the words "Transaction Documents" are used in the context of the authorization, execution, delivery, approval or performance of Transaction R1 Documents by a particular party, the same shall mean only those Transaction Documents that provide for or contemplate authorization, execution, delivery, approval or performance by such party. "Trust Estate" means the Trust Estate described in the Granting Clauses of this Indenture. "Trustee" means UMB Bank, N.A., Kansas City, Missouri, and its successor or successors and any other corporation or association which at any time may be substituted in its place pursuant to and at the time serving as trustee under this Indenture. "Unassigned Authority's Rights" means the Authority's rights to reimbursement and payment of its costs and expenses under Sections 3.4(e), 9.4 and 9.6 of the Financing Agreement, its rights of access under Section 6.1 of the Financing Agreement, its rights to indemnity under Section 6.2 of the Financing Agreement, its rights to exemption from liability under Section 12.7 of the Financing Agreement, its rights to receive notices, reports and other statements and its rights to consent to certain matters. Section 102. Rules of Construction. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires, the following rules of construction apply in construing the provisions of this Indenture: (a) The terms defined in this Article include the plural as well as the singular. (b) All accounting terms not otherwise defined herein shall have the meanings assigned to them, and all computations herein provided for shall be made, in accordance with generally accepted accounting principles. (c) All references herein to "generally accepted accounting principles" refer to such principles in effect on the date of the determination, certification, computation or other action to be taken hereunder using or involving such terms. (d) All references in this instrument to designated "Articles," "Sections" and other subdivisions are to be the designated Articles, Sections and other subdivisions of this instrument as originally executed. (e) The words "herein," "hereof' and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. (f) The Article and section headings herein and in the Table of Contents are for convenience only and shall not affect the construction hereof. (g) Whenever an item or items are listed after the word "including," such listing is not intended to be a listing that excludes items not listed. ARTICLE H THE BONDS Section 201. Authorization, Amount and Title of Bonds. The Authority may issue Bonds in series from time to time under this Indenture, but subject to the provisions of this Indenture and any Supplemental Indenture authorizing a series of Bonds. No Bonds may be issued under this Indenture except in accordance with the provisions of this Article. The total principal amount of Bonds, the number of Bonds -10- and series of Bonds that may be issued under this Indenture is not limited, except with respect to the Series 2017 Bonds as provided in Section 202 hereof, and with respect to Additional Bonds as provided in Section 203 hereof and in the Supplemental Indenture providing for the issuance thereof, and except as may be limited by law. The several series of Bonds may differ as between series in any respect not in conflict with the provisions of this Indenture and as may be prescribed in the Supplemental Indenture authorizing such series. The general title of all series of Bonds authorized to be issued under this Indenture shall be "Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project)," with such appropriate particular project and series designation added to or incorporated in such title for the Bonds of any particular series as the Authority may determine. Section 202. Authorization of Series 2017 Bonds. There shall be issued under and secured by this Indenture a series of Bonds in the aggregate principal amount of $18,370,000 for the purpose of providing funds to make available to the City to (1) refund the Refunded Bonds, (2) fund a Debt Service Reserve Fund for the Series 2017 Bonds, and (3) pay certain Costs of Issuance. The bonds shall be designated "Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017" in the principal amount of $18,370,000. The Series 2017 Bonds shall be dated November 1, 2017, shall mature on May 1 in the years and in the respective principal amounts (subject to prior redemption as provided in Article III hereof), and shall bear interest at the respective rates per annum, as follows: SERIES 2017 SERIAL BONDS Maturity Principal Interest May 1 Amount Rate 2018 $2,000,000 2.000% 2019 2,095,000 3.000 2020 2,160,000 3.000 2021 2,225,000 4.000 2022 2,310,000 4.000 2023 2,405,000 5.000 2024 2,525,000 5.000 2025 2,650,000 5.000 The Series 2017 Bonds shall bear interest (computed on the basis of a 360 -day year of twelve 30 -day months) from their dated date or from the most recent interest payment date to which interest has been paid or duly provided for, payable on May 1 and November 1 of each year, beginning on May 1, 2018. The Series 2017 Bonds shall be executed in the manner set forth herein and delivered to the Trustee for authentication, but prior to or simultaneously with the authentication and delivery of the Series 2017 Bonds by the Trustee the following documents shall be filed with the Trustee: (a) A copy, certified by the Secretary or Assistant Secretary of the Authority, of the resolution adopted by the Authority authorizing the issuance of the Series 2017 Bonds and the execution of this Indenture, the Financing Agreement and any other Transaction Documents to which it is a party; (b) A copy, certified by the City Clerk of the City of the Authorizing Ordinance and such other ordinances and resolutions adopted by the City authorizing the execution and delivery of the Financing Agreement and any other Transaction Documents to which it is a party; -11- (c) An original executed counterpart of this Indenture, the Financing Agreement, the Tax Compliance Agreement, the Escrow Agreement and the Continuing Disclosure Agreement; (d) A request and authorization to the Trustee on behalf of the Authority, executed by the Authority Representative, to authenticate the Series 2017 Bonds and deliver said Series 2017 Bonds to the purchasers therein identified upon payment to the Trustee, for the account of the Authority, of the purchase price thereof. The Trustee shall be entitled to rely conclusively upon such request and authorization as to the names of the purchasers and the amounts of such purchase price; (e) An Opinion of Bond Counsel, dated the date of original issuance of the Series 2017 Bonds; and (f) Such other certificates, statements, opinions, receipts and documents required by any of the Transaction Documents or as the Trustee shall reasonably require for the delivery of the Series 2017 Bonds. When the documents specified above have been filed with the Trustee, and when the Series 2017 Bonds shall have been executed and authenticated as required by this Indenture, the Trustee shall deliver the Series 2017 Bonds to or upon the order of the Original Purchaser thereof, but only upon payment to the Trustee of the purchase price of the Series 2017 Bonds. The proceeds of the sale of the Series 2017 Bonds, including accrued interest and premium thereon, if any, shall be immediately paid over to the Trustee, and the Trustee shall deposit and apply such proceeds as provided in Article 1V hereof. Section 203. Authorization of Additional Bonds. Additional Bonds may be issued under and equally and ratably secured by this Indenture on a parity (except as otherwise provided in this Section) with the Series 2017 Bonds and any other Additional Bonds at any time and from time to time, upon compliance with the conditions set forth in this Section and in Article VII of the Financing Agreement, for any purpose authorized under the Act. Before any Additional Bonds are issued under the provisions of this Section, the Authority shall adopt a resolution (1) authorizing the issuance of such Additional Bonds, fixing the principal amount thereof and describing the purpose or purposes for which such Additional Bonds are being issued, (2) authorizing the Authority to enter into a Supplemental Indenture for the purpose of issuing such Additional Bonds and establishing the terms and provisions of such series of Bonds and the form of the Bonds of such series, (3) authorizing the Authority to enter into a Supplemental Financing Agreement with the City to provide for payments, which may be subject to annual appropriation, at least sufficient to pay the principal of, redemption premium, if any, and interest on the Bonds then to be Outstanding (including the Additional Bonds to be issued) as the same become due, and to extend the term of the Financing Agreement if the maturity of any of the Additional Bonds would otherwise occur after the expiration of the term of the Financing Agreement, and (4) providing for such other matters as are appropriate because of the issuance of the Additional Bonds, which matters, in the judgment of the Authority, are not prejudicial to the Authority or the owners of the Bonds previously issued. Such Additional Bonds shall have the same general title as the Series 2017 Bonds, except for an identifying project, series or date, and shall be dated, shall mature on such dates, shall be numbered, shall bear interest at such rates not exceeding the maximum rate then permitted by law payable at such times, and shall be redeemable at such times and prices (subject to the provisions of Article III of this Indenture), all as provided by the Supplemental Indenture authorizing the issuance of such Additional Bonds. Except as to any difference in the date, the maturities, the rates of interest or the provisions for redemption, such Additional Bonds shall be on a parity with and shall be entitled to the same benefit and security of this 5N Indenture as the Series 2017 Bonds and any other Additional Bonds, provided that any Additional Bonds shall not be entitled to the benefit of the Series 2017 Debt Service Reserve Fund. Such Additional Bonds shall be executed in the manner set forth in Section 206 hereof and shall be deposited with the Trustee for authentication, but prior to or simultaneously with the authentication and delivery of such Additional Bonds by the Trustee, and as a condition precedent thereto, there shall be filed with the Trustee the following: (a) A copy, certified by the Secretary or Assistant Secretary of the Authority, of the resolution adopted by the Authority authorizing the issuance of such Additional Bonds and the execution of the Supplemental Indenture, Supplemental Financing Agreement and supplements to any other Transaction Documents as may be necessary. (b) A copy, certified by the City Clerk of the ordinances and/or resolutions adopted by the City authorizing the execution and delivery of the Supplemental Financing Agreement and supplements to any other Transaction Documents. (c) An original executed counterpart of the Supplemental Indenture, executed by the Authority and the Trustee, authorizing the issuance of the Additional Bonds being issued, specifying, among other things, the terms thereof, and providing for the disposition of the proceeds of such Additional Bonds and the Supplemental Financing Agreement. (d) An original executed counterpart of the Supplemental Financing Agreement, if any, executed by the City and the Authority, specifying, among other things, the principal amount, rate of interest, maturity and terms of optional prepayment. (e) An Officer's Certificate (1) stating that no event of default under the Financing Agreement has occurred and is continuing and that no event has occurred and is continuing which with the lapse of time or giving of notice, or both, would constitute such an event of default, and (2) stating the purpose or purposes for which such Additional Bonds are being issued and accompanied by the certificates, reports or opinions demonstrating compliance with the applicable tests set forth in Section 7.1 of the Financing Agreement. (f) A request and authorization to the Trustee, on behalf of the Authority, executed by a City Representative, to authenticate the Additional Bonds and deliver said Additional Bonds to the purchasers therein identified upon payment to the Trustee, for the account of the Authority, of the purchase price thereof. The Trustee shall be entitled to rely conclusively upon such request and authorization as to the names of the purchasers and the amounts of such purchase price. (g) If such Additional Bonds are to be insured or guaranteed by a bond insurer or other credit enhancer, an insurance policy or other credit enhancement in each case in form or substance satisfactory to the Authority and the City. (h) An Opinion of Bond Counsel to the effect that all requirements for the issuance of such Additional Bonds have been met and the issuance of such Additional Bonds will not result in the interest on any Bonds then Outstanding becoming includible in gross income for purposes of federal income taxation. (i) Such other certificates, statements, receipts and documents required by any of the Transaction Documents or as the Authority, the City or the Trustee shall reasonably require for the delivery of the Additional Bonds. -13- When the documents specified above have been filed with the Trustee, and when such Additional Bonds have been executed and authenticated as required by this Indenture, the Trustee shall deliver such Additional Bonds to or upon the order of the purchasers thereof, but only upon payment to the Trustee of the purchase price of such Additional Bonds. The proceeds of the sale of such Additional Bonds, including accrued interest and premium thereon, if any, shall be immediately paid over to the Trustee and shall be deposited and applied by the Trustee as provided in Article IV hereof and in the Supplemental Indenture authorizing the issuance of such Additional Bonds. Section 204. Method and Place of Payment. The principal of, redemption premium, if any, and interest on the Bonds shall be payable in any coin or currency of the United States of America which on the respective dates of payment thereof is legal tender for the payment of public and private debts. The principal of and the redemption premium, if any, on all Bonds shall be payable by check or draft at maturity or upon earlier redemption to the Persons in whose names such Bonds are registered on the bond register maintained by the Trustee at the maturity or redemption date thereof, upon the presentation and surrender of such Bonds at the principal corporate trust office of the Trustee or of any Paying Agent named in the Bonds. The interest payable on each Bond on any interest payment date shall be paid by the Trustee to the registered owner of such Bond as shown on the bond register at the close of business on the Record Date for such interest, (1) by check or draft mailed to such registered owner at his address as it appears on the bond register or at such other address as is furnished to the Trustee in writing by such owner, or (2) at the written request addressed to the Trustee by any owner of Bonds in the aggregate principal amount of at least $1,000,000, by electronic transfer to such owner upon written notice to the Trustee from such owner containing the electronic transfer instructions (which shall be in the continental United States) to which such owner wishes to have such transfer directed and such written notice is given by such owner to the Trustee not less than 15 days prior to the Record Date. Any such written notice for electronic transfer shall be signed by such owner and shall include the name of the bank, its address, its ABA routing number and the name, number and contact name related to such owner's account at such bank to which the payment is to be credited. Interest on any Bond that is due and payable but not paid on the date due ("Defaulted Interest") shall cease to be payable to the owner of such Bond on the relevant Record Date and shall be payable to the owner in whose name such Bond is registered at the close of business on a special record date (the "Special Record Date") for the payment of such Defaulted Interest, which Special Record Date shall be fixed in the following manner. The City shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be such as will enable the Trustee to comply with the next sentence hereof), and shall deposit with the Trustee at the time of such notice an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment; money deposited with the Trustee shall be held in trust for the benefit of the owners of the Bonds entitled to such Defaulted Interest as provided in this Section. Following receipt of such funds the Trustee shall fix the Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the City of such Special Record Date and, in the name and at the expense of the City, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each owner of a Bond entitled to such notice at the address of such owner as it appears on the bond register not less than 10 days prior to such Special Record Date. -14- Subject to the foregoing provisions of this Section, each Bond delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond and each such Bond shall bear interest from such date, that neither gain nor loss in interest shall result from such transfer, exchange or substitution. Section 205. Form, Denomination, Numbering and Dating. The Bonds of each series issued under this Indenture shall be issuable as fully registered bonds without coupons in substantially the form set forth in Exhibit B attached to this Indenture and the Supplemental Bond Indenture under which any Additional Bonds are issued, in each case with such necessary or appropriate variations, omissions and insertions as are permitted or required by this Indenture or any Supplemental Bond Indenture. The Bonds may have endorsed thereon such legends or text as may be necessary or appropriate to conform to any applicable rules and regulations of any governmental authority or any custom, usage or requirement of law with respect thereto. The Series 2017 Bonds shall be issuable in the denomination of $5,000 or any integral multiple thereof. The Bonds of each series of Additional Bonds shall be issuable in such denominations as provided in the Supplemental Bond Indenture authorizing such series. In the absence of any such provision with respect to the Bonds of any particular series, the Bonds of such series shall be of the denominations of $5,000 and any integral multiple thereof. The Series 2017 Bonds shall be numbered from R-1 consecutively upward in order of issuance or in such other manner as the Trustee shall designate. The Bonds of each series of Additional Bonds shall be numbered as provided in the Supplemental Bond Indenture authorizing such series. In the absence of any such provision with respect to the Bonds of any particular series, the Bonds of such series shall be numbered R-1 and upward or in such other manner as the Trustee shall designate. The Series 2017 Bonds shall be dated as provided in Section 202 of this Indenture. The Bonds of each series of Additional Bonds shall be dated as provided in the Supplemental Bond Indenture authorizing such series of Bonds. In the absence of any such provision with respect to the Bonds of any particular series, the Bonds of such series shall be dated the date of their original authentication and delivery. Section 206. Execution and Authentication. The Bonds shall be executed on behalf of the Authority by the manual or facsimile signature of its Chairman, Vice Chairman or Executive Director and attested by the manual or facsimile signature of its Secretary or an Assistant Secretary, and shall have the corporate seal of the Authority affixed thereto or imprinted thereon. If any officer whose manual or facsimile signature appears on any Bonds shall cease to hold such office before the authentication and delivery of such Bonds, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such person had remained in office until delivery. Any Bond may be signed by such persons as at the actual time of the execution of such Bond shall be the proper officers to sign such Bond although at the date of such Bond such persons may not have been such officers. No Bond shall be secured by, or be entitled to any lien, right or benefit under, this Indenture or be valid or obligatory for any purpose, unless there appears on such Bond a certificate of authentication substantially in the form provided for in Exhibit B hereto, executed by the Trustee by manual signature of an authorized officer or signatory of the Trustee, and such certificate upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been duly authenticated and delivered hereunder. At any time and from time to time after the execution and delivery of this Indenture, the Authority may deliver Bonds executed by the Authority to the Trustee for authentication and the Trustee shall authenticate and deliver such Bonds as in this Indenture provided and not otherwise. -15- Section 207. Registration, Transfer and Exchange. The Trustee shall cause to be kept at its principal corporate trust office a register (referred to herein as the "bond register") in which, subject to such reasonable regulations as it may prescribe, the Trustee shall provide for the registration, transfer and exchange of Bonds as herein provided. The Trustee is hereby appointed "bond registrar" for the purpose of registering Bonds and transfers of Bonds as herein provided. Bonds may be transferred or exchanged only upon the bond register maintained by the Trustee as provided in this Section. Upon surrender for transfer or exchange of any Bond at the principal corporate trust office of the Trustee, the Authority shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of the same maturity, of any authorized denominations and of a like aggregate principal amount. Every Bond presented or surrendered for transfer or exchange shall (if so required by the Authority or the Trustee, as bond registrar) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Authority and the Trustee, as bond registrar, duly executed by the owner thereof or his attorney or legal representative duly authorized in writing. All Bonds surrendered upon any exchange or transfer provided for in this Indenture shall be promptly cancelled by the Trustee and thereafter disposed of as required by applicable law. All Bonds issued upon any transfer or exchange of Bonds shall be the valid obligations of the Authority, evidencing the same debt, and entitled to the same security and benefits under this Indenture, as the Bonds surrendered upon such transfer or exchange. No service charge shall be made for any registration, transfer or exchange of Bonds, but the Trustee or Securities Depository may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds, and such charge shall be paid before any such new Bond shall be delivered. The fees and charges of the Trustee for making any transfer or exchange and the expense of any bond printing necessary to effect any such transfer or exchange shall be paid by the City. In the event any registered owner fails to provide a correct taxpayer identification number to the Trustee, the Trustee may impose a charge against such registered owner sufficient to pay any governmental charge required to be paid as a result of such failure. In compliance with Section 3406 of the Internal Revenue Code, such amount may be deducted by the Trustee from amounts otherwise payable to such registered owner hereunder or under the Bonds. The Trustee shall not be required (i) to transfer or exchange any Bond during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of such Bond and ending at the close of business on the day of such mailing, or (ii) to transfer or exchange any Bond so selected for redemption in whole or in part, during a period beginning at the opening of business on any Record Date for such series of Bonds and ending at the close of business on the relevant interest payment date therefor. The Person in whose name any Bond shall be registered on the bond register shall be deemed and regarded as the absolute owner thereof for all purposes, except as otherwise provided in this Indenture, and payment of or on account of the principal of and premium, if any, and interest on any such Bond shall be made only to or upon the order of the registered owner thereof or his legal representative, but such registration may be changed as herein provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. The Trustee will keep on file at its principal corporate trust office a list of the names and addresses of the last known owners of all Bonds and the serial numbers of such Bonds held by each of such owners. -16- At reasonable times and under reasonable regulations established by the Trustee, the list may be inspected and copied by the Authority, the City or the owners of 10% or more in principal amount of Bonds Outstanding or the authorized representative thereof, provided that the ownership of such owner and the authority of any such designated representative shall be evidenced to the satisfaction of the Trustee. Section 208. Temporary Bonds. Pending the preparation of definitive Bonds, the Authority may execute, and upon request of the Authority the Trustee shall authenticate and deliver, temporary Bonds which are printed, lithographed, typewritten, or otherwise produced, in any denomination, substantially of the tenor of the definitive Bonds in lieu of which they are issued, with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Bonds may determine, as evidenced by their execution of such Bonds. If temporary Bonds are issued, the Authority will cause definitive Bonds to be prepared without unreasonable delay. After the preparation of definitive Bonds, the temporary Bonds shall be exchangeable for definitive Bonds upon surrender of the temporary Bonds at the principal corporate trust office of the Trustee, without charge to the owner. Upon surrender for cancellation of any one or more temporary Bonds, the Authority shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Bonds of authorized denominations. Until so exchanged, temporary Outstanding Bonds shall in all respects be entitled to the security and benefits of this Indenture. Section 209. Mutilated, Destroyed, Lost and Stolen Bonds. If (i) any mutilated Bond is surrendered to the Trustee, or the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Bond, and (ii) there is delivered to the Authority and the Trustee such security or indemnity as may be required by either of them to save the Trustee and the Authority harmless, then, in the absence of notice to the Trustee that such Bond has been acquired by a bona fide purchaser, the Authority shall execute and upon its request the Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same series and maturity and of like tenor and principal amount, bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Bond has become or is about to become due and payable, the Authority in its discretion may, instead of issuing a new Bond, pay such Bond. Upon the issuance of any new Bond under this Section, the Authority and the Trustee may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. Every new Bond issued pursuant to this Section in lieu of any destroyed, lost or stolen Bond, shall constitute an original additional contractual obligation of the Authority, whether or not the destroyed, lost or stolen Bond shall be at any time enforceable by anyone, and shall be entitled to all the security and benefits of this Indenture equally and ratably with all other Outstanding Bonds. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Bonds. Section 210. Cancellation of Bonds. All Bonds surrendered for payment, redemption, transfer, exchange or replacement, if surrendered to the Trustee, shall be promptly cancelled by the Trustee, and, if surrendered to any Paying Agent other than the Trustee, shall be delivered to the Trustee and, if not already cancelled, shall be promptly cancelled by the Trustee. The Authority or the City may at any time deliver to the Trustee for cancellation any Bonds previously authenticated and delivered hereunder, which the Authority or the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Trustee. No Bond shall be authenticated in lieu of or in exchange for any Bond cancelled as provided in this Section, except as expressly provided by this Indenture. The Trustee shall -17- execute and deliver to the Authority and the City a certificate describing the Bonds so cancelled. All cancelled Bonds held by the Trustee shall be destroyed and disposed of by the Trustee in accordance with applicable record retention requirements. Section 211. Book -Entry Bonds; Securities Depository. The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no beneficial owner will receive certificates representing their respective interests in the Bonds, except in the event the Trustee issues Replacement Bonds as provided in this Section. It is anticipated that during the term of the Bonds, the Securities Depository will make book -entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Trustee authenticates and delivers Replacement Bonds to the beneficial owners as described in this Section. If the Authority determines (1) (A) that the Securities Depository is unable to properly discharge its responsibilities, or (B) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (C) that the continuation of a book -entry system to the exclusion of any Bonds being issued to any Bondowner other than the Securities Depository is no longer in the best interests of the beneficial owners of the Bonds, or (2) if the Trustee receives written notice from Participants having interests in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a book -entry system to the exclusion of any Bonds being issued to any Bondowner other than the Securities Depository is no longer in the best interests of the beneficial owners of the Bonds, then the Trustee shall notify the Bondowners of such determination or such notice and of the availability of certificates to owners requesting the same, and the Trustee shall register in the name of and authenticate and deliver Replacement Bonds to the beneficial owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may fmd necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (1)(A) or (1)(B) of this paragraph, the Authority, with the consent of the Trustee, may select a successor securities depository in accordance with the following paragraph to effect book -entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository or the Trustee as its agent has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Trustee, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the Authority, the Trustee or Bondowners are unable to locate a qualified successor of the Securities Depository in accordance with the following paragraph, then the Trustee shall authenticate and cause delivery of Replacement Bonds to Bondowners, as provided herein. The Trustee may rely on information from the Securities Depository and its Participants as to the names, addresses and principal amounts held of the beneficial owners of the Bonds. The cost of printing, registration, authentication, payment, transfer and delivery of Replacement Bonds shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Trustee receives written evidence satisfactory to the Trustee with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Trustee upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of Bonds to the successor Securities Depository or its agent in appropriate denominations and form as provided herein. -18- ARTICLE III REDEMPTION OF BONDS Section 301. Redemption of Bonds Generally. The Bonds are not subject to optional or mandatory redemption prior to maturity. ARTICLE IV FUNDS AND ACCOUNTS AND APPLICATION OF BOND PROCEEDS AND OTHER MONEYS Section 401. Creation of Funds and Accounts. There are hereby created and ordered to be established in the custody of the Trustee the following special trust funds in the name of the Authority to be designated as follows: (a) "The Industrial Development Authority of the City of Riverside, Missouri— Riverside Horizons Project Costs of Issuance Fund" (the "Costs of Issuance Fund"), and within such fund separate accounts for each Series of Bonds, initially a "Series 2017 Costs of Issuance Account"; (b) "The Industrial Development Authority of the City of Riverside, Missouri— Riverside Horizons Project Debt Service Fund" (the "Debt Service Fund") and within such fund separate accounts for each Series of Bonds, initially a "Series 2017 Debt Service Account," and within each such account a subaccount for capitalized interest on such Series, if any; (c) The "The Industrial Development Authority of the City of Riverside, Missouri— Riverside Horizons Project Series 2017 Debt Service Reserve Fund" (the "Series 2017 Debt Service Reserve Fund"); and (d) "The Industrial Development Authority of the City of Riverside, Missouri— Riverside Horizons Project Rebate Fund" (the "Rebate Fund") and within such fund separate accounts for each Series of Bonds, initially a "Series 2017 Rebate Account". The Trustee is authorized to establish separate accounts within such funds or otherwise segregate moneys within such funds, on a book -entry basis or in such other manner as the Trustee may deem necessary or convenient, or as the Trustee shall be instructed by the Authority. In addition, the Escrow Agreement establishes the Escrow Fund to be held and administered by the Escrow Agent in accordance with the provisions of the Escrow Agreement. Section 402. Deposit of Bond Proceeds and Other Moneys. The Authority, for and on behalf of the City, shall deposit with the Trustee all of the net proceeds of the Series 2017 Bonds, and the Trustee shall deposit and apply such proceeds, together with other moneys deposited with the Trustee, as follows: (a) Deposit to the credit of the Series 2017 Costs of Issuance Account of the Costs of Issuance Fund from the proceeds of the Series 2017 Bonds, the sum of $209,597.06, which deposit shall be disbursed by the Trustee from time to time, upon receipt of written disbursement requests -19- of the City in substantially the form of Exhibit B hereto and signed by the City Representative in amounts equal to the amount of Costs of Issuance certified in such written requests. At such time as the Trustee is furnished with an Officer's Certificate from the City stating that all Costs of Issuance have been paid, and in any case not later than six months from the date of original issuance of the Series 2017 Bonds, the Trustee shall transfer any moneys remaining in the Series 2017 Costs of Issuance Account to the Series 2017 Debt Service Account; (b) to the Escrow Agent for deposit in the Escrow Fund, $19,744,107.29 from the proceeds of the Series 2017 Bonds, which provides sufficient funds to prepay the Refunded Bonds in accordance with the Escrow Agreement; and (c) Deposit to the Series 2017 Debt Service Reserve Fund the sum of $1,000,000. Section 403. Debt Service Fund. The Trustee shall deposit and credit to the Debt Service Fund, as and when received, as follows: (a) The amounts required to be deposited therein under Section 402(x) hereof and all Financing Payments made by the City pursuant to Section 3.2 of the Financing Agreement; (b) Interest earnings and other income on Permitted Investments required to be deposited in the Debt Service Fund pursuant to Section 502 hereof; (c) Any amounts required by a Supplemental Indenture authorizing the issuance of Additional Bonds to be deposited in the Debt Service Fund, as specified in such Supplemental Indenture; and (d) All other moneys received by the Trustee under and pursuant to any of the provisions of this Indenture or the Financing Agreement or any other Transaction Document, when accompanied by written directions from the person depositing such moneys that such moneys are to be paid into the Debt Service Fund. The moneys in the Debt Service Fund shall be held in trust and shall be applied solely in accordance with the provisions of this Indenture to pay the principal of and redemption premium, if any, and interest on the Bonds as the same become due and payable. Except as otherwise provided herein, moneys in the Debt Service Fund shall be expended solely as follows: (a) to pay interest on the Bonds as the same becomes due; (b) to pay principal of the Bonds as the same mature or become due and upon any mandatory sinking fund redemption thereof; and (c) to pay principal of and redemption premium, if any, on the Bonds as the same become due upon redemption (other than pursuant to a mandatory sinking fund redemption) prior to maturity. The Trustee is authorized and directed to withdraw sufficient funds from the Debt Service Fund to pay principal of, redemption premium, if any, and interest on the Bonds as the same become due and payable at maturity or upon redemption and to make said funds so withdrawn available to the Trustee and any Paying Agent for the purpose of paying said principal, redemption premium, if any, and interest. The Trustee, upon the written instructions from the Authority given pursuant to written direction of the City, shall use excess moneys in the Debt Service Fund to redeem all or part of the Bonds Outstanding and to pay interest to accrue thereon prior to such redemption and redemption premium, if any, on the next succeeding redemption date for which the required redemption notice may be given or on such later redemption date as may be specified by the City, in accordance with the provisions of Article III hereof, so long as the City is not in default with respect to any payments under the Financing Agreement and to the -20- extent said moneys are in excess of the amount required for payment of Bonds theretofore matured or called for redemption. The City may cause such excess money in the Debt Service Fund or such part thereof or other moneys of the City, as the City may direct, to be applied by the Trustee on a best efforts basis to the extent practical for the purchase of Bonds in the open market for the purpose of cancellation at prices not exceeding the principal amount thereof plus accrued interest thereon to the date of such purchase. After payment in full of the principal of, redemption premium, if any, and interest on the Bonds (or after provision has been made for the payment thereof as provided in Section 1001 of this Indenture), and the fees, charges and expenses of the Trustee, any Paying Agents and the Authority, and any other amounts required to be paid under this Indenture and the Financing Agreement, all amounts remaining in the Debt Service Fund shall be paid to the City upon the expiration or sooner termination of the Financing Agreement. Section 404. Rebate Fund. There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Tax Compliance Agreement. All amounts on deposit at any time in the Rebate Fund shall be held by the Trustee in trust to the extent required to pay rebatable arbitrage to the United States of America, and neither the City, the Authority nor the owner of any Bonds shall have any rights in or claim to such money. All amounts held in the Rebate Fund shall be governed by this Section and by the Tax Compliance Agreement (which are incorporated herein by reference). Pursuant to the Tax Compliance Agreement, the Trustee shall remit all required rebate installments and a final rebate payment to the United States. Neither the Trustee nor the Authority shall have any obligation to pay any amounts required to be rebated pursuant to this Section and the Tax Compliance Agreement, other than from moneys held in the Rebate Fund created under this Indenture as provided in this Indenture or from other moneys provided to it by the City. Any moneys remaining in the Rebate Fund after redemption and payment of all of the Bonds and payment and satisfaction of any rebatable arbitrage shall be withdrawn and paid jointly to the City. The obligation to pay arbitrage rebate to the United States and to comply with all other requirements of this Section and the Tax Compliance Agreement shall survive the defeasance or payment in full of the Bonds until all rebatable arbitrage shall have been paid. Section 405. Deposits into the Series 2017 Debt Service Reserve Fund. The following moneys shall be paid over to and deposited by the Trustee into the Series 2017 Debt Service Reserve Fund, as and when received: (1) From the proceeds from the sale of the Series 2017 Bonds, an amount equal to the Series 2017 Debt Service Reserve Fund Requirement. (2) The amounts to be paid by the City pursuant to Section 3.4(f) of the Financing Agreement. (3) The earnings accrued on the investment of moneys in the Series 2017 Debt Service Reserve Fund and required to be deposited into the Series 2017 Debt Service Reserve Fund pursuant to Section 502. (4) All other moneys received by the Trustee when accompanied by directions from the person depositing such moneys that such moneys are to be paid into the Series 2017 Debt Service Reserve Fund. (5) Moneys from the Sales Proceeds Account as described in Section 410. -21- Section 406. Application of Moneys in the Series 2017 Debt Service Reserve Fund. (a) Except as provided in Section 502 for earnings on moneys in the Series 2017 Debt Service Reserve Fund, the moneys in the Series 2017 Debt Service Reserve Fund shall be disbursed and expended by the Trustee, without any further authorization from the City, solely for the payment of the principal of and interest on the Series 2017 Bonds to the extent of any deficiency in the Debt Service Fund for such purposes. Notwithstanding the foregoing, (i) moneys in the Series 2017 Debt Service Reserve Fund may be used to call the Series 2017 Bonds for redemption and payment prior to their stated maturity, provided all of the Series 2017 Bonds at the time Outstanding are called for payment and funds are available to pay the same according to their terms, and (ii) moneys in the Series 2017 Debt Service Reserve Fund shall be used to pay and retire the last Outstanding Series 2017 Bonds unless such Series 2017 Bonds and all interest thereon are otherwise paid. The Trustee may disburse and expend moneys from the Series 2017 Debt Service Reserve Fund for such purpose whether or not the amount in the Series 2017 Debt Service Reserve Fund at that time equals the Series 2017 Debt Service Reserve Fund Requirement. If the Trustee disburses or expends moneys from the Series 2017 Debt Service Reserve Fund for the purposes stated in this paragraph, the Trustee shall immediately notify the City of the amount necessary to restore the balance in the Series 2017 Debt Service Reserve Fund to the Series 2017 Debt Service Reserve Fund Requirement, and the Trustee shall direct the City to restore the deficiency in 12 equal monthly payments beginning not later than the first Business Day of the next calendar month, subject to the limitations on such funding contained in Section 3.5 of the Financing Agreement. (b) On each valuation date (as provided for in Section 502), and immediately subsequent to any transfer of money from the Series 2017 Debt Service Reserve Fund to the Debt Service Fund as required herein, the Trustee shall determine the value of all cash and Permitted Investments held in the Series 2017 Debt Service Reserve Fund. All such Permitted Investments shall be valued pursuant to Section 502. If the value so determined exceeds the Series 2017 Debt Service Reserve Fund Requirement, the excess shall as promptly as practical be transferred to Debt Service Fund pursuant to Section 502. If the value so determined is less than the Series 2017 Debt Service Reserve Fund Requirement, the Trustee shall immediately notify the City of the amount necessary to restore the balance in the Series 2017 Debt Service Reserve Fund to the Series 2017 Debt Service Reserve Fund Requirement, and the Trustee shall direct the City to restore the deficiency in 12 equal monthly payments beginning not later than the first Business Day of the next calendar month, subject to the limitations on such funding contained in Section 3.5 of the Financing Agreement. (c) After payment or provision for payment in full of the principal of and interest on the Series 2017 Bonds, and the fees, charges and expenses of the Trustee and any Paying Agents and any other amounts required to be paid under this Indenture and the Financing Agreement, all amounts remaining in the Series 2017 Debt Service Reserve Fund shall be paid to the City. Section 407. Payments Due on Saturdays, Sundays and Holidays. In any case where the date of maturity of principal of, redemption premium, if any, or interest on the Bonds or the date fixed for redemption of any Bonds shall be a day other than a Business Day, then payment of principal, redemption premium, if any, or interest need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date. Section 408. Nonpresentment of Bonds. In the event any Bond shall not be presented for payment when the principal thereof becomes due, either at maturity or otherwise, or at the date fixed for redemption thereof, if funds sufficient to pay such Bond shall have been made available to the Trustee, all liability of the Authority to the owner thereof for the payment of such Bond, shall forthwith cease, determine -22- and be completely discharged, and thereupon it shall be the duty of the Trustee to hold such funds in trust in a separate trust account, without liability for interest thereon, for the benefit of the owner of such Bond, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Indenture or on or with respect to said Bond. If any Bond shall not be presented for payment within four years following the date when such Bond becomes due, whether by maturity or otherwise, the Trustee shall repay jointly to the City the funds theretofore held by it for payment of such Bond without liability for interest thereon, and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the City, and the owner thereof shall be entitled to look only to the City for payment, and then only to the extent of the amount so repaid, and the City shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Section 409. Records and Reports of Trustee. The Trustee agrees to maintain such records with respect to any and all moneys or investments held by the Trustee pursuant to the provisions of this Indenture as are requested by the Authority. The Trustee shall furnish to the Authority and the City, monthly on the tenth Business Day after the end of each calendar month, a report on the status of each of the funds and accounts established under this Article which are held by the Trustee, showing the balance in each such fund or account as of the first day of the preceding month, the total of deposits to and the total of disbursements from each such fund or account, the dates of such deposits and disbursements, and the balance in each such fund or account on the last day of the preceding month. The Trustee shall render an annual accounting for each Fiscal Year ending June 30 to the Authority, the City and any Bondowner at the expense of such Bondowner requesting the same, showing in reasonable detail all financial transactions relating to the Trust Estate during the accounting period, including investment earnings and the balance in any funds or accounts created by this Indenture as of the beginning and close of such accounting period. ARTICLE V SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS Section 501. Moneys to be Held in Trust. All moneys deposited with or paid to the Trustee for the funds and accounts held under this Indenture, and all moneys deposited with or paid to any Paying Agent under any provision of this Indenture shall be held by the Trustee or Paying Agent in trust and shall be applied only in accordance with the provisions of this Indenture and the Financing Agreement, and, until used or applied as herein provided, shall (except for moneys in the Rebate Fund) constitute part of the Trust Estate and be subject to the lien, terms and provisions hereof and shall not be commingled with any other funds of the Authority or the City except as provided under Section 502 hereof for investment purposes. Neither the Trustee nor any Paying Agent shall be under any liability for interest on any moneys received hereunder except to the extent such moneys are invested in Permitted Investments. Section 502. Investment of Moneys. Moneys held in each of the funds and accounts under this Indenture shall, pursuant to written directions of the City Representative, be invested and reinvested by the Trustee in accordance with the provisions ofthis Indenture and the Tax Compliance Agreement in Permitted Investments which mature or are subject to redemption by the owner thereof prior to the date such funds are expected to be needed. The Trustee may rely upon the written directions of the City Representative as to the suitability and legality of the directed investment. In the absence of direction from the City Representative, the moneys held in each of the funds and accounts under this Indenture shall be invested and reinvested in Permitted Investments of the type described in paragraph (7) of the definition thereof. The Trustee may make any investments permitted by the provisions of this Section through its own bond department or short-term investment department or that of any affiliate of the Trustee and may pool moneys for investment purposes, except moneys held in any fund or account that are required to be yield restricted -23- in accordance with the Tax Compliance Agreement, which shall be invested separately. Any such Permitted Investments shall be held by or under the control of the Trustee and shall be deemed at all times a part of the fund or account in which such moneys are originally held. The interest accruing on each fund or account and any profit realized from such Permitted Investments (other than any amount required to be deposited in the Rebate Fund pursuant to Section 404 hereof) shall be credited to such fund or account, and any loss resulting from such Permitted Investments shall be charged to such fund or account; provided that if the most recent valuation of the amount invested in the Series 2017 Debt Service Reserve Fund equals or exceeds the Series 2017 Debt Service Reserve Requirement then all interest accruing thereon shall be automatically deposited into the Debt Service Fund. The Trustee shall sell or present for redemption and reduce to cash a sufficient amount of such Permitted Investments whenever it shall be necessary to provide moneys in any fund or account for the purposes of such fund or account and the Trustee shall not be liable for any loss resulting from such investments. In determining the balance in any Fund (other than the Series 2017 Debt Service Reserve Fund), investments in such Fund shall be valued at the lower of their original cost or their fair market value as of the most recent interest payment date. Permitted Investments in the Series 2017 Debt Service Reserve Fund shall be valued at fair market value, exclusive of accrued interest. Investments in the Funds under this Indenture shall be valued on each May 1 and November 1 in each year beginning May 1, 2018. ARTICLE VI GENERAL COVENANTS AND PROVISIONS Section 601. Authority to Issue Bonds and Execute Indenture. The Authority covenants that it is duly authorized under the Constitution and laws of the State of Missouri to execute this Indenture, to issue the Bonds and to pledge and assign the Trust Estate in the manner and to the extent herein set forth; that all action on its part for the execution and delivery of this Indenture and the issuance of the Bonds has been duly and effectively taken; and that the Bonds in the hands of the owners thereof are and will be valid and enforceable obligations of the Authority according to the import thereof, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights to the extent applicable and their enforcement may be subject to the exercise of judicial discretion in appropriate cases. Section 602. Limited Obligations. The Bonds and the interest thereon shall be special, limited obligations of the Authority payable (except to the extent paid out of Bond proceeds or the income from the temporary investment thereof and under certain circumstances from insurance proceeds and condemnation awards) solely out of the Financing Payments and other payments derived by the Authority under the Financing Agreement (except for fees and expenses payable to the Authority, the Authority's right to indemnification as set forth in the Financing Agreement and as otherwise expressly set forth therein), and are secured by a transfer, pledge and assignment of and a grant of a security interest in the Trust Estate to the Trustee and in favor of the owners of the Bonds, as provided in this Indenture. The Bonds and interest thereon shall not be deemed to constitute a debt or liability of the State of Missouri or of any political subdivision or body politic thereof, including the City, within the meaning of any state constitutional provision or statutory limitation, and shall not constitute a pledge of the full faith and credit of the State of Missouri or of any political subdivision or body politic thereof, including the City, but shall be payable solely from the funds provided for in the Financing Agreement and in this Indenture. The issuance of the Bonds shall not, directly, indirectly or contingently, obligate the State of Missouri or any political subdivision or body politic thereof, including the City, to levy any form of taxation therefor or to make any appropriation for their payment. The State of Missouri shall not in any event be liable for the payment of the principal of, redemption premium, if any, or interest on the Bonds or for the performance of any pledge, mortgage, obligation or agreement of any kind whatsoever which may be undertaken by the -24- Authority. No breach by the Authority of any such pledge, mortgage, obligation or agreement may impose any liability, pecuniary or otherwise, upon the State of Missouri or any charge upon its general credit or against its taxing power. The Authority has no power to tax. Section 603. Payment of Bonds. The Authority shall duly and punctually pay, but solely from the sources specified in this Indenture, the principal of, redemption premium, if any, and interest on the Bonds in accordance with the terms of the Bonds and this Indenture. Section 604. Performance of Covenants. The Authority shall (to the extent within its control) faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Indenture, in the Bonds and in all proceedings pertaining thereto. Section 605. Inspection of Books. The Authority covenants and agrees that all books and documents in its possession relating to the Bonds, this Indenture and the Financing Agreement, and the transactions relating thereto shall at all reasonable times be open to inspection by the Trustee, the City and such accountants or other agencies as the Trustee or the City may from time to time designate. The Trustee covenants and agrees that all books and documents in its possession relating to the Bonds, this Indenture and the Financing Agreement, and the transactions relating thereto, including financial statements of the City, shall be open to inspection by the Authority during business hours upon reasonable notice. Section 606. Enforcement of Rights. The Authority agrees that the Trustee, as assignee, transferee, pledgee, and owner of a security interest under this Indenture in its name or in the name of the Authority may enforce all rights of the Authority and the Trustee and all obligations of the City under and pursuant to the Financing Agreement and any other Transaction Documents for and on behalf of the Bondowners, whether or not the Authority is in default hereunder. The Financing Agreement and all other Transaction Documents shall be delivered to and held by the Trustee. Section 607. Amendments to the Financing Agreement. The Financing Agreement may only be supplemented or amended by Supplemental Financing Agreements executed by the Authority and the City as provided in Article XI of the Financing Agreement. Section 608. Tax Covenants. The Authority (to the extent within its power or direction) shall not use or permit the use of any proceeds of Bonds or any other funds of the Authority, directly or indirectly, in any manner, and shall not take or permit to be taken any other action or actions, which would cause the interest on any Bond to be included in gross income for federal income tax purposes. The Authority agrees that so long as any of the Bonds remain Outstanding, it will comply with the provisions of the Tax Compliance Agreement applicable to the Authority. The Trustee agrees to comply with its duties as set forth in the provisions of the Tax Compliance Agreement, and upon receipt of the Tax Compliance Agreement and any Opinion of Bond Counsel which sets forth such requirements, to comply with the written directions of an Opinion of Counsel relating to any statute, regulation or ruling that may apply to it as Trustee hereunder and relating to reporting requirements or other requirements necessary to preserve the exclusion from federal gross income of the interest on the Bonds. The Trustee from time to time, upon receipt of a written request of the Authority, may cause a firm of attorneys, consultants or independent accountants or an investment banking firm (as selected by the Authority) to supply the Authority, with such information as Authority may request in order to determine in a manner reasonably satisfactory to the Authority, all matters relating to (a) the actuarial yields on the Bonds as the same may relate to any data or conclusions necessary to verify that the Bonds are not "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code, and (b) compliance with rebate -25- requirements of Section 148(f) of the Internal Revenue Code. Payment for fees, charges, costs and expenses incurred in connection with supplying the foregoing information shall be paid by the City. The foregoing covenants of this Section shall remain in full force and effect notwithstanding the defeasance of the Bonds pursuant to Article X of this Indenture or any other provision of this Indenture, until the final maturity date of all Bonds Outstanding and payment thereof. Section 609. Certain Information and Opinions to be Provided to the Authority. The Trustee shall deliver to the Authority, promptly upon its written request to the Trustee, copies of the financial statements and other information on file with the Trustee, that have been delivered to the Trustee pursuant to Section 6.1 of the Financing Agreement. Each Opinion of Bond Counsel required to be addressed and delivered to the Trustee under any provision of this Indenture shall also be addressed and delivered to the Authority. Section 610. Continuing Disclosure. Pursuant to Section 6.3 of the Financing Agreement, the City has undertaken all responsibility for compliance with continuing disclosure requirements, and the Authority shall have no liability to the owners of the Bonds or any other person with respect to S.E.C. Rule 15c2-12. Notwithstanding any other provision of this Indenture, failure of the City or the Trustee to comply with the Continuing Disclosure Agreement shall not constitute an Event of Default; however, the Trustee may (and, at the request of the Original Purchaser or the owners of at least 25% aggregate principal amount of Outstanding Series 2017 Bonds, having been indemnified in accordance with Section 802(e), shall), or any Bondowner or Beneficial Owner may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under the Continuing Disclosure Agreement. For purposes of this Section, "Beneficial Owner" means any Person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2017 Bonds (including Persons holding Series 2017 Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series 2017 Bonds for federal income tax purposes. ARTICLE VII DEFAULT AND REMEDIES Section 701. Events of Default. The term "event of default," wherever used in this Indenture, means any one of the following events (whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) default in the payment of any interest on any Bond when such interest becomes due and payable; or (b) default in the payment of the principal of (or premium, if any, on) any Bond when the same becomes due and payable (whether at maturity, upon proceedings for redemption, by acceleration or otherwise); or (c) default in the performance, or breach, of any covenant or agreement of the Authority in this Indenture (other than a covenant or agreement a default in the performance or breach of which is specifically dealt with elsewhere in this Section), and continuance of such default or breach for a period of 60 days after there has been given to the Authority and the City by the Trustee or to the Authority and the City and the Trustee by the owners of at least 10% in principal amount of the Bonds Outstanding, a written notice specifying such default or breach and requiring -26- it to be remedied; provided, that if such default cannot be fully remedied within such 60 -day period, but can reasonably be expected to be fully remedied, such default shall not constitute an event of default if the Authority shall immediately upon receipt of such notice commence the curing of such default and shall thereafter prosecute and complete the same with due diligence and dispatch; or (d) any event of default under the Financing Agreement shall occur and is continuing and has not been waived. With regard to any alleged default concerning which notice is given to the City under the provisions of this Section, the Authority hereby grants the City full authority for the account of the Authority to perform any covenant or obligation, the nonperformance of which is alleged in said notice to constitute a default, in the name and stead of the Authority, with full power to do any and all things and acts to the same extent that the Authority could do and perform any such things and acts in order to remedy such default. Section 702. Acceleration of Maturity; Rescission and Annulment. If an event of default occurs and is continuing, the Trustee may, and shall, if requested by the owners of not less than 25% in principal amount of the Bonds Outstanding, by written notice to the Authority and the City, declare the principal of all Bonds Outstanding and the interest accrued thereon to be due and payable, and upon any such declaration such principal and interest shall become immediately due and payable. At any time after such a declaration of acceleration has been made, but before any judgment or decree for payment of money due on any Bonds has been obtained by the Trustee as provided in this Article, the owners of a majority in principal amount of the Bonds Outstanding may, by written notice to the Authority, the City and the Trustee, rescind and annul such declaration and its consequences if: (a) the Authority has deposited with the Trustee a sum sufficient to pay (1) all overdue installments of interest on all Bonds, (2) the principal of (and premium, if any, on) any Bonds which have become due otherwise than by such declaration of acceleration and interest thereon at the rate prescribed therefor in the Bonds, (3) interest upon overdue installments of interest at the rate prescribed therefor in the Bonds, and (4) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (b) all events of default, other than the non-payment of the principal of Bonds which have become due solely by such declaration of acceleration, have been cured or have been waived as provided in Section 710 of this Indenture. No such rescission and annulment shall affect any subsequent default or impair any right consequent thereon. Section 703. Exercise of Remedies by the Trustee. Upon the occurrence and continuance of any event of default under this Indenture, unless the same is waived as provided in this Indenture, the Trustee shall have the following rights and remedies, in addition to any other rights and remedies provided under this Indenture or by law: -27- (a) Right to Bring Suit, Etc. The Trustee may pursue any available remedy at law or in equity by suit, action, mandamus or other proceeding to enforce the payment of the principal of, premium, if any, and interest on the Bonds Outstanding, including interest on overdue principal (and premium, if any) and on overdue installments of interest, and any other sums due under this Indenture, to realize on or to foreclose any of its interests or liens under this Indenture or any other Transaction Document, to enforce and compel the performance of the duties and obligations of the Authority as set forth in this Indenture and to enforce or preserve any other rights or interests of the Trustee under this Indenture with respect to any of the Trust Estate or otherwise existing at law or in equity. (b) Exercise of Remedies at Direction of Bondowners. If requested in writing to do so by the owners of not less than 25% in principal amount of Bonds Outstanding and if indemnified as provided in Section 802(e) of this Indenture, the Trustee shall be obligated to exercise such one or more of the rights and remedies conferred by this Article as the Trustee shall deem most expedient in the interests of the Bondowners. (c) Appointment of Receiver. Upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Bondowners under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Trust Estate, pending such proceedings, with such powers as the court making such appointment shall confer. (d) Suits to Protect the Trust Estate. The Trustee shall have power to institute and to maintain such proceedings as it may deem expedient to prevent any impairment of the Trust Estate by any acts which may be unlawful or in violation of this Indenture and to protect its interests and the interests of the Bondowners in the Trust Estate, including power to institute and maintain proceedings to restrain the enforcement of or compliance with any governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement of or compliance with such enactment, rule or order would impair the security under this Indenture or be prejudicial to the interests of the Bondowners or the Trustee, or to intervene (subject to the approval of a court of competent jurisdiction) on behalf of the Bondowners in any judicial proceeding to which the Authority or the City is a party and which in the judgment of the Trustee has a substantial bearing on the interests of the Bondowners. (e) Enforcement Without Possession of Bonds. All rights of action under this Indenture or any of the Bonds may be enforced and prosecuted by the Trustee without the possession of any of the Bonds or the production thereof in any suit or other proceeding relating thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust. Any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and subject to the provisions of Section 707 hereof, be for the equal and ratable benefit of the owners of the Bonds in respect of which such judgment has been recovered. (f) Restoration of Positions. If the Trustee or any Bondowner has instituted any proceeding to enforce any right or remedy under this Indenture by suit, foreclosure, the appointment of a receiver, or otherwise, and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Bondowner, then and in every case the Authority, the City, the Trustee and the Bondowners shall, subject to any determination in such proceeding, be restored to their former positions and rights under this Indenture, and thereafter all IMM rights and remedies of the Trustee and the Bondowners shall continue as though no such proceeding had been instituted. Section 704. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Authority or any other obligor upon the Bonds or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Bonds shall then be due and payable, as therein expressed or by declaration or otherwise, and irrespective of whether the Trustee shall have made any demand on the Authority for the payment of overdue principal, premium or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (a) to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Outstanding Bonds and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Bondowners allowed in such judicial proceeding, and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Bondowner to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Bondowners, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 804. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Bondowner any plan of reorganization, arrangement, adjustment or composition affecting the Bonds or the rights of any owner thereof, or to authorize the Trustee to vote in respect of the claim of any Bondowner in any such proceeding. Section 705. Limitation on Suits by Bondowners. No owner of any Bond shall have any right to institute any proceeding, judicial or otherwise, under or with respect to this Indenture, or for the appointment of a receiver or trustee or for any other remedy under this Indenture, unless: (a) such owner has previously given written notice to the Trustee of a continuing event of default; (b) the owners of not less than 25% in principal amount of the Bonds Outstanding shall have made written request to the Trustee to institute proceedings in respect of such event of default in its own name as Trustee under this Indenture; (c) such owner or owners have offered to the Trustee indemnity as provided in Sections 802(e), 802(k) and 804 of this Indenture against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and -29- (e) no direction inconsistent with such written request has been given to the Trustee during such 60 -day period by the owners of a majority in principal amount of the Outstanding Bonds; it being understood and intended that no one or more owners of Bonds shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the lien of this Indenture or the rights of any other owners of Bonds, or to obtain or to seek to obtain priority or preference over any other owners or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all Outstanding Bonds. Notwithstanding the foregoing or any other provision in this Indenture, however, the owner of any Bond shall have the right which is absolute and unconditional to receive payment of the principal of (and premium, if any) and interest on such Bond on the respective stated maturities expressed in such Bond (or, in the case of redemption, on the redemption date) and nothing contained in this Indenture shall affect or impair the right of any owner to institute suit for the enforcement of any such payment. Section 706. Control of Proceedings by Bondowners. The owners of a majority in principal amount of the Bonds Outstanding shall have the right, during the continuance of an event of default, provided indemnity has been provided to the Trustee in accordance with Sections 802(e), 802(k) and 804: (a) to require the Trustee to proceed to enforce this Indenture, either by judicial proceedings for the enforcement of the payment of the Bonds and the foreclosure of this Indenture, or otherwise; and (b) to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture, provided that (1) such direction shall not be in conflict with any rule of law or this Indenture, (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, and (3) the Trustee shall not determine that the action so directed would be unjustly prejudicial to the owners not taking part in such direction. Section 707. Application of Moneys Collected. Any moneys collected by the Trustee pursuant to this Article (after the deductions for payment of costs and expenses of proceedings resulting in the collection of such moneys) together with any other sums then held by the Trustee as part of the Trust Estate, shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Bonds and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: (a) First: To the payment of all unpaid amounts due the Trustee under Section 804 of this Indenture; (b) Second: To the payment of the whole amount then due and unpaid upon the Outstanding Bonds for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected, with interest (to the extent that such interest has been collected by the Trustee or a sum sufficient therefor has been so collected and payment thereof -30- is legally enforceable at the respective rate or rates prescribed therefor in the Bonds) on overdue principal (and premium, if any) and on overdue installments of interest; and in case such proceeds shall be insufficient to pay in full the whole amount so due and unpaid upon such Bonds, then to the payment of such principal and interest, without any preference or priority, ratably according to the aggregate amount so due; and (c) Third: To the payment of the remainder, if any, to the Authority or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct. Whenever moneys are to be applied by the Trustee pursuant to the provisions of this Section, such moneys shall be applied by it at such times, and from time to time, as the Trustee shall determine, having due regard for the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such moneys, it shall fix the date (which shall be an interest payment date unless it shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date, in accordance with Section 204 hereof, and shall not be required to make payment to the owner of any unpaid Bond until such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid. Section 708. Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Trustee or to the Bondowners is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 709. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any owner of any Bond to exercise any right or remedy accruing upon an event of default shall impair any such right or remedy or constitute a waiver of any such event of default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee, or to the Bondowners may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Bondowners, as the case may be. Section 710. Waiver of Past Defaults. Before any judgment or decree for payment of money due has been obtained by the Trustee as provided in this Article, the owners of a majority in principal amount of the Bonds Outstanding may, by written notice delivered to the Trustee and the Authority, on behalf of the owners of all the Bonds waive any past default hereunder and its consequences, except a default (a) in the payment of the principal of (or premium, if any) or interest on any Bond, or (b) in respect of a covenant or provision hereof which under Article IX cannot be modified or amended without the consent of the owner of each Outstanding Bond affected. Upon any such waiver, such default shall cease to exist, and any event of default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to or affect any subsequent or other default or impair any right or remedy consequent thereon. -31- ARTICLE VIII THE TRUSTEE Section 801. Acceptance of Trusts; Certain Duties and Responsibilities. The Trustee accepts and agrees to execute the trusts imposed upon it by this Indenture, but only upon the following terms and conditions: (a) Except during the continuance of an event of default, (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. (b) 1 If an event of default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of its own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that (1) this subsection shall not be construed to limit the effect of subsection (a) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by an authorized officer of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the owners of a majority in principal amount of the Outstanding Bonds relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture; and (4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or conveying rights and duties or affording protection to the Trustee, whether in its capacity as Trustee, Paying Agent, bond registrar or any other capacity, shall be subject to the provisions of this Article VIII. Section 802. Certain Rights of Trustee. Except as otherwise provided in Section 801 of this Indenture: -32- (a) The Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) The Trustee shall be entitled to rely upon an Officer's Certificate as to the sufficiency of any request or direction of the City mentioned herein, the existence or non-existence of any fact or the sufficiency or validity of any instrument, paper or proceeding, or that a resolution in the form therein set forth has been adopted by the governing body of the City has been duly adopted, and is in full force and effect; (c) Whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer's Certificate; (d) The Trustee may consult with counsel, and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by the Trustee hereunder in good faith and in reliance thereon; (e) Notwithstanding anything in this Indenture to the contrary, the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture whether at the request or direction of any of the Bondowners pursuant to this Indenture or otherwise, unless such Bondowners or other party shall have offered to the Trustee reasonable security or indemnity against the fees, advances, costs, expenses and liabilities (except as may result from the Trustee's own negligence or willful misconduct), including, without limitation, such fees, advances, costs, expenses and liabilities associated with environmental contamination and the clean-up thereof, which might be incurred by it in connection with such rights or powers; (f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Authority, personally or by agent or attorney; (g) The Trustee assumes no responsibility for the correctness of the recitals contained in this Indenture and in the Bonds, except the certificate of authentication on the Bonds. The Trustee makes no representations to the value or condition of the Trust Estate or any part thereof, or as to the title thereto or as to the security afforded thereby or hereby, or as to the validity or sufficiency of this Indenture or of the Bonds. The Trustee shall not be accountable for the use or application by the Authority or the City of any of the Bonds or the proceeds thereof or of any money paid to or upon the order of the Authority or the City under any provision of this Indenture; (h) The Trustee, in its individual or any other capacity, may become the owner or pledgee of Bonds and may otherwise deal with the Authority and the City with the same rights it would have if it were not Trustee; -33- (i) All money received by the Trustee shall, until used or applied or invested as herein provided, be held in trust for the purposes for which they were received. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law or by this Indenture. The Trustee shall be under no liability for interest on any money received by it hereunder except as to investments authorized and directed pursuant to Section 502 of this Indenture; 0) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (k) Notwithstanding anything elsewhere in this Indenture contained, before taking any action under this Indenture, the Trustee may require that satisfactory indemnity be furnished to it for the reimbursement of all reasonable costs and expenses to which it may be put and to protect it against all liability which it may incur in or by reason of such action; (1) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and the Trustee shall not be answerable for other than its negligence or its willful misconduct; and (m) The Trustee shall not be required to give any bond or security in respect of the execution of the said trusts and powers or otherwise in respect to the premises. Section 803. Notice of Defaults. The Trustee shall not be required to take notice or be deemed to have notice of any default hereunder except failure by the Authority to cause to be made any of the payments to the Trustee required to be made by Article IV of this Indenture, unless the Trustee shall be specifically notified in writing of such default by the Authority, the City or the owners of at least 10% in principal amount of all Bonds Outstanding, and in the absence of such notice so delivered, the Trustee may conclusively assume there is no default except as aforesaid. Within 30 days after the Trustee has received notice of any event of default or the occurrence of any event of default hereunder of which the Trustee is deemed to have notice the Trustee shall give written notice of such event of default by mail to the Authority, the City and all owners of Bonds as shown on the bond register maintained by the Trustee, unless such event of default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Bond, the Trustee shall be protected in withholding such notice if and so long as the Trustee in good faith determines that the withholding of such notice is in the interests of the Bondowners. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an event of default as defined in Section 801. Section 804. Compensation and Reimbursement. The Trustee shall be entitled to payment or reimbursement, as follows: (a) from time to time for reasonable compensation for all ordinary services rendered by it hereunder and extra reasonable compensation for any extraordinary services rendered (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, upon its request, for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and -34- disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to the Trustee's negligence or bad faith; and (c) indemnification for any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust, including the fees, costs and expenses of its agents and counsel in defending itself against any action, suit, demand, judgment, claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. As contemplated under the Financing Agreement, all such payments and reimbursements shall be made by the City with interest at the rate of interest per annum equal to the Prime Rate plus 2%. The Trustee shall promptly notify the City in writing of any claim or action brought against the Trustee in respect of which indemnity may be sought against the City, setting forth the particulars of such claim or action, and the City will assume the defense thereof, including the employment of counsel satisfactory to the Trustee and the payment of all expenses. The Trustee may employ separate counsel in any such action and participate in the defense thereof, and the reasonable fees and expenses of such counsel shall not be payable by the City unless such employment has been specifically authorized by the City, or the City fails, in the judgment of the Trustee, to employ competent counsel, and such counsel fails to actively defend such action and protect the interests of the Trustee or Bondowners. Pursuant to the provisions of the Financing Agreement, the City has agreed to pay to the Trustee all reasonable fees, charges, advances and expenses, including, without limitation, its agents and counsel, of the Trustee, and the Trustee agrees to look only to the City for the payment of all reasonable fees, charges, advances and expenses of the Trustee and any Paying Agent as provided in the Financing Agreement. The Trustee agrees that the Authority shall have no liability for any fees, charges and expenses of the Trustee. As security for the payment of such compensation, expenses, reimbursements and indemnity under this Section, the Trustee shall be secured under this Indenture by a first lien prior to the Bonds, and shall have the right to use and apply any trust moneys held by it under Article 1V hereof. Section 805. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be a bank or trust company organized and doing business under the laws of the United States of America or of any state thereof, authorized under such laws to exercise corporate trust powers, subject to supervision or examination by federal or state authority, and having a combined capital and surplus of at least $25,000,000. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of such supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect specified in this Article. Section 806. Resignation and Removal of Trustee. (a) The Trustee may resign at any time by giving written notice thereof to the Authority, the City and each owner of Bonds Outstanding as shown by the list of Bondowners required by this Indenture to be kept at the office of the Trustee. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. -35- (b) If the Trustee has actual knowledge that it has or shall acquire any conflicting interest, it shall, within 90 days after ascertaining that it has a conflicting interest, or within 30 days after receiving written notice from the Authority or the City (so long as the City is not in default under the Financing Agreement) that it has a conflicting interest, either eliminate such conflicting interest or resign in the manner and with the effect specified in subsection (a). (c) The Trustee may be removed at any time by an instrument or concurrent instruments in writing delivered to the Authority and the Trustee signed by the owners of a majority in principal amount of the Outstanding Bonds, or, so long as the City is not in default and no condition that with the giving of notice or passage of time, or both, would constitute a default by the City under the Financing Agreement. The Authority, the City or any Bondowner may at any time petition any court of competent jurisdiction for the removal for cause of the Trustee. (d) If at any time: (1) the Trustee shall fail to comply with subsection (b) after written request therefor by the Authority or the City, or (2) the Trustee shall cease to be eligible under Section 805 and shall fail to resign after written request therefor by the Authority or by any Bondowner, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (A) the Authority may remove the Trustee, or (B) the City or any Bondowner may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (e) The Trustee shall give notice at the expense of the City of each resignation and each removal of the Trustee and each appointment of a successor Trustee by mailing written notice of such event by first-class mail, postage prepaid, to the Authority, the City and the registered owners of Bonds as their names and addresses appear in the bond register maintained by the Trustee. Each notice shall include the name of the successor Trustee and the address of its principal corporate trust office. (f) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 808. Section 807. Appointment of Successor Trustee. If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Authority, with the written consent of the City if no event of default under the Financing Agreement has occurred and is continuing (which consent shall not be unreasonably withheld), or the owners of a majority in principal amount of Bonds Outstanding (if an event of default hereunder or under the Financing Agreement has occurred and is continuing), by an instrument or concurrent instruments in writing delivered to the Authority and the retiring Trustee, shall promptly appoint a successor Trustee. In case all or substantially all of the Trust Estate shall be in the possession of a receiver or trustee lawfully appointed, such receiver or trustee, by written instrument, may similarly appoint a temporary successor to fill such vacancy until a new Trustee shall be so appointed by the Authority or the Bondowners. If, within 30 days after such resignation, removal or incapability or the occurrence of such vacancy, a successor Trustee shall be appointed in the manner herein provided, the successor Trustee so appointed shall, forthwith upon its acceptance of such -36- appointment, become the successor Trustee and supersede the retiring Trustee and any temporary successor Trustee appointed by such receiver or trustee. If no successor Trustee shall have been so appointed and accepted appointment in the manner herein provided, any Bondowner may petition any court of competent jurisdiction for the appointment of a successor Trustee, until a successor shall have been appointed as above provided. The successor so appointed by such court shall immediately and without further act be superseded by any successor appointed as above provided. Every such successor Trustee appointed pursuant to the provisions of this Section shall be a bank or trust company in good standing under the law of the jurisdiction in which it was created and by which it exists, meeting the eligibility requirements of this Article. Section 808. Acceptance of Appointment by Successor. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Authority and to the retiring Trustee an instrument accepting such appointment, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the estates, properties, rights, powers, trusts and duties of the retiring Trustee and the duties and obligations of the retiring Trustee shall cease and terminate; but, on request of the Authority or the successor Trustee, such retiring Trustee shall, upon payment of its charges, fees, costs and expenses, including its agents and counsel, execute and deliver an instrument conveying and transferring to such successor Trustee upon the trusts herein expressed all the estates, properties, rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder, subject nevertheless to its lien, if any, provided for in Section 804. Upon request of any such successor Trustee, the Authority shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such estates, properties, rights, powers and trusts. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. Section 809. Merger, Consolidation and Succession to Business. Any corporation or association into which the Trustee may be merged or with which it may be consolidated, or any corporation or association resulting from any merger or consolidation to which the Trustee shall be a party, or any corporation or association succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation or association shall be otherwise qualified and eligible under this Article, and shall be vested with all of the title to the whole property or Trust Estate and all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Bonds shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger or consolidation to such authenticating Trustee may adopt such authentication and deliver the Bonds so authenticated with the same effect as if such successor Trustee had itself authenticated such Bonds. Section 810. Co -Trustees and Separate Trustees. At any time or times, for the purpose of meeting the legal requirements of any jurisdiction in which any of the Trust Estate may at the time be located, or in the enforcement of any default or the exercise any of the powers, rights or remedies herein granted to the Trustee, or any other action which may be desirable or necessary in connection therewith, the Trustee shall have power to appoint, and, upon the written request of the Trustee or of the owners of at least 25% in principal amount of the Bonds Outstanding, the Authority shall for such purpose join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Trustee either to act as co -trustee, jointly with the Trustee, of all or any part of the Trust Estate, or to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such person or persons in the capacity aforesaid, any property, title, protection, immunity, right or power deemed necessary or -37- desirable, subject to the other provisions of this Section. If the Authority does not join in such appointment within 15 days after the receipt by it of a request so to do, or in case an event of default has occurred and is continuing, the Trustee alone shall have power to make such appointment. Should any written instrument from the Authority be required by any co -trustee or separate trustee so appointed for more fully confirming to such co -trustee or separate trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Authority. Every co -trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely: (a) The Bonds shall be authenticated and delivered, and all rights, powers, duties and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder, shall be exercised solely, by the Trustee; (b) The rights, powers, duties and obligations hereby conferred or imposed upon the Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Trustee or by the Trustee and such co -trustee or separate trustee jointly, as shall be provided in the instrument appointing such co -trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co -trustee or separate trustee; (c) The Trustee at any time, by an instrument in writing executed by it, with the concurrence of the Authority evidenced by a resolution, may accept the resignation of or remove any co -trustee or separate trustee appointed under this Section, and, in case an event of default has occurred and is continuing, the Trustee shall have power to accept the resignation of, or remove, any such co -trustee or separate trustee without the concurrence of the Authority. Upon the written request of the Trustee, the Authority shall join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co -trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section; (d) No co -trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Trustee, or any other such trustee hereunder; and (e) Any request, demand, authorization, direction, notice, consent, waiver or other act of Bondowners delivered to the Trustee shall be deemed to have been delivered to each such co - trustee and separate trustee. Section 811. Designation of Paying Agents. The Trustee is hereby designated and agrees to act as principal Paying Agent for and in respect to the Bonds. The Authority may, in its discretion, cause the necessary arrangements to be made through the Trustee and to be thereafter continued for the designation of alternate Paying Agents, if any, and for the making available of funds hereunder for the payment of the principal of, premium, if any, and interest on the Bonds of any series, or at the principal corporate trust office of said alternate Paying Agents. In the event of a change in the office of Trustee, the predecessor Trustee which has resigned or been removed shall cease to be trustee of any funds provided hereunder and Paying Agent for principal of, premium, if any, and interest on the Bonds, and the successor -38- Trustee shall become such Trustee and Paying Agent unless a separate Paying Agent or Agents are appointed by the Authority in connection with the appointment of any successor Trustee. Section 812. Advances by Trustee. If the City shall fail to make any payment or perform any of its covenants in the Financing Agreement, the Trustee may, at any time and from time to time, use and apply any moneys held by it under this Indenture, or make advances, to effect payment or performance of any such covenant on behalf of the City. All moneys so used or advanced by the Trustee, together with interest at the Prime Rate plus 2% per annum, shall be repaid by the City upon demand and such advances shall be secured under this Indenture prior to the Bonds. For the repayment of all such advances the Trustee shall have the right to use and apply any moneys at any time held by it under this Indenture but no such use of moneys or advance shall relieve the City from any default under the Financing Agreement. ARTICLE IX SUPPLEMENTAL INDENTURES Section 901. Supplemental Indentures without Consent of Bondowners. Without the consent of the owners of any Bonds, the Authority and the Trustee may from time to time enter into one or more Supplemental Indentures for any of the following purposes: (a) to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property; or (b) to add to the conditions, limitations and restrictions on the authorized amount, terms or purposes of issue, authentication and delivery of Bonds or of any series of Bonds, as herein set forth, additional conditions, limitations and restrictions thereafter to be observed; or (c) to authorize the issuance of any series of Additional Bonds and make such other provisions as provided in Section 203; or (d) to evidence the appointment of a separate trustee or the succession of a new trustee under this Indenture; or (e) to add to the covenants of the Authority or to the rights, powers and remedies of the Trustee for the benefit of the owners of all Bonds or to surrender any right or power herein conferred upon the Authority; or (f) to cure any ambiguity, to correct or supplement any provision in this Indenture which may be inconsistent with any other provision herein or to make any other change, with respect to matters or questions arising under this Indenture, which shall not be inconsistent with the provisions of this Indenture, provided such action shall not materially adversely affect the interests of the owners of the Bonds; or (g) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the Trust Indenture Act of 1939, as amended, or under any similar federal statute hereafter enacted, or to permit the qualification of the Bonds for sale under the securities laws of the United States or any state of the United States. -39- Section 902. Supplemental Indentures with Consent of Bondowners. With the consent of the owners of not less than a majority in principal amount of the Bonds then Outstanding affected by such Supplemental Indenture, the Authority and the Trustee may enter into one or more Supplemental Indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the owners of the Bonds under this Indenture; provided, however, that no such Supplemental Indenture shall, without the consent of the owner of each Outstanding Bond affected thereby, (a) change the stated maturity of the principal of, or any installment of interest on, any Bond, or reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or change any place of payment where (except as may be required in connection with the appointment of a successor Trustee), or the coin or currency in which, any Bond, or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the stated maturity thereof (or, in the case of redemption, on or after the redemption date); or (b) reduce the percentage in principal amount of the Outstanding Bonds, the consent of whose owners is required for any such Supplemental Indenture, or the consent of whose owners is required for any waiver provided for in this Indenture of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences; or (c) modify the obligation of the Authority to make payment on or provide funds for the payment of any Bond; or (d) modify any of the provisions of this Section or Section 710, except to increase any percentage provided thereby or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the owner of each Bond affected thereby; or (e) permit the creation of any lien ranking prior to or, except with respect to any Additional Bonds, on a parity with the lien of this Indenture with respect to any of the Trust Estate or terminate the lien of this Indenture on any property at any time subject hereto or deprive the owner of any Bond of the security afforded by the lien of this Indenture. The Trustee may in its discretion determine (which determination may be based upon the advice or opinion of counsel) whether or not any Bonds would be affected by any Supplemental Indenture and any such determination shall be conclusive upon the owners of all Bonds, whether theretofore or thereafter authenticated and delivered hereunder. The Trustee shall not be liable for any such determination made in good faith. It shall not be necessary for the required percentage of owners of Bonds under this Section to approve the particular form of any proposed Supplemental Indenture, but it shall be sufficient if such act shall approve the substance thereof. Section 903. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any Supplemental Indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and, subject to Article VIII, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such Supplemental Indenture is authorized and permitted by and in compliance with the terms of this Indenture and that the execution and delivery thereof will not adversely affect the exclusion from federal gross income of interest on the Bonds. The Trustee may, but shall not be obligated to, enter into any such Supplemental Indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. .M Section 904. Effect of Supplemental Indentures. Upon the execution of any Supplemental Indenture under this Article, this Indenture shall be modified in accordance therewith and such Supplemental Indenture shall form a part of this Indenture for all purposes; and every owner of Bonds theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Section 905. Reference in Bonds to Supplemental Indentures. Bonds authenticated and delivered after the execution of any Supplemental Indenture pursuant to this Article may, and if required by the Trustee shall, bear a notation in form approved by the Trustee as to any matter provided for in such Supplemental Indenture. If the Authority shall so determine, new Bonds so modified as to conform, in the opinion of the Trustee and the Authority, to any such Supplemental Indenture may be prepared and executed by the Authority and authenticated and delivered by the Trustee in exchange for Outstanding Bonds. Section 906. City Consent to Supplemental Indentures. So long as the City is not in default under the Financing Agreement, a Supplemental Indenture under this Article which affects any rights of the City will not become effective unless and until the City consents in writing to the execution and delivery of such Supplemental Indenture; provided that receipt by the Trustee of a Supplemental Financing Agreement executed by the City in connection with the issuance of Additional Bonds shall be deemed to be the consent of the City to the execution of the related Supplemental Indenture. ARTICLE X SATISFACTION AND DISCHARGE Section 1001. Payment, Discharge and Defeasance of Bonds. Bonds will be deemed to be paid and discharged and no longer Outstanding under this Indenture and will cease to be entitled to any lien, benefit or security of this Indenture if the Authority shall pay or provide for the payment of such Bonds in any one or more of the following ways: (a) by paying or causing to be paid the principal of (including redemption premium, if any) and interest on such Bonds, as and when the same become due and payable; (b) by delivering such Bonds to the Trustee for cancellation; or (c) by depositing in trust with the Trustee or other Paying Agent moneys and Defeasance Obligations in an amount, together with the income or increment to accrue thereon, without consideration of any reinvestment thereof, sufficient to pay or redeem (when redeemable) and discharge the indebtedness on such Bonds at or before their respective maturity or redemption dates (including the payment of the principal of, premium, if any, and interest payable on such Bonds to the maturity or redemption date thereof); provided that, if any such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption is given in accordance with the requirements of this Indenture or provision satisfactory to the Trustee is made for the giving of such notice. The Bonds may be defeased in advance of their maturity or redemption dates only with cash or Defeasance Obligations pursuant to subsection (c) above, subject to receipt by the Trustee of (1) a verification report prepared by independent certified public accountants, or other verification agent and (2) an Opinion of Bond Counsel addressed and delivered to the Trustee and the Authority to the effect that the payment of the principal of and redemption premium, if any, and interest on all of the Bonds then Outstanding and any and all other amounts required to be paid under the provisions of this Indenture has -41- been provided for in the manner set forth in this Indenture and to the effect that so providing for the payment of any Bonds will not cause the interest on the Bonds to be included in gross income for federal income tax purposes, notwithstanding the satisfaction and discharge of this Indenture. The foregoing notwithstanding, the liability of the Authority in respect of such Bonds shall continue, but the owners thereof shall thereafter be entitled to payment only out of the moneys and Defeasance Obligations deposited with the Trustee as aforesaid. Moneys and Defeasance Obligations so deposited with the Trustee pursuant to this Section shall not be a part of the Trust Estate but shall constitute a separate trust fund for the benefit of the Persons entitled thereto. Such moneys and Defeasance Obligations shall be applied by the Trustee to the payment (either directly or through any Paying Agent, as the Trustee may determine) to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such moneys and Defeasance Obligations have been deposited with the Trustee. Section 1002. Satisfaction and Discharge of Indenture. This Indenture and the lien, rights and interests created by this Indenture shall cease, determine and become null and void (except as to any surviving rights pursuant to Section 1003 hereof) if the following conditions are met: (a) the principal of, premium, if any, and interest on all Bonds has been paid or is deemed to be paid and discharged by meeting the conditions of Section 1001; (b) all other sums payable under this Indenture with respect to the Bonds are paid or provision satisfactory to the Trustee is made for such payment; (c) the Trustee receives an Opinion of Bond Counsel (which may be based upon a ruling or rulings of the Internal Revenue Service) to the effect that so providing for the payment of any Bonds will not cause the interest on the Bonds to be included in gross income for federal income tax purposes, notwithstanding the satisfaction and discharge of this Indenture; (d) the Trustee receives an Opinion of Counsel to the effect that all conditions precedent in this Section to the satisfaction and discharge of this Indenture have been complied with; and (e) if such Bonds are to be redeemed or final payment is to occur on a date which is more than 90 days from the date of the deposit under this Section, the Authority and the City shall have received (1) the report of a verification agent acceptable to and addressed to each of them, confirming the mathematical accuracy of the calculations used to determine the sufficiency of the moneys or Defeasance Obligations; and (2) the escrow deposit agreement Thereupon, the Trustee shall execute and deliver to the Authority a termination statement and such instruments of satisfaction and discharge of this Indenture as may be necessary at the written request of the Authority, and shall pay, assign, transfer and deliver to the Authority, or other Persons entitled thereto, all moneys, securities and other property then held by it under this Indenture as a part of the Trust Estate, other than moneys or Defeasance Obligations held in trust by the Trustee as herein provided for the payment of the principal of, premium, if any, and interest on the Bonds. Section 1003. Rights Retained After Discharge. Notwithstanding the satisfaction and discharge of this Indenture, the rights of the Trustee under Section 804 shall survive, and the Trustee shall retain such rights, powers and duties under this Indenture as may be necessary and convenient for the payment of amounts due or to become due on the Bonds and the registration, transfer and exchange of -42- Bonds as provided herein. Nevertheless, any moneys held by the Trustee or any Paying Agent for the payment of the principal of, redemption premium, if any, or interest on any Bond remaining unclaimed for four years after the principal of all Bonds has become due and payable, whether at maturity or upon proceedings for redemption or by declaration as provided herein, shall then be paid to the City without liability for interest thereon, and the owners of any Bonds not theretofore presented for payment shall thereafter be entitled to look only to the City for payment thereof and all liability of the Trustee or any Paying Agent or the Authority with respect to such moneys shall thereupon cease. ARTICLE XI NOTICES, CONSENTS AND OTHER ACTS Section 1101. Notices. Except as otherwise provided herein, it shall be sufficient service of any notice, request, demand, authorization, direction, consent, waiver or other paper required or permitted by this Indenture to be made, given or furnished to or filed with the following Persons upon receipt by such Person, if the same shall be delivered in person or duly mailed by registered or certified mail, postage prepaid, return receipt requested, at the following addresses: (a) To the Authority at: The Industrial Development Authority of the City of Riverside, Missouri c/o City of Riverside, Missouri 2950 NW Vivion Road Riverside, Missouri 64150 Attention: President (b) To the Trustee at: UMB Bank, N.A., as Trustee 1010 Grand Boulevard, 4t" Floor Kansas City, Missouri 64106 Attention: Corporate Trust Department (c) To the City at: City of Riverside, Missouri City Hall 2950 NW Vivion Road Riverside, Missouri 64150 Attention: Director of Finance (d) To the Original Purchaser: Stifel, Nicolaus & Company, Incorporated 501 N. Broadway St. Louis, Missouri 63102 Attention: Public Finance Department A copy of the form of any notice from the Trustee to the Bondowners shall be given by the Trustee to the Authority and the City. -43- If, because of the temporary or permanent suspension of mail service or for any other reason, it is impossible or impractical to mail any notice in the manner herein provided, then such delivery of notice in lieu thereof as shall be made with the approval of the Trustee shall constitute a sufficient notice. Notice to Bondowners shall be given by first class mail at the address of the Bondowners as shown on the bond register maintained by the Trustee, and neither the failure to receive such notice, nor any defect in any notice so mailed, shall affect the sufficiency of such notice. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Bondowners shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Section 1102. Acts of Bondowners. Any notice, request, demand, authorization, direction, consent, waiver or other action provided by this Indenture to be given or taken by Bondowners may be embodied in and evidenced by one or more substantially concurrent instruments of similar tenor signed by such Bondowners in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee, and, where it is hereby expressly required, to the Authority and the City. Proof of execution of any such instrument or of a writing appointing any such agent, or of the ownership of Bonds other than the assignment of the ownership of a Bond, shall be sufficient for any purpose of this Indenture and conclusive in favor of the Authority and the Trustee, if made in the following manner: (a) The fact and date of the execution by any Person of any such instrument or writing may be proved by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof, or by the affidavit of a witness of such execution. Whenever such execution is by an officer of a corporation or a member of a partnership on behalf of such corporation or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority. (b) The fact and date of execution of any such instrument or writing and the authority of any Person executing the same may also be proved in any other manner which the Trustee deems sufficient; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section. (c) The ownership of Bonds and the amount or amounts, numbers and other identification of such Bonds, and the date of holding the same, shall be proved by the bond register maintained by the Trustee. In determining whether the owners of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Bonds registered on the bond register in the name of the Authority or the City shall be disregarded and deemed not to be Outstanding, except that in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Authority or the City has identified in writing to the Trustee as being owned by the Authority or the City or an affiliate thereof shall be so disregarded. Any notice, request, demand, authorization, direction, consent, waiver or other action by the owner of any Bond shall bind every future owner of the same Bond and the owner of every Bond issued upon the transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in reliance thereon, whether or not notation of such action is made upon such Bond. Section 1103. Form and Contents of Documents Delivered to Trustee. Whenever several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to the other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Authority may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Authority stating that the information with respect to such factual matters is in the possession of the Authority, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Whenever any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Wherever in this Indenture, in connection with any application or certificate or report to the Trustee, it is provided that the Authority shall deliver any document as a condition of the granting of such application, or as evidence of the Authority's compliance with any term hereof, it is intended that the Trustee may rely upon the truth and accuracy of the facts and opinions stated in such document. Section 1104. Compliance Certificates and Opinions. Upon any application or request by the Authority to the Trustee to take any action under any provision of this Indenture, the Authority shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of counsel rendering such opinion all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (a) a statement that each individual signing such certificate or opinion has read such condition or covenant and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such condition or covenant has been complied with; and -45- Trustee. (d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. The Trustee may rely upon any such Officer's Certificate or Opinion of Counsel furnished to the ARTICLE IOII MISCELLANEOUS PROVISIONS Section 1201. Further Assurances. The Authority shall do, execute, acknowledge and deliver such Supplemental Indentures and such further acts, instruments, financing statements and assurances as the Trustee may reasonably require for accomplishing the purposes of this Indenture. Section 1202. Immunity of Officers, Directors, Employees and Members of Authority. No recourse shall be had for the payment of the principal of or redemption premium, if any, or interest on any of the Bonds or for any claim based thereon or upon any obligation, covenant or agreement contained in this Indenture against any past, present or future officer, director, member, employee or agent of the Authority, or of any successor public corporation, either directly or through the Authority or any successor public corporation, under any rule of law or equity, statute or constitution; or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such officers, directors, members, employees or agents as such is hereby expressly waived and released as a condition of and consideration for the execution of this Indenture and the issuance of Bonds. Section 1203. Limitation on Authority Obligations. Any other term or provision in this Indenture or in any other Transaction Documents or elsewhere to the contrary notwithstanding: (a) Any and all obligations (including without limitation, fees, claims, demands, payments, damages, liabilities, penalties, assessments and the like) of or imposed upon the Authority or its members, officers, agents, employees, representatives, advisors or assigns, whether under this Indenture or any of the other Transaction Documents or elsewhere and whether arising out of or based upon a claim or claims of tort, contract, misrepresentation, or any other or additional legal theory or theories whatsoever (collectively the "Obligations"), shall in all events be absolutely limited obligations and liabilities, payable solely out of the following, if any, available at the time the Obligation in question is asserted: (1) Bond proceeds and investments therefrom; and (2) Payments derived from the Bonds, this Indenture (including the Trust Estate to the extent provided in this Indenture), the Financing Agreement (except for the fees and expenses of the Authority and the Authority's right to indemnification under the Financing Agreement under certain circumstances and as otherwise expressly set forth therein); (the above provisions (1) and (2) being collectively referred to as the "exclusive sources of the Obligations"). (b) The Obligations shall not be deemed to constitute a debt or liability of the State of Missouri or of any political subdivision thereof within the meaning of any state constitutional provision or statutory limitation and shall not constitute a pledge of the full faith and credit of the -46- State of Missouri or of any political subdivision thereof, but shall be payable solely from and out of the exclusive sources of the Obligations and shall otherwise impose no liability whatsoever, primary or otherwise, upon the State of Missouri or any political subdivision thereof or any charge upon their general credit or taxing power. (c) In no event shall any member, officer, agent, employee, representative or advisor of the Authority, or any successor or assign of any such person or entity, be liable, personally or otherwise, for any Obligation. (d) In no event shall this Indenture be construed as: (1) depriving the Authority of any right or privilege; or (2) requiring the Authority or any member, officer, agent, employee, representative or advisor of the Authority to take or omit to take, or to permit or suffer the taking of, any action by itself or by anyone else; which deprivation or requirement would violate or result in the Authority's being in violation of the Act or any other applicable state or federal law. Section 1204. Benefit of Indenture. This Indenture shall inure to the benefit of and shall be binding upon the Authority and the Trustee and their respective successors and assigns, subject, however, to the limitations contained herein. With the exception of rights expressly conferred in this Indenture, nothing in this Indenture or in the Bonds, express or implied, shall give to any Person, other than the parties hereto and their successors and assigns hereunder, any separate trustee or co -trustee appointed under Section 810 and the owners of Outstanding Bonds, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 1205. No Pecuniary Liability. All covenants, obligations and agreements of the City herein shall be effective to the extent authorized and permitted by law. No such covenant, obligation or agreement herein shall be deemed to be a covenant, obligation or agreement of any present or future councilmember, commissioner, director, officer, agent or employee of the City other than in their official capacity. Section 1206. Severability. If any provision in this Indenture or in the Bonds shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 1207. Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Section 1208. Governing Law. This Indenture shall be governed by and construed in accordance with the laws of the State of Missouri. Section 1209. Electronic Transactions. The transaction described herein may be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. -47- IN WITNESS WHEREOF, the Authority and the Trustee have caused this Bond Trust Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, by their duly authorized officers, all as of the day and year first above written. By: secietary AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI f I By: Leland Finley, President Bond Trust Indenture The Industrial Development Authority of the City of Riverside, Missouri (Riverside Horizons Infrastructure Project), Series 2017 M ATTEST: By: 1, Name: TorriWiegand Title: Assistant Secretary UMB BANE, N.A., as Trustee By: Name: Douglas H, Vre Title: Senior Vice President Bond frust Indenture The Industrial Development Authority of the City of Riverside. Missouri (Riverside Horizons Infrastructure Pr(nect), Series 2017 M EXHIBIT A TO BOND TRUST INDENTURE (FORM OF SERIES 2017 BONDS) UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. Registered No. R - UNITED STATES OF AMERICA STATE OF MISSOURI THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI INDUSTRIAL DEVELOPMENT REVENUE REFUNDING BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT) SERIES 2017 Registered Interest Rate Maturity Date Dated Date CUSIP _% November _, 2017 Registered Owner: CEDE & CO. Taxpayer I.D. No. 13-2555119 Principal Amount: DOLLARS THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI, a body politic and corporate and a public instrumentality (the "Authority"), for value received, promises to pay, but solely from the sources herein specified to the registered owner named above, or registered assigns, the principal amount stated above on the maturity date stated above, except as the provisions herein set forth with respect to redemption prior to maturity may become applicable hereto, and in like manner to pay interest on said principal amount at the interest rate per annum stated above (computed on the basis of a 360 -day year of twelve 30 -day months) from the date of Bonds stated above or from the A-1 most recent interest payment date to which interest has been paid or duly provided for, payable semi- annually on each May 1 and November 1, beginning on May 1, 2018, until said principal amount is paid. Method and Place of Payment. The principal of and interest on this Bond shall be payable in any coin or currency of the United States of American which on the respective dates of payment thereof is legal tender for the payment of public and private debts. The principal of and redemption premium, if any, on this Bond shall be payable by check or draft to the registered owner at the maturity or redemption date upon presentation and surrender of this Bond at the principal corporate trust office of UMB BANK, N.A., in the City of Kansas City, Missouri (the "Trustee"). The interest payable on this Bond on any interest payment date shall be paid by the Trustee to the registered owner of this Bond appearing on the bond register maintained by the Trustee at the close of business on the Record Date 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 and shall be paid by (1) check or draft of the Trustee mailed to such registered owner at his address as it appears on such bond register or at such other address furnished in writing by such registered owner to the Trustee, or (2) at the written request addressed to the Trustee by any registered owner of Bonds in the aggregate principal amount of at least $1,000,000, by electronic transfer to the bank for credit to the ABA routing number and account number filed with the Trustee no later than 15 days preceding the Record Date. Any such written notice for electronic transfer shall be signed by such owner and shall include the name of the bank, its address, its ABA routing number and the name, number and contact name related to such owner's account at such bank to which the payment is to be credited. Limited Obligations. The Bonds and the interest thereon are special, limited obligations of the Authority payable solely out of Financing Payments (as defined in the Indenture) derived by the Authority under the Financing Agreement and are secured by a pledge and assignment of such Financing Payments and other funds as provided in the Indenture. The Bonds shall not be deemed to constitute a debt or liability of the State of Missouri or of any political subdivision thereof within the meaning of any state constitutional provision or statutory limitation and shall not constitute a pledge of the full faith and credit of the State of Missouri or of any political subdivision thereof, but shall be payable solely from the funds provided for in the Financing Agreement and the Indenture. The issuance of the Bonds shall not directly or indirectly obligate the State of Missouri, any political subdivision thereof, the Authority or its officers, directors or employees to provide any funds for the payment of such Bonds. The issuance of the Bonds shall not, directly, indirectly or contingently, obligate the State of Missouri or any political subdivision thereof to levy any form of taxation therefor or to make any appropriation for their payment. The State of Missouri shall not in any event be liable for the payment of the principal of, premium, if any, or interest on the Bonds or for the performance of any pledge, mortgage, obligation or agreement of any kind whatsoever which may be undertaken by the Authority. No breach by the Authority of any such pledge, mortgage, obligation or agreement may impose any liability, pecuniary or otherwise, upon the State of Missouri or any charge upon its general credit or its taxing power. The Authority has no power to tax. Authorization of Bonds. This Bond is one of a duly authorized series of bonds of the Authority designated "Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017," in the aggregate principal amount of $18,370,000 (the "Bonds"), issued pursuant to the authority of and in full compliance with the Constitution and statutes of the State of Missouri, including particularly Chapter 349, as amended, and pursuant to proceedings duly had by the Authority. The Bonds are issued under and are equally and ratably secured and entitled to the protection given by a Bond Trust Indenture dated as of November 1, 2017 (said Bond Trust Indenture, as amended and supplemented from time to time in accordance with the provisions thereof, herein called the "Indenture"), between the Authority and the Trustee, for the purpose of making funds available to the City of Riverside, Missouri (the "City") to provide funds for the purposes described in the Indenture. The funds will be made available pursuant to a Financing Agreement dated as of November 1, 2017 (said Financing Agreement, as amended and supplemented from time to time in accordance with the provisions thereof, herein called the "Financing Agreement"), between the Authority and the City. Under the Indenture, the Authority has pledged and assigned certain of its rights under the Financing Agreement, including the right to receive all Financing Payments thereunder, to the Trustee as security for the Bonds. Reference is hereby made to the Indenture for a description of the property pledged and assigned thereunder, and the provisions, among others, with respect to the nature and extent of the security for the Bonds, and the rights, duties and obligations of the Authority, the Trustee and the registered owners of the Bonds, and a description of the terms upon which the Bonds are issued and secured, upon which provision for payment of the Bonds or portions thereof and defeasance of the lien of the Indenture with respect thereto may be made and upon which the Indenture may be deemed satisfied and discharged prior to payment of the Bonds. Under the circumstances and upon satisfaction of the conditions set forth in the Indenture, additional bonds, on a parity with the Bonds, may be issued. Redemption Prior to Maturity. The Bonds are not subject to optional or mandatory redemption prior to maturity. Book -Entry System. 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 Indenture. One Bond certificate with respect to each date on which the Bonds are stated to mature or with respect to each form of Bonds, registered in the nominee name of the Securities Depository, is being issued and required to be deposited with the Securities Depository and immobilized in its custody or in the custody of the Trustee as the Securities Depository's "FAST" agent. The book -entry system will evidence positions held in the Bonds by the Securities Depository's participants, beneficial ownership of the Bonds in authorized denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The Authority and the Trustee will recognize the Securities Depository nominee, while the registered owner of this Bond, as the owner of this Bond for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Bond, (ii) notices and (iii) voting. Transfer of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfer of principal, interest and any redemption premium payments to beneficial owners of the Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The Authority and the Trustee will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Bond, notwithstanding the provision hereinabove contained, payments of principal of, redemption premium, if any, and interest on this Bond shall be made in accordance with existing arrangements among the Authority, the Trustee and the Securities Depository. Transfer and Exchange. EXCEPT AS OTHERWISE PROVIDED IN THE INDENTURE, THIS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. This Bond may be transferred or exchanged, as provided in the Indenture, only upon the bond register maintained by the Trustee at the above-mentioned office of the Trustee by the registered owner hereof in person or by his duly authorized attorney, upon surrender of this Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his duly authorized attorney, and thereupon a new Bond or Bonds of the same maturity and in the same aggregate principal amount, shall be issued to the transferee in exchange therefor as provided in the Indenture, and upon payment of the charges therein prescribed. The Authority, the Trustee and any Paying Agent may deem and treat the person in whose name this Bond is registered on the bond register maintained by the Trustee as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal A-3 or redemption price hereof and interest due hereon and for all other purposes. The Bonds are issuable in the form of fully registered Bonds without coupons in the denominations of $5,000 or any integral multiple thereof. Limitation on Rights. The registered owner of this Bond shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any event of default under the Indenture, or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture. In certain events, on the conditions, in the manner and with the effect set forth in the Indenture, the principal of all the Bonds issued under the Indenture and then outstanding may become or may be declared due and payable before the stated maturity thereof, together with interest accrued thereon. The Bonds or the Indenture may be modified, amended or supplemented only to the extent and in the circumstances permitted by the Indenture. Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the Certificate of Authentication hereon shall have been executed by the Trustee. IT IS HEREBY CERTIFIED AND DECLARED that all acts, conditions and things required to exist, happen and be performed precedent to and in the execution and delivery of the Indenture and the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law. A-4 IN WITNESS WHEREOF, THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI has caused this Bond to be executed in its name by the manual or facsimile signature of its President or Vice President and attested by the manual or facsimile signature of its Secretary or an Assistant Secretary and its corporate seal to be affixed or imprinted hereon, all as of the Dated Date specified above. CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within mentioned Indenture. Date of Authentication: UMB BANK, N.A., Trustee am Authorized Signature us THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI By: [SEAL] ATTEST: By: President Secretary ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please Print or Typewrite Name, Address and Social Security Number or Taxpayer Identification Number of Transferee) the within Bond and all rights 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: A-6 NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever. Signature Guaranteed By: (Name of Eligible Guarantor Institution as defined by SEC Rule 17 Ad -15 (17 CFR 240.17 Ad -15)) By: _ Title: LEGAL OPINION The following is a true and correct copy of the legal opinion of Gilmore & Bell, P.C., Kansas City, Missouri, on the within Bond and the series of which said Bond is a part, which opinion was manually executed and was dated and issued as of the date of delivery of and payment for such Bonds. GILMORE & BELL, P.C. 2405 Grand Boulevard, Suite 1100 Kansas City, Missouri 64108 (Opinion of Bond Counsel) F.WA EXHIBIT B TO BOND TRUST INDENTURE Date: DISBURSEMENT REQUEST (§ 402 - COSTS OF ISSUANCE FUND) (Series 2017 Costs of Issuance Account) To: UMB Bank, N.A., as Trustee Corporate Trust Department Kansas City, Missouri Request No: Re: The Industrial Development Authority of the City of Riverside, Missouri, Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017 You are hereby requested and directed as Trustee under the Bond Trust Indenture dated as of November 1, 2017 (the "Indenture"), between The Industrial Development Authority of the City of Riverside, Missouri and you, as Trustee, to pay from moneys in the Costs of Issuance Fund, pursuant to Section 402 of the Indenture, to the following payees the following amounts for the following Costs of Issuance (as defined in the Indenture): Payee Amount Description of Costs of Issuance [[See attached schedule]] The undersigned City Representative hereby states and certifies that each item listed above is a proper Cost of Issuance (as defined in the Indenture) that was incurred in connection with the issuance of the above -referenced Bonds, and the amount of this request is justly due and owing and has not been the subject of another requisition which was paid. CITY OF RIVERSIDE, MISSOURI City Representative THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI, As Authority CITY OF RIVERSIDE, MISSOURI, As City FINANCING AGREEMENT Dated as of November 1, 2017 Relating to $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 Certain rights, title and interest of The Industrial Development Authority of the City of Riverside, Missouri in this Financing Agreement have been pledged and assigned to UMB Bank, N.A., Kansas City, Missouri, as Trustee under a Bond Trust Indenture dated as of November 1, 2017, between the Authority and the Trustee. Section 1.1. Section 1.2. FINANCING AGREEMENT TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Definitions of Words and Terms.......................................................................................2 Rules of Interpretation......................................................................................................3 ARTICLE H REPRESENTATIONS Section 2.1. Representations by the Authority......................................................................................3 Section 2.2. Representations and Covenants by the City......................................................................3 Section 2.3. Survival of Representations..............................................................................................4 ARTICLE III THE FINANCING; PAYMENT OF THE SERIES 2017 BONDS; ISSUANCE OF THE SERIES 2017 BONDS Section 3.1. Amount and Source of the Financing; Issuance of Bonds................................................4 Section3.2. Financing Payments..........................................................................................................5 Section 3.3. Credits on Financing Payments........................................................................................5 Section 3.4. Additional Payments.........................................................................................................6 Section 3.5. Annual Appropriations......................................................................................................7 Section 3.6. Annual Budget Request....................................................................................................7 Section 3.7. Financing Payments to Constitute Current Expenses of the City .....................................7 ARTICLE IV SECURITY FOR THE FINANCING Section 4.1. Security for the Financing.................................................................................................8 I:�.4 M Is) 61 D•I TERM Section 5.1. Term of Financing Agreement..........................................................................................8 (i) ARTICLE VI GENERAL COVENANTS AND PROVISIONS Section 6.1. Information. Provided to the Authority and the Trustee...................................................9 Section6.2. Indemnification.................................................................................................................9 Section 6.3. Continuing Disclosure....................................................................................................10 ARTICLE VII ADDITIONAL BONDS Section 7.1. Additional Bonds............................................................................................................10 ARTICLE VIII ASSIGNMENT OF BOARD'S RIGHTS UNDER FINANCING AGREEMENT Section 8.1. Assignment by the Authority..........................................................................................1 l Section 8.2. Restriction on Transfer of Authority's Rights................................................................. 11 ARTICLE IX EVENTS OF DEFAULT AND REMEDIES Section 9.1. Events of Default Defined.............................................................................................. I 1 Section 9.2. Remedies on Default....................................................................................................... 11 Section 9.3. No Remedy Exclusive.....................................................................................................12 Section 9.4. Agreement to Pay Attorneys' Fees and Expenses...........................................................13 Section 9.5. Authority and City to Give Notice of Default.................................................................13 Section 9.6. Performance of the City's Obligations............................................................................13 Section 9.7. Remedial Rights Assigned to the Trustee.......................................................................13 ARTICLE X PREPAYMENT AND ACCELERATION OF FINANCING PAYMENTS Section 10.3 Right to Prepay at Any Time...........................................................................................13 Section10.4. Notice of Prepayment.....................................................................................................13 Section 10.5. Precedence of this Article...............................................................................................14 ARTICLE XI SUPPLEMENTAL FINANCING AGREEMENTS Section 11.1. Supplemental Financing Agreements without Consent of Bondowners ....................................................................................................................................14 Section 11.2. Supplemental Financing Agreements with Consent of Bondowners..............................14 Section 11.3. Execution of Supplemental Financing Agreements........................................................15 Section 11.4. Effect of Supplemental Financing Agreements...............................................................15 Section 11.5. Reference in Bonds to Supplemental Financing Agreements.........................................15 ARTICLE ISI MISCELLANEOUS Section 12.1. Authorized Representatives............................................................................................16 Section12.2. Notices............................................................................................................................16 Section 12.3. Performance Date Not a Business Day...........................................................................16 Section 12.4. Binding Effect.................................................................................................................16 Section 12.5. Execution in Counterparts...............................................................................................16 Section 12.6. No Pecuniary Liability....................................................................................................16 Section 12.7. Extent of Covenants of the Authority; No Personal or Pecuniary Liability.......................................................................................................................16 Section12.8. Net Financing..................................................................................................................17 Section12.9. Complete Agreement......................................................................................................17 Section12.10. Severability.....................................................................................................................17 Section12.11. Governing Law...............................................................................................................17 Section 12.12. Third Party Beneficiaries................................................................................................17 Section 12.13. Electronic Transactions...................................................................................................17 Signaturesand Seals..................................................................................................... S-1 FINANCING AGREEMENT THIS FINANCING AGREEMENT, dated as of November 1, 2017 ("Financing Agreement"), between THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI, a body corporate and politic organized and existing under the laws of the State of Missouri (the "Authority"), and the CITY OF RIVERSIDE, MISSOURI, a city of the fourth class and political subdivision of the State of Missouri (the "City"); WITNESSETH: WHEREAS, the Authority is authorized and empowered under Chapter 349 of the Revised Statutes of Missouri, as amended ("Act"), to issue revenue bonds for the purpose of providing funds to finance and refinance the costs of certain "projects" as defined in the Act (which includes "public facilities" as defined in the Act) and to pay certain costs related to the issuance of such revenue bonds; and WHEREAS, the Authority has previously issued its (i) Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007A, issued in the original principal amount of $30,265,000 and (ii) Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007B, issued in the original principal amount of $10,000,000 (collectively, the "Refunded Bonds"); and WHEREAS, the proceeds of the Refunded Bonds were used to fund certain infrastructure costs (the "Project") related to the redevelopment of an approximately 1,800 acre area in the City (the "Redevelopment Area") on the north bank of the Missouri River pursuant to a redevelopment plan (the "Redevelopment Plan") adopted by the City under the provisions of the Real Property Tax Increment Allocation Redevelopment Act, Sections 99.800 et seq. of the Revised Statutes of Missouri, as amended (the "TIF Act"): and WHEREAS, the City has requested that the Authority assist in the refinancing of the Project through the issuance of the Authority's Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017, in the original principal amount of $18,370,000 (the "Series 2017 Bonds"); and WHEREAS, the governing body of the Authority adopted a resolution on October 3, 2017, authorizing the Authority to issue the Series 2017 Bonds pursuant to the Bond Trust Indenture dated of even date herewith (the "Indenture"), between the Authority and UMB Bank, N.A., as trustee for the Series 2017 Bonds (the "Trustee"); and WHEREAS, pursuant to such resolution, the Authority is authorized (a) to execute and deliver the Indenture for the purpose of issuing and securing the Series 2017 Bonds, (b) to enter into this Financing Agreement, under which the Authority will make the proceeds of the Series 2017 Bonds available to the City in accordance with the provisions of this Financing Agreement to provide funds to refinance the Project and refund and redeem the Refunded Bonds, in consideration of payments to be made by the City to the Trustee which are to be sufficient to pay the principal of, redemption premium, if any, and interest on the Series 2017 Bonds as the same become due; and WHEREAS, the City, by Ordinance No. 1565 passed by the Board of Aldermen on October 17, 2017, approved the issuance of the Series 2017 Bonds and the execution and delivery of certain documents, including this Financing Agreement; and WHEREAS, pursuant to the foregoing, the Authority desires to loan the proceeds of the Series 2017 Bonds to the City, and the City desires to borrow the proceeds of the Series 2017 Bonds from the Authority, to be repaid by the City upon the terms and conditions hereinafter set forth, all for the purpose of providing funds to, together with other available moneys, (a) refinance the Project by refunding and redeeming the Refunded Bonds, (b) fund a Debt Service Reserve Fund for the Series 2017 Bonds, and (c) pay certain costs related to the issuance of the Series 2017 Bonds; and NOW, THEREFORE, in consideration of the premises and the mutual representations, covenants and agreements herein contained, the Authority and the City, do hereby represent, covenant and agree as follows: ARTICLE I DEFINITIONS Section 1.1. Definitions of Words and Terms. In addition to any words and terms defined elsewhere in this Financing Agreement and the words and terms defined in Section 101 of the Indenture, which definitions are hereby incorporated herein by reference, and terms defined, the following words and terms as used in this Financing Agreement shall have the following meanings: "Economic Activity Tax Revenues" means the revenues attributable to 50% of the increase in tax revenues (other than real property tax revenues) generated by economic activities within the Redevelopment Area, including sales and utility taxes, but excluding personal property taxes, hotel/motel taxes, licenses, fees and special assessments. "Incremental Tax Revenues" means revenues which consist of (a) PILOTS derived from the Redevelopment Area, (b) Economic Activity Tax Revenues received by the City with respect to the Redevelopment Area and (c) the New State Revenues received by the City with respect to the Redevelopment Area. "New State Revenues" means revenue appropriated each year by the General Assembly of the State of Missouri pursuant to the State Supplemental Tax Increment Financing Program Amended Certificate of Approval. "PILOTS" means those revenues attributable to the increase in the assessed valuation of real property within the Redevelopment Area over and above the initial assessed valuation of real property in the Redevelopment Area as of the date on which tax increment financing for the Redevelopment Area was adopted, which increase is multiplied by the then -current aggregate tax rate applicable to such property to determine the amount of PILOTS due. "Series 2017 Levee District Bonds" means the Levee District Improvement Refunding Bonds (L- 385 Project), Series 2017, issued by the Riverside-Quindaro Bend Levee District of Platte County, Missouri in the original aggregate principal amount of $12,620,000. "Series 2011A Bonds" means the Authority's Tax Increment Refunding Revenue Bonds (L-385 Levee Project), Series 2011A, issued in the original principal amount of $2,385,000. "Series 2014 Bonds" means the Authority's Tax Increment Refunding Revenue Bonds (L-385 Levee Project), Series 2014, issued in the original principal amount of $7,640,000. dZ "Series 2017 Bonds" means the Authority's Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017, issued in the original principal amount of $18,370,000. "Special Allocation Fund" means the fund where the deposits of Incremental Tax Revenues pledged for Financing Payments are held. Section 1.2. Rules of Interpretation. For all purposes of this Financing Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders; (b) Words importing the singular number shall include the plural and vice versa and words importing person shall include firms, associations and corporations, including public bodies, as well as natural persons; (c) The table of contents hereto and the headings and captions herein are not a part of this document; and (d) Terms used in an accounting context and not otherwise defined shall have the meaning ascribed to them by generally accepted principles of accounting. ARTICLE H REPRESENTATIONS Section 2.1. Representations by the Authority. The Authority represents and warrants to the City and the Trustee as follows: (a) Organization and Authority. The Authority (1) is a public body corporate and politic duly organized and existing under the laws of the State of Missouri, and (2) has lawful power and authority to enter into, execute and deliver this Financing Agreement and the Indenture and to carry out its obligations hereunder and thereunder, and (3) by all necessary action has been duly authorized to execute and deliver this Financing Agreement and all Transaction Documents required to be executed and delivered by it in connection with the issuance of the Series 2017 Bonds (collectively, the "Authority Documents"), acting by and through its duly authorized officers; and (b) No Defaults or Violations of Law. The execution and delivery of this Financing Agreement and the other Authority Documents by the Authority will not result in a breach of any of the terms of, or constitute a default under, any indenture, mortgage, deed of trust, lease or other agreement or instrument to which the Authority is a party or by which it or any of its property is bound or its bylaws or any of the constitutional or statutory laws, rules or regulations applicable to the Authority or its property. Section 2.2. Representations and Covenants by the City. The City represents, warrants and covenants to the Authority and the Trustee as follows: -3- (a) Organization and Authority. The City (1) is a city of the fourth class and political subdivision duly organized and validly existing under the laws of the State of Missouri, and (2) has lawful power and authority to enter into, execute and deliver this Financing Agreement and all other Transaction Documents required to be executed and delivered by it in connection with the issuance of the Series 2017 Bonds (collectively, the "City Documents") and to carry out its obligations hereunder and thereunder, and (3) by all necessary action has been duly authorized to execute and deliver this Financing Agreement and the other City Documents, acting by and through its duly authorized officers; (b) No Defaults or Violations of Law. The execution and delivery of this Financing Agreement and the other City Documents by the City will not conflict with or result in a breach of any of the terms of, or constitute a default under, any indenture, mortgage, deed of trust, lease or other agreement or instrument to which the City is a party or by which it or any of its property is bound or any of the laws, rules or regulations applicable to the City or its property; (c) Public Purpose. The City believes that the appropriation of revenues to pay its obligations under this Financing Agreement is an essential public purpose; (d) No Litigation. To the knowledge of the City, there is no litigation or proceeding pending or threatened against the City or any other person affecting the right of the City to execute this Financing Agreement or the other City Documents or the ability of the City to make the Financing Payments or to otherwise comply with the obligations under this Financing Agreement or the other City Documents. Neither the execution and delivery of this Financing Agreement by the City, nor compliance by the City with its obligations under this Financing Agreement require the approval of any regulatory body, or any other entity, which approval has not been obtained; (e) Gaming Revenues. While the Series 2017 Bonds are outstanding, the City will deposit in its general fund amounts received (i) under the lease agreement between the City and Missouri Gaming Company dated June 7, 1993, as amended, and (ii) from the State of Missouri as the City's portion of the gaming tax and admission fees collected by the State of Missouri at the Argosy Casino, to be used by the City upon appropriation by the Board of Aldermen. Section 2.3. Survival of Representations. All representations of the Authority and the City contained in this Financing Agreement or in any certificate or other instrument delivered by any such entity pursuant to this Financing Agreement or any other Transaction Document, or in connection with the transactions contemplated thereby, shall survive the execution and delivery thereof and the issuance, sale and delivery of the Series 2017 Bonds, as representations of facts existing as of the date of execution and delivery of the instruments containing such representations. ARTICLE III THE FINANCING; PAYMENT OF THE SERIES 2017 BONDS; ISSUANCE OF THE SERIES 2017 BONDS Section 3.1. Amount and Source of the Financing; Issuance of Bonds. The Authority agrees to make available to the City, upon the terms and conditions herein and in the Indenture specified, the net proceeds received by the Authority from the sale of the Series 2017 Bonds (the "Financing"). In order to provide funds for the Financing and to finance and refinance the Project, the Authority agrees that it will issue, sell and deliver the Series 2017 Bonds to the Original Purchaser. The proceeds of the sale of the 10 Series 2017 Bonds shall be paid over to the Trustee for the account of the Authority and shall be administered, disbursed and applied for the payment of costs related to the financing and refinancing of the Project and the refunding of the Refunded Bonds and other purposes upon the terms and in the manner as provided in the Indenture and in this Financing Agreement. Section 3.2. Financing Payments. Subject to the limitations on appropriation set forth in Sections 3.5, 3.7 and 4.1 hereof, the City shall pay the following amounts to the Trustee, all as "Financing Payments" under this Financing Agreement: (a) Debt Service Fund — Interest: On or before the third Business Day preceding each May 1 and November 1, commencing on the third Business Day preceding May 1, 2018, an amount which is not less than the interest to become due on the next interest payment date on the Series 2017 Bonds; provided, however that the City may be entitled to certain credits on such payments as permitted under Section 3.3 of this Financing Agreement; (b) Debt Service Fund — Principal: On or before the third Business Day preceding each May 1, commencing on the third Business Day preceding May 1, 2018, an amount which is not less than the next installment of principal due on the Series 2017 Bonds on the next principal payment date by maturity; provided, however, that the City may be entitled to certain credits on such payments as permitted under Section 3.3 of this Financing Agreement; and Notwithstanding any schedule of payments set forth in this Financing Agreement or the Indenture, the City shall make payments hereunder and shall be liable therefor at the times and in the amounts (including interest, principal, and redemption premium, if any) equal to the amounts to be paid as interest, principal and redemption premium, if any, whether at maturity or by optional or mandatory redemption, as applicable, upon all Bonds from time to time Outstanding under the Indenture. Any Supplemental Financing Agreement shall provide for similar deposits into the Debt Service Fund of amounts sufficient to ensure the prompt payment of the principal of, premium, if any, and interest on any Additional Bonds as the same become due. Unpaid Financing Payments shall bear interest at the Prime Rate. Any interest charged and collected on an unpaid Financing Payment shall be deposited to the credit of the Debt Service Fund and applied to pay interest on overdue amounts in accordance with the Indenture. The City and the Authority each acknowledge that they have no interest in the Debt Service Fund, the Rebate Fund, and any moneys deposited therein shall be in the custody of and held by the Trustee in trust for the benefit of the Bondowners and the United States of America as provided in the Indenture. Section 3.3. Credits on Financing Payments. Notwithstanding any provision contained in this Financing Agreement or in the Indenture to the contrary, in addition to any credits on the Financing resulting from the payment or prepayment of Financing Payments from other sources: (a) any moneys deposited (including earnings thereon) by the Trustee in the Debt Service Fund as interest (including moneys received as accrued interest from the sale of the Series 2017 Bonds and any initial deposit of capitalized interest made from the proceeds of the sale of the Series 2017 Bonds) shall be credited against the obligation of the City to pay interest on the Financing as the same becomes due; -5- (b) any moneys deposited (including earnings thereon) by the Trustee in the Debt Service Fund as principal shall be credited against the obligation of the City to pay the principal of the Financing as the same becomes due in the order of maturity thereof; and (c) the amount of any moneys transferred by the Trustee from any other fund held under the Indenture and deposited in the Debt Service Fund as interest or principal shall be credited against the obligation of the City to pay Financing Payments, as the case may be, as the same become due. Section 3.4. Additional Payments. Subject to the limitations of Sections 3.5, 3.7 and 4.1 hereof, the City shall pay the following amounts to the following persons, all as "Additional Payments" under this Financing Agreement: (a) to the Trustee, when due, all reasonable fees and charges for its services rendered under the Indenture, this Financing Agreement and any other Transaction Documents, and all reasonable expenses (including without limitation reasonable fees and charges of any Paying Agent, bond registrar, counsel, accountant, engineer or other person) incurred in the performance of the duties of the Trustee under the Indenture, this Financing Agreement and any other Transaction Documents for which the Trustee and other persons are entitled to repayment or reimbursement; (b) to the Trustee, upon demand, an amount necessary to pay rebatable arbitrage in accordance with the Tax Compliance Agreement and the Indenture; (c) to the Trustee or the party due, upon written demand all other amounts payable in accordance with the Tax Compliance Agreement; (d) to the Authority, on the Bond Issuance Date, its regular administrative and issuance fees and charges, if any, and all expenses (including without limitation attorneys' fees) incurred by the Authority in relation to the transactions contemplated by this Financing Agreement and the Indenture, which are not otherwise to be paid by the City under this Financing Agreement or the Indenture; (e) to the appropriate person, such payments as are required (i) as payment for or reimbursement of any and all reasonable costs, expenses and liabilities incurred by the Authority or the Trustee or any of them in satisfaction of any obligations of the City hereunder that the City does not perform, or incurred in the defense of any action or proceeding with respect to the Project, this Financing Agreement or the Indenture, or (ii) as reimbursement for expenses paid, or as prepayment of expenses to be paid, by the Authority or the Trustee and that are incurred as a result of a request by the City, or a requirement of this Financing Agreement and that the City is not otherwise required to pay under this Financing Agreement; (f) to the Trustee, upon written demand of the Trustee, the amount required by the Indenture, subject to the provisions hereof and of the Indenture, necessary to restore the Series 2017 Debt Service Reserve Fund to an amount equal to the Series 2017 Debt Service Reserve Fund Requirement. If applicable, any Supplemental Financing Agreement shall provide for deposits into the debt service reserve fund(s) for Additional Bonds of amounts sufficient to maintain such fund(s) as required by the Indenture; (g) to the appropriate person, any other amounts required to be paid by the City under this Financing Agreement or the Indenture; and 0 (h) any past due Additional Payments shall continue as an obligation of the City until they are paid and shall bear interest at the Prime Rate plus 2% during the period such Additional Payments remain unpaid. Section 3.5. Annual Appropriations. The City intends, on or before the last day of each Fiscal Year, to budget and appropriate, specifically with respect to this Financing Agreement, moneys sufficient to pay all the Financing Payments and reasonably estimated Additional Payments for the next succeeding Fiscal Year. The City shall deliver written notice to the Trustee no later than 15 days after the commencement of its Fiscal Year stating whether or not the Board of Aldermen has appropriated funds sufficient for the purpose of paying the Financing Payments and reasonably estimated Additional Payments to become due during such Fiscal Year. If the Board of Aldermen shall have made the appropriation necessary to pay the Financing Payments and reasonably estimated Additional Payments to become due during such Fiscal Year, the failure of the City to deliver the foregoing notice on or before the 15th day after the commencement of its Fiscal Year shall not constitute an Event of Nonappropriation and, on failure to receive such notice 15 days after the commencement of the City's Fiscal Year, the Trustee shall request written confirmation from the City of the fact of whether or not such appropriation has been made. If the Board of Aldermen shall not have made the appropriation necessary to pay the Financing Payments and Additional Payments reasonably estimated to become due during such succeeding Fiscal Year, the failure of the City to deliver the foregoing notice on or before the 15' day after the commencement of its Fiscal Year shall constitute an Event of Nonappropriation. Section 3.6. Annual Budget Request. The City Administrator or other officer of the City at any time charged with the responsibility of formulating budget proposals shall include in the budget proposals submitted to the Board of Aldermen, in each Fiscal Year in which this Financing Agreement shall be in effect, an appropriation for all the Financing Payments and reasonably estimated Additional Payments required for the ensuing Fiscal Year; it being the intention of the City that the decision to appropriate or not to appropriate under this Financing Agreement shall be made solely by the Board of Aldermen and not by any other official of the City. The City intends, subject to the provisions above respecting the failure of the City to budget or appropriate funds to make Financing Payments and Additional Payments, to pay the Financing Payments and Additional Payments hereunder. The City reasonably believes that legally available funds in an amount sufficient to make all Financing Payments and Additional Payments during each Fiscal Year can be obtained. The City further intends to do all things lawfully within its power to obtain and maintain funds from which the Financing Payments and Additional Payments may be made, including making provision for such Financing Payments and Additional Payments to the extent necessary in each proposed annual budget submitted for approval in accordance with applicable procedures of the City and to exhaust all available reviews and appeals in the event such portion of the budget is not approved. The City's Director of Finance is directed to do all things lawfully within such person's power to obtain and maintain funds from which the Financing Payments and Additional Payments may be paid, including making provision for such Financing Payments and Additional Payments to the extent necessary in each proposed annual budget submitted for approval or by supplemental appropriation in accordance with applicable procedures of the City and to exhaust all available reviews and appeals in the event such portion of the budget or supplemental appropriation is not approved. Notwithstanding the foregoing, the decision to budget and appropriate funds is to be made in accordance with the City's normal procedures for such decisions. Section 3.7. Financing Payments to Constitute Current Expenses of the City. Except as provided in the second paragraph of Section 4.1, the Authority and the City acknowledge and agree that the Financing Payments and Additional Payments hereunder shall constitute currently budgeted expenditures of the City, and shall not in any way be construed or interpreted as creating a liability or a general obligation or debt of the City in contravention of any applicable constitutional or statutory Q►! limitations or requirements concerning the creation of indebtedness by the City, nor shall anything contained herein constitute a pledge of the general credit, tax revenues, funds or moneys of the City. The City's obligations to pay Financing Payments and Additional Payments hereunder shall be from year to year only, and shall not constitute a mandatory payment obligation of the City in any ensuing Fiscal Year beyond the then current Fiscal Year. Neither this Financing Agreement nor the issuance of the Series 2017 Bonds shall directly or indirectly obligate the City to levy or pledge any form of taxation or make any appropriation or make any payments beyond those appropriated for the City's then current Fiscal Year, but in each Fiscal Year Financing Payments and Additional Payments shall be payable solely from the amounts budgeted or appropriated therefor out of the income and revenue provided for such year, plus any unencumbered balances from previous years; provided, however, that nothing herein shall be construed to limit the rights of the Owners of the Series 2017 Bonds or the Trustee to receive any amounts which may be realized from the Trust Estate pursuant to the Indenture. Failure of the City to budget and appropriate said moneys on or before the last day of any Fiscal Year shall be deemed an Event of Nonappropriation. III Ito) Mno\iI SECURITY FOR THE FINANCING Section 4.1. Security for the Financing. The City's obligations to pay the Financing Payments and Additional Payments described herein and any amounts required to be paid under Section 6.2 or Section 9.4 hereof, as applicable, shall be limited, special obligations of the City payable solely from, and secured as to the payment of principal and interest by, (i) subject to annual appropriation by the City as provided in Section 3.5 hereof, a pledge of all legally available revenues of the City and, (ii) on a subordinate basis (as described below), amounts in the Special Allocation Fund as defined in the Redevelopment Plan, in each case as provided in the Authorizing Ordinance. The taxing power of the City is not pledged to the payment of the Financing Payments or Additional Payments either as to principal or interest. The City's obligation to pay the Financing Payments and Additional Payments shall not constitute general obligations of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional or statutory provision, limitation or restriction. Notwithstanding the foregoing, the Incremental Tax Revenues derived from the Redevelopment Area deposited into the Special Allocation Fund are pledged by the City pursuant to the Authorizing Ordinance to secure the Financing Payments and Additional Payments, which pledge is subordinate to the pledge of such revenues securing the Series 2011A Bonds, the Series 2014 Bonds, the Series 2017 Levee District Bonds and any additional bonds issued under the respective trust indentures related to such bonds (together, the "Senior Obligations"). The "Incremental Tax Revenues" consist of (a) PILOTS derived from the Redevelopment Area, (b) subject to annual appropriation by the City, Economic Activity Tax Revenues received by the City with respect to the Redevelopment Area and (c) the New State Revenues received by the City with respect to the Redevelopment Area. Any moneys and securities in the Special Allocation Fund not required to pay debt service on the Senior Obligations in any year may be used by the City for Financing Payments and Additional Payments. ARTICLE V I D1 la] Section 5.1. Term of Financing Agreement. This Financing Agreement shall be effective from and after its execution and delivery and shall continue in full force and effect until the Bonds are deemed to be paid within the meaning of Article X of the Indenture and provision has been made for paying 52 all other sums payable by the City to the Authority, the Trustee and the Paying Agent for the Bonds under this Financing Agreement and the Indenture. All agreements, covenants, representations and certifications by the City as to all matters affecting the status of the interest on the Series 2017 Bonds shall survive the termination of this Financing Agreement and the defeasance of the Series 2017 Bonds. ARTICLE VI GENERAL COVENANTS AND PROVISIONS Section 6.1. Information Provided to the Authority and the Trustee. The City shall furnish to the Authority and the Trustee written notice of any Event of Nonappropriation as soon as practicable, but in no event more than 5 days after such Event of Nonappropriation. The City will at any and all times, upon the written request of the Trustee or the Authority and at the expense of the City, permit the Trustee and the Authority by their representatives to inspect the properties, books of account, records, reports and other papers of the City, and to take copies and extracts therefrom, and will promptly afford and procure a reasonable opportunity to make any such inspection, and the City will furnish to the Authority and the Trustee any and all information as the Authority or the Trustee may reasonably request with respect to the performance by the City of its covenants in this Financing Agreement. Section 6.2. Indemnification. (a) The City releases the Authority and the Trustee from, agrees that the Authority and the Trustee shall not be liable for, and indemnifies the Authority and the Trustee against, all liabilities, losses, damages (including attorneys' fees), causes of action, suits, claims, costs and expenses, demands and judgments of any nature imposed upon or asserted against the Authority or the Trustee, on account of (i) any breach or default on the part of the City in the performance of any covenant or agreement of the City under this Financing Agreement or any related document, or arising from any act or failure to act by the City, or any of its agents, contractors, servants, employees or licensees (including, without limitation, any failure to comply or any violation, actual or alleged, in connection with Environmental Regulations); (ii) matters regarding the authorization, issuance and sale of the Series 2017 Bonds attributable to the City, and the provision of any information furnished by the City in connection therewith concerning the Project or the City or arising from (1) any errors or omissions by the City such that the Series 2017 Bonds, when delivered to the Bondowners, are not validly issued and binding obligations of the Authority, or (2) any fraud or misrepresentations or omissions contained in the proceedings of the Authority furnished by or attributable to the City relating to the issuance of the Series 2017 Bonds or pertaining to the financial condition of the City which, if known to the Original Purchaser of the Series 2017 Bonds, might be considered a material factor in its decision to purchase the Series 2017 Bonds. (b) To the extent permitted by law, the City agrees to indemnify the Trustee for and to hold it harmless against all liabilities, claims, costs and expenses incurred without negligence or willful misconduct on the part of the Trustee, on account of any action taken or omitted to be taken by the Trustee in accordance with the terms of this Financing Agreement, the Series 2017 Bonds, the Indenture or any other Transaction Document or any action taken at the request of or with the consent of the City, including the costs and expenses (including, without limitation, reasonable compensation, expenses and disbursements of its agents and counsel) of the Trustee in defending itself against any such claim, action or proceeding brought in connection with the exercise or performance of any of its powers or duties under this Financing Agreement, the Series 2017 Bonds or the Indenture. W (c) In case any action or proceeding is brought against the Trustee in respect of which indemnity may be sought hereunder, the party seeking indemnity promptly shall give notice of that action or proceeding to the City, and the City upon receipt of that notice shall have the obligation and the right to assume the defense of the action or proceeding; provided, that failure of a party to give that notice shall not relieve the City from any of their obligations under this Section unless that failure prejudices the defense of the action or proceeding by the City. At its own expense, an indemnified party may employ separate legal counsel and participate in the defense; provided, however, in the event the City shall fail to employ counsel or such counsel shall fail to actively defend such actions or protect the Authority or the Trustee, or both, the Authority or the Trustee may employ counsel at the expense of the City to defend such action. The City shall not be liable for any settlement without its consent. (d) The indemnification set forth above is intended to and shall include the indemnification of all affected officials, directors, officers, attorneys, accountants, financial advisors, staff and employees of the Authority and the Trustee, respectively. That indemnification is intended to and shall be enforceable by the Authority and the Trustee, respectively, to the full extent permitted by law. Section 6.3. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement. Notwithstanding any other provision of this Financing Agreement, failure of the City to comply with the Continuing Disclosure Agreement shall not constitute an Event of Default; however, the Trustee may (and, at the request of the Original Purchaser or the Owners of at least 25% aggregate principal amount of Outstanding Series 2017 Bonds, shall), or any Bondowner or Beneficial Owner may, take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the City to comply with its obligations under the Continuing Disclosure Agreement. For purposes of this Section, `Beneficial Owner" means any Person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2017 Bonds (including Persons holding Series 2017 Bonds through nominees, depositories or other intermediaries), or (b) is treated as the Owner of any Series 2017 Bonds for federal income tax purposes. ARTICLE VII ADDITIONAL BONDS Section 7.1. Additional Bonds. The Authority from time to time may, in its sole discretion, at the written request of the City, authorize the issuance of Additional Bonds for the purposes and upon the terms and conditions provided in Section 203 of the Indenture; provided that (1) the terms of such Additional Bonds, the purchase price to be paid therefor and the manner in which the proceeds thereof are to be disbursed shall have been approved by resolutions adopted by the Authority and the City; (2) the Authority and the City shall have entered into a Supplemental Financing Agreement to acknowledge that Financing Payments are revised to the extent necessary to provide for the payment of the principal of, redemption premium, if any, and interest on the Additional Bonds and to extend the term of this Financing Agreement if the maturity of any of the Additional Bonds would otherwise occur after the expiration of the term of this Financing Agreement; and (3) the Authority and the City shall have otherwise complied with the provisions of this Financing Agreement and Section 203 of the Indenture with respect to the issuance of such Additional Bonds. -10- M!140[yMDKIAIII ASSIGNMENT OF BOARD'S RIGHTS UNDER FINANCING AGREEMENT Section 8.1. Assignment by the Authority. The Authority, by means of the Indenture and as security for the payment of the principal of, purchase price, and redemption premium, if any, and interest on the Series 2017 Bonds, will assign, pledge and grant a security interest in all of its rights, title and interests in, to and under this Financing Agreement, including Financing Payments and Additional Payments and other revenues, moneys and receipts received by it pursuant to this Financing Agreement, to the Trustee (reserving its Unassigned Authority's Rights) for the benefit of the Bondowners. Section 8.2. Restriction on Transfer of Authority's Rights. The Authority will not sell, assign, transfer or convey its interests in this Financing Agreement except pursuant to the Indenture. ARTICLE IX EVENTS OF DEFAULT AND REMEDIES Section 9.1. Events of Default Defined. The term "Event of Default" or "Default" shall mean any one or more of the following events: (a) Failure by the City to make timely payment of any Financing Payment; (b) Failure by the City to make any Additional Payment when due and, after notice of such failure, the City shall have failed to make such payment within 10 days following the due date; (c) Failure by the City to observe and perform any covenant, condition or agreement on the part of the City under this Financing Agreement or the Indenture, other than as referred to in the preceding subparagraphs (a) and (b) of this Section, for a period of 30 days after written notice of such default has been given to the City by the Trustee or the Authority during which time such default is neither cured by the City nor waived in writing by the Trustee and the Authority, provided that, if the failure stated in the notice cannot be corrected within said 30 -day period, the Trustee and the Authority may consent in writing to an extension of such time prior to its expiration and the Trustee and the Authority will not unreasonably withhold their consent to such an extension if corrective action is instituted by the City within the 30 -day period and diligently pursued to completion and if such consent, in their judgment, does not materially adversely affect the interests of the Bondowners; or (d) Any representation or warranty by the City herein or in any certificate or other instrument delivered under or pursuant to this Financing Agreement or the Indenture or in connection with the financing or refinancing of the Project shall prove to have been false, incorrect, misleading or breached in any material respect on the date when made, unless waived in writing by the Authority and the Trustee or cured by the City, if such representation or warranty can be cured to the satisfaction of the Authority and the Trustee within 30 days after notice thereof has been given to the City. Section 9.2. Remedies on Default. Subject to the provisions of Section 9.7 hereof, whenever any Event of Default shall have occurred and be continuing, the Trustee, as the assignee of the Authority, 91E may take any one or more of the following remedial steps; provided that if the principal of all Bonds then Outstanding and the interest accrued thereon shall have been declared immediately due and payable pursuant to the provisions of Section 702 of the Indenture, all Financing Payments for the remainder of the term of the Financing shall become immediately due and payable without any further act or action on the part of the Authority or the Trustee and the Trustee may immediately proceed (subject to the provisions of Section 9.7 hereof) to take any one or more of the remedial steps set forth in subparagraph (b) of this Section: (a) By written notice to the City declare the outstanding principal of the Financing Payments to be immediately due and payable, together with interest on overdue payments of principal and redemption premium, if any, and, to the extent permitted by law, interest, at the rate or rates of interest specified in the respective Bonds or the Indenture, without presentment, demand or protest, all of which are expressly waived. (b) Take whatever other action at law or in equity is necessary and appropriate to exercise or to cause the exercise of the rights and powers set forth herein or in the Indenture, as may appear necessary or desirable to collect the amounts payable pursuant to this Financing Agreement then due and thereafter to become due or to enforce the performance and observance of any obligation, agreement or covenant of the City under this Financing Agreement or the Indenture. In the enforcement of the remedies provided in this Section, the Trustee may treat all fees, costs and expenses of enforcement, including reasonable legal, accounting and advertising fees and expenses, as Additional Payments then due and payable by the City. Any amount collected pursuant to action taken under this Section shall be paid to the Trustee and applied, first, to the payment of any costs, expenses and fees incurred by the Authority or the Trustee as a result of taking such action and, next, any balance shall be used to satisfy any Financing Payments then due by payment into the Debt Service Fund and applied in accordance with the Indenture and, then, to satisfy any other Additional Payments then due or to cure any other Event of Default. Notwithstanding the foregoing, the Trustee shall not be obligated to take any step that in its opinion will or might cause it to expend time or money or otherwise incur liability, unless and until indemnity satisfactory to it has been furnished to the Trustee at no cost or expense to the Trustee, as provided in Section 802(e), Section 802(k) and Section 804 of the Indenture. The provisions of this Section are subject to the limitation that the annulment of a declaration that the Bonds are immediately due and payable shall automatically constitute an annulment of any corresponding declaration made pursuant to subparagraph (a) of this Section and a waiver and rescission of the consequences of such declaration and of the Event of Default with respect to which such declaration has been made, provided that no such waiver or rescission shall extend to or affect any other or subsequent Default or impair any right consequent thereon. In the event any covenant, condition or agreement contained in this Financing Agreement shall be breached or any Event of Default shall have occurred and such breach or Event of Default shall thereafter be waived by the Trustee, such waiver shall be limited to such particular breach or Event of Default. Section 9.3. No Remedy Exclusive. Subject to the provisions of Section 9.7 hereof, no remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Financing Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon a Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as -12- often as may be deemed expedient. In order to entitle the Trustee to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than such notice as may be herein expressly required. Section 9.4. Agreement to Pay Attorneys' Fees and Expenses. Subject to the provisions of Section 3.7 hereof, in connection with any Event of Default by the City, if the Authority or the Trustee employs attorneys or incurs other expenses for the collection of amounts payable hereunder or the enforcement of the performance or observance of any covenants or agreements on the part of the City herein contained, the City agrees that it will, on demand therefor, pay to the Authority and the Trustee the reasonable fees of such attorneys and such other reasonable fees, costs and expenses so incurred by the Authority and the Trustee. Section 9.5. Authority and City to Give Notice of Default. The Authority and the City shall each, at the expense of the City, promptly give to the Trustee written notice of any Default of which the Authority or the City, as the case may be, shall have actual knowledge or written notice, but the Authority shall not be liable for failing to give such notice. Section 9.6. Performance of the City's Obligations. If the City shall fail to keep or perform any of its obligations as provided in this Financing Agreement, then the Authority or the Trustee may (but shall not be obligated so to do), upon the continuance of such failure on the City's part for 15 days after notice of such failure is given to the City by the Authority or the Trustee, and without waiving or releasing the City from any obligation hereunder, as an additional but not exclusive remedy, make any such payment or perform any such obligation, and all sums so paid by the Authority or the Trustee and all necessary incidental costs and expenses incurred by the Authority or the Trustee in performing such obligations shall be deemed to be Additional Payments and shall be paid to the Authority or the Trustee plus interest at the Prime Rate plus 2% on demand. Section 9.7. Remedial Rights Assigned to the Trustee. Upon the execution and delivery of the Indenture, the Authority will thereby have assigned to the Trustee all rights and remedies conferred upon or reserved to the Authority by this Financing Agreement, reserving only the Unassigned Authority's Rights. The Trustee shall have the exclusive right to exercise such rights and remedies conferred upon or reserved to the Authority by this Financing Agreement in the same manner and to the same extent, but under the limitations and conditions imposed thereby and hereby. The Trustee and the Bondowners shall be deemed third party creditor beneficiaries of all representations, warranties, covenants and agreements contained herein. ARTICLE X PREPAYMENT AND ACCELERATION OF FINANCING PAYMENTS Section 10.1 Right to Prepay at Any Time. The City shall have the option at any time to prepay all of the Financing Payments, Additional Payments and other amounts it is required to pay hereunder by paying to the Trustee all such sums as are sufficient to satisfy and discharge the Indenture and paying or making provision for the payment of all other sums payable hereunder. Section 10.2. Notice of Prepayment. To exercise an option granted by Section 10.1 or 10.3, the City shall give written notice to the Authority and the Trustee which shall specify therein the date upon which a prepayment of Financing Payments will be made, which date shall be not less than 45 days from the date the notice is received by the Trustee. In the Indenture, the Authority has directed the Trustee to -13- forthwith take all steps necessary under the applicable provisions of the Indenture to effect any redemption of the then Outstanding Bonds, in whole, or in part, pursuant to Section 302 of the Indenture. Section 10.3. Precedence of this Article. The rights, options and obligations of the City set forth in this Article may be exercised or shall be fulfilled, as the case may be, whether or not a Default exists hereunder, provided that such Default will not result in nonfulfillment of any condition to the exercise of any such right or option. ARTICLE XI SUPPLEMENTAL FINANCING AGREEMENTS Section 11.1. Supplemental Financing Agreements without Consent of Bondowners. Without the consent of the Owners of any Bonds, the Authority and the City may from time to time enter into one or more Supplemental Financing Agreements, for any of the following purposes: (a) to subject to this Financing Agreement additional property or to more precisely identify any project financed or refinanced out of the proceeds of any series of Bonds, or to substitute or add additional property thereto; or (b) to add to the conditions, limitations and restrictions on the authorized amount, terms or purposes of the Financing , as herein set forth, additional conditions, limitations and restrictions thereafter to be observed; or (c) in connection with the issuance of any Additional Bonds, to make such other provisions as provided in Section 7.1; or (d) to evidence the succession of another entity to the City and the assumption by any such successor of the covenants of the City herein contained; or (e) to add to the covenants of the City or to the rights, powers and remedies of the Trustee for the benefit of the Owners of all or any series of Bonds or to surrender any right or power herein conferred upon the City; or (f) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein or to make any other provisions, with respect to matters or questions arising under this Financing Agreement, which shall not be inconsistent with the provisions of this Financing Agreement, provided such action shall not adversely affect the interests of the Owners of the Bonds. Section 11.2. Supplemental Financing Agreements with Consent of Bondowners. With the prior written consent of the Owners of not less than a majority in principal amount of the Bonds then Outstanding affected by such Supplemental Financing Agreement, the Authority and the City may enter into Supplemental Financing Agreements, in form satisfactory to the Trustee, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Financing Agreement or of modifying in any manner the rights of the Trustee and the Owners of the Bonds under this Financing Agreement; provided, however, that no such Supplemental Financing Agreement shall, without the consent of the Owner of each Outstanding Bond affected thereby: -14- (a) change the stated maturity of the principal of, or any installment of interest on, the Financing Payments, or reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or change any place of payment where (except as may be required in connection with the appoint of a successor Trustee), or the coin or currency in which, the Financing Payments are payable, or impair the right to institute suit for the enforcement of any such payment on or after the stated maturity thereof (or, in the case of redemption, on or after the redemption date); or (b) reduce the percentage in principal amount of the Outstanding Bonds, the consent of whose Owners is required for any such Supplemental Financing Agreement, or the consent of whose Owners is required for any waiver provided for in this Financing Agreement of compliance with certain provisions of this Financing Agreement or certain defaults hereunder and their consequences;or (c) modify any of the provisions of this Section, except to increase any percentage provided thereby or to provide that certain other provisions of this Financing Agreement cannot be modified or waived without the consent of the Owner of each Bond affected thereby. The Trustee may in its discretion determine (which determination may be based upon the advice or opinion of counsel) whether or not any Bonds would be affected by any Supplemental Financing Agreement and any such determination shall be conclusive upon the Owners of all Bonds, whether theretofore or thereafter authenticated and delivered under the Indenture. The Trustee shall not be liable for any such determination made in good faith. It shall not be necessary for the required percentage of Owners of Bonds under this Section to approve the particular form of any proposed Supplemental Financing Agreement, but it shall be sufficient if such act shall approve the substance thereof. Section 11.3. Execution of Supplemental Financing Agreements. In executing or consenting to any Supplemental Financing Agreement permitted by this Article, the Authority and the Trustee shall be entitled to receive, and, subject to Article VIII of the Indenture, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such Supplemental Financing Agreement is authorized and permitted by and in compliance with this Financing Agreement. The Trustee may, but shall not be obligated to, consent to any such Supplemental Financing Agreement which affects the Trustee's own rights, duties or immunities under this Financing Agreement, the other Transaction Documents or otherwise. Section 11.4. Effect of Supplemental Financing Agreements. Upon the execution of any Supplemental Financing Agreement under this Article, this Financing Agreement shall be modified in accordance therewith and such Supplemental Financing Agreement shall form a part of this Financing Agreement for all purposes; and the City, the Authority, the Trustee and every Owner of Bonds theretofore or thereafter authenticated and delivered under the Indenture shall be bound thereby. Section 11.5. Reference in Bonds to Supplemental Financing Agreements. Bonds authenticated and delivered after the execution of any Supplemental Financing Agreement pursuant to this Article may, and if required by the Trustee shall, bear a notation in form approved by the Trustee as to any matter provided for in such Supplemental Financing Agreement. If the Authority shall so determine, new Bonds so modified as to conform, in the opinion of the Trustee and the Authority, to any such Supplemental Financing Agreement may be prepared and executed by the Authority and authenticated and delivered by the Trustee in exchange for Outstanding Bonds. -15- ARTICLE XII MISCELLANEOUS Section 12.1. Authorized Representatives. Whenever under this Financing Agreement the approval of the Authority is required or the Authority is required or permitted to take some action, such approval shall be given or such action shall be taken by the Authority Representative, and the City and the Trustee shall be authorized to act on any such approval or action. Any approval shall not be unreasonably withheld or delayed. Whenever under this Financing Agreement the approval of the City is required or the City is required or permitted to take some action, such approval shall be given or such action shall be taken by the City Representative, and the Authority and the Trustee shall be authorized to act on any such approval or action. Section 12.2. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered by hand delivery or overnight delivery service or received by registered or certified mail, postage prepaid, return receipt requested, addressed as specified in Section 1101 of the Indenture. A duplicate copy of each notice, certificate or other communication given hereunder to any party mentioned in said Section 1101 shall be given to all other parties mentioned therein (other than the Bondowners unless a copy is required to be furnished to them by other provisions of this Financing Agreement). The Authority, the City or the Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent to it. Section 12.3. Performance Date Not a Business Day. If any date for the payment of principal of, or redemption premium, if any, or interest on the Series 2017 Bonds or the taking of any other action hereunder is not a Business Day, then such payment shall be due, or such action shall be taken, on the first Business Day thereafter with the same force and effect as if made on the date fixed for payment or performance. Section 12.4. Binding Effect. This Financing Agreement shall inure to the benefit of and shall be binding upon the Authority and the City and their respective successors and assigns. Section 12.5. Execution in Counterparts. This Financing Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 12.6. No Pecuniary Liability. All covenants, obligations and agreements of the City contained in this Financing Agreement and the Indenture shall be effective to the extent authorized and permitted by applicable law. No such covenant, obligation or agreement shall be deemed to be a covenant, obligation or agreement of any present or future councilmember, commissioner, director, officer, agent or employee of the City other than in their official capacity. Section 12.7. Extent of Covenants of the Authority; No Personal or Pecuniary Liability. All covenants, obligations and agreements of the Authority contained in this Financing Agreement and the Indenture shall be effective to the extent authorized and permitted by applicable law. No such covenant, obligation or agreement shall be deemed to be a covenant, obligation or agreement of any present or future director, officer, agent or employee of the Authority in other than his official capacity, and no official executing the Series 2017 Bonds shall be liable personally on the Series 2017 Bonds or be subject to any personal liability or accountability by reason of the issuance thereof or by reason of the covenants, -16- obligations or agreements of the Authority contained in this Financing Agreement or in the Indenture. No provision, covenant or agreement contained in this Financing Agreement, the Indenture or the Series 2017 Bonds, or any obligation herein or therein imposed upon the Authority, or the breach thereof, shall constitute or give rise to or impose upon the Authority a pecuniary liability or a charge. No provision hereof shall be construed to impose a charge against the general credit of the Authority or any personal or pecuniary liability upon any director, officer, agent or employee of the Authority. Section 12.8. Net Financing. Subject to the limitations described in Sections 3.5, 3.7, 3.8 and 4.1, the parties hereto agree (a) that the payments of Financing Payments are designed to provide the Authority and the Trustee with moneys adequate in amount to pay all principal of, redemption premium, if any, and interest accruing on the Series 2017 Bonds as the same become due and payable, (b) that to the extent that the payments of Financing Payments are not sufficient to provide the Authority and the Trustee with funds sufficient for the purposes aforesaid, the City shall be obligated to pay (subject with respect to the City to the limitations set forth in Section 3.5 hereof) to, and they do hereby covenant and agree to pay, upon demand therefor, as Additional Payments, such further moneys, in cash, as may from time to time be required for such purposes, (c) that the payments of Additional Payments are designed to provide the appropriate party with funds sufficient for the purposes set forth in Section 3.4 hereof and (d) that if after the principal of, redemption premium, if any, and interest on the Series 2017 Bonds and all costs incident to the payment of the Series 2017 Bonds have been paid in full (including all Additional Payments) the Trustee or the Authority holds unexpended funds received in accordance with the terms hereof, such unexpended funds shall, after payment therefrom of all sums then due and owing by the City under the terms of this Financing Agreement, be distributed in accordance with Article IV of the Indenture. Section 12.9. Complete Agreement. The Authority and the City understand that oral or unexecuted agreements or commitments to loan money, extend credit or to forbear from enforcing repayment of a debt including promises to extend or renew such debt are not enforceable. To protect the Authority and the City from misunderstanding or disappointment, any agreements the Authority and the City reach covering such matters are contained in this Financing Agreement, which is the complete and exclusive statement of the agreement between the Authority and the City, except as the Authority and the City may later agree in writing to modify this Financing Agreement. Section 12.10. Severability. If any provision of this Financing Agreement, or any covenant, stipulation, obligation, agreement, act or action, or part thereof made, assumed, entered into or taken thereunder, or any application of such provision, is for any reason held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Financing Agreement or any other covenant, stipulation, obligation, agreement, act or action, or part thereof, made, assumed, entered into, or taken, each of which shall be construed and enforced as if such illegal or invalid portion were not contained herein. Such illegality or invalidity of any application thereof shall not affect any legal and valid application thereof, and each such provision, covenant, stipulation, obligation, agreement, act or action, or part thereof, shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law. Section 12.11. Governing Law. This Financing Agreement shall be governed by and construed in accordance with the laws of the State of Missouri. Section 12.12. Third Party Beneficiaries. The Trustee and the Bondowners shall be deemed to be third party beneficiaries under this Financing Agreement. Section 12.13. Electronic Transactions. The transaction described herein may be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts -17- of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. [The remainder of this page intentionally left blank.] -18- AWN, 101111"11 THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI (Seal)', By: Leland Finley, President ATTEST: ,AI Secretary By: Financing Agreement The Industrial Development Authority of the City of Riverside, Missouri (Riverside Horizons Infrastructure Prqject), Series 2017 01 By leen Rase, Mayor Financing Agreement The Industrial Development Authority of the City of Riverside, Missouri (Riverside Horizons Infrastructure Project), Series 2€117 m TAX COMPLIANCE AGREEMENT Dated as of November 1, 2017 Among THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI, CITY OF RIVERSIDE, MISSOURI, And UMB BANK, N.A., as Trustee $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 TAX COMPLIANCE AGREEMENT TABLE OF CONTENTS Page PARTIES AND RECITALS.............................................................................................1 ARTICLE I DEFINITIONS Section 1.1. Definitions of Words and Terms.......................................................................................2 ARTICLE II GENERAL REPRESENTATIONS AND COVENANTS Section 2.1. Representations and Covenants of the Authority..............................................................7 Section 2.2. Representations and Covenants of the City......................................................................8 Section 2.3. Representations and Covenants of the Trustee...............................................................11 Section 2.4. Survival of Representations and Covenants....................................................................12 ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS Section3.1. General............................................................................................................................12 Section 3.2. Reasonable Expectations................................................................................................12 Section 3.3. Purpose of Financing......................................................................................................13 Section 3.4. Funds and Accounts........................................................................................................13 Section 3.5. Amount and Use of Bond Proceeds and Other Money...................................................13 Section 3.6. Multipurpose Issue..........................................................................................................13 Section 3.7. No Advance Refunding...................................................................................................14 Section 3.8. Current Refunding..........................................................................................................14 Section 3.9. Project Completion.........................................................................................................14 Section 3.10. Financing Agreement/Sinking Funds.............................................................................14 Section 3.11. Reserve, Replacement and Pledged Funds.....................................................................14 Section 3.12. Purpose Investment Yield...............................................................................................15 Section 3.13. Issue Price and Yield on Bonds......................................................................................15 Section 3.14. Miscellaneous Arbitrage Matters....................................................................................15 Section3.15. Conclusion......................................................................................................................15 ARTICLE IV POST -ISSUANCE TAX REQUIREMENTS, POLICIES AND PROCEDURES Section4.1. General............................................................................................................................15 Section 4.2. Record Keeping, Use of Bond Proceeds and Use of Financed Facilities 16 Section 4.3. Temporary Periods/Yield Restriction.............................................................................17 Section 4.4. Procedures for Establishing Fair Market Value..............................................................17 Section 4.5. Certain Gross Proceeds Exempt from the Rebate Requirement.....................................20 Section 4.6. Computation and Payment of Arbitrage Rebate.............................................................21 Section 4.7. Successor Rebate Analyst...............................................................................................21 Section 4.8. Rebate Report Records...................................................................................................22 Section4.9. Filing Requirements........................................................................................................22 Section 4.10. Survival after Defeasance...............................................................................................22 Section4.11. Tax Audits.......................................................................................................................22 ARTICLE V MISCELLANEOUS PROVISIONS Section 5.1. Term of Tax Agreement..................................................................................................22 Section5.2. Amendments...................................................................................................................22 Section 5.3. Opinion of Bond Counsel...............................................................................................23 Section5.4. Reliance..........................................................................................................................23 Section5.5. Severability.....................................................................................................................23 Section 5.6. Benefit of Agreement......................................................................................................23 Section 5.7. Default; Breach and Enforcement...................................................................................23 Section 5.8. Execution in Counterparts...............................................................................................23 Section5.9. Governing Law...............................................................................................................23 Section 5.10. Electronic Transactions...................................................................................................23 Signatures....................................................................................................................... S-1 Exhibit A - Debt Service Schedule and Proof of Bond Yield Exhibit B - IRS Form 8038-G with Attachment Exhibit C - Description of Property Comprising the Financed Facility and Final Written Allocation of Original Obligations Exhibit D - Sample Annual Compliance Checklist TAX COMPLIANCE AGREEMENT THIS TAX COMPLIANCE AGREEMENT (the "Tax Agreement"), entered into as of November 1, 2017, among THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI, a body corporate and politic and a public instrumentality duly organized and existing under the laws of the State of Missouri (the "Authority"), the CITY OF RIVERSIDE, MISSOURI, a city of the fourth class and political subdivision of the State of Missouri (the "City"), and UMB BANK, N.A., a national banking association duly organized and existing under the laws of the United States of America, as Trustee (the "Trustee"); RECITALS 1. This Tax Agreement is being executed and delivered in connection with the issuance by the Authority of $18,370,000 principal amount of Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017 (the "Bonds"), under the herein defined Indenture between the Authority and the Trustee, for the purpose of making the proceeds of such Bonds available to the City under the herein defined Financing Agreement between the Authority and the City, to provide funds for certain purposes as described in this Tax Agreement and in the Indenture and the Financing Agreement. 2. The Internal Revenue Code of 1986, as amended (the "Code"), and the applicable Regulations and rulings issued by the U.S. Treasury Department (the "Regulations"), impose certain limitations on the uses and investment of the Bond proceeds and of certain other money relating to the Bonds and set forth the conditions under which the interest on the Bonds will be excluded from gross income for federal income tax purposes. 3. The Authority, the City, and the Trustee are entering into this Tax Agreement in order to set forth certain facts, covenants, representations, and expectations relating to the use of Bond proceeds and the property financed or refinanced with those proceeds and the investment of the Bond proceeds and of certain other related money, in order to establish and maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes. 4. The City adopted a Tax -Exempt Financing Compliance Policy and Procedure on January 17, 2012 (the "Tax Compliance Procedure") for the purpose of setting out general procedures for the City and entities that issue on behalf of the City (such as the Authority) to continuously monitor and comply with the federal income tax requirements set out in the Code and the Regulations. 5. This Tax Agreement is entered into as required by the Tax Compliance Procedure to set out specific tax compliance procedures applicable to the Bonds. NOW, THEREFORE, in consideration of the foregoing and the mutual representations, covenants and agreements set forth in this Tax Agreement, the Authority, the City, and the Trustee represent, covenant and agree as follows: ARTICLE I DEFINITIONS Section 1.1. Definitions of Words and Terms. Except as otherwise provided in this Tax Agreement or unless the context otherwise requires, capitalized words and terms used in this Tax Agreement have the same meanings as set forth in the Indenture, and certain other words and phrases have the meanings assigned in Code §§ 103, 141-150 and the Regulations. The following words and terms used in this Tax Agreement have the following meanings: "Adjusted Gross Proceeds" means the Gross Proceeds of the Bonds reduced by amounts (1) in a Bona Fide Debt Service Fund or a reasonably required reserve or replacement fund, (2) that as of the Issue Date are not expected to be Gross Proceeds, but which arise after the end of the applicable spending period, and (3) representing grant repayments or sale or Investment proceeds of any purpose Investment. "Authority" means The Industrial Development Authority of the City of Riverside, Missouri and its successors and assigns or any body, agency or instrumentality of the State of Missouri succeeding to or charged with the powers, duties and functions of the Authority. "Bona Fide Debt Service Fund" means a fund, which may include Bond proceeds, that (a) is used primarily to achieve a proper matching of revenues with principal and interest payments within each Bond Year; and (b) is depleted at least once each Bond Year, except for a reasonable carryover amount not to exceed the greater of (1) the earnings on the fund for the immediately preceding Bond Year, or (2) one - twelfth of the principal and interest payments on the Bonds for the immediately preceding Bond Year. Bond" or Bonds" means any Bond or Bonds described in the recitals, authenticated and delivered under the Indenture. "Bond Counsel" means Gilmore & Bell, P.C., or other firm of nationally recognized bond counsel acceptable to the Authority. "Bond Year" means each 1 -year period (or shorter period for the first Bond Year) ending May 1, or another 1 -year period selected by the Authority. "City" means City of Riverside, Missouri, a city of the fourth class and political subdivision of the State of Missouri, and its successors and assigns and any surviving, resulting or transferee corporation as provided in the Financing Agreement. "City Bond Compliance Officer" means the City's Finance Director or other person named in the Tax Compliance Procedure. "Code" means the Internal Revenue Code of 1986, as amended. "Computation Date" means each date on which arbitrage rebate for the Bonds is computed. The Authority may treat any date as a Computation Date, subject to the following limits: (a) the first rebate installment payment must be made for a Computation Date not later than 5 years after the Issue Date; &Z (b) each subsequent rebate installment payment must be made for a Computation Date not later than 5 years after the previous Computation Date for which an installment payment was made; and (c) the date the last Bond is discharged is the final Computation Date. The Authority selects November 1, 2022 as the first Computation Date but reserves the right to select a different date consistent with the Regulations. "Costs of Issuance Fund" means The Industrial Development Authority of the City of Riverside, Missouri - Riverside Horizons Project Costs of Issuance Fund. "Debt Service Fund" means The Industrial Development Authority of the City of Riverside, Missouri - Riverside Horizons Project Debt Service Fund. "Escrow Agent" means UMB Bank, N.A., Kansas City, Missouri, as escrow agent under the Escrow Agreement, and its successors and assigns. "Escrow Agreement" means the Escrow Letter of Instructions from the City and the Authority to the Trustee dated the date of issuance of the Series 2017 Bonds and related to the refunding of the Refunded Bonds. "Final Written Allocation" means the written allocation of expenditures of proceeds of the Original Obligations as set forth on Exhibit C and the Final Written Allocation of expenditures prepared by the City Bond Compliance Officer in accordance with the Tax Compliance Procedure and Section 4.2(b) of this Tax Certificate. "Financed Facility" means the portion of the Project being financed or refinanced with the proceeds of the Original Obligations as described on Exhibit C. "Financing" means the Authority making the proceeds of the Bonds available to the City under the Financing Agreement. "Financing Agreement" means the Financing Agreement dated as of November 1, 2017, between the Authority and the City, as further amended and supplemented from time to time in accordance with the provisions of the Financing Agreement. "Gross Proceeds" means (a) sale proceeds (any amounts actually or constructively received by the Authority from the sale of the Bonds, including amounts used to pay underwriting discount or fees, but excluding pre -issuance accrued interest), (b) Investment proceeds (any amounts received from investing sale proceeds or other Investment proceeds), (c) any amounts held in a sinking fund for the Bonds, (d) any amounts held in a pledged fund or reserve fund for the Bonds, (e) any other replacement proceeds and (f) any transferred proceeds. Specifically, Gross Proceeds includes (but is not limited to) amounts held in the following funds and accounts: (1) Costs of Issuance Fund; (2) Debt Service Fund; -3- (3) Special Allocation Fund; (4) Series 2017 Debt Service Reserve Fund; (5) Escrow Fund; and (6) Rebate Fund (to the extent funded with sale proceeds or investment proceeds of the Bonds). "Guaranteed Investment Contract" is any Investment with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate, including any agreement to supply Investments on 2 or more future dates (e.g., a forward supply contract). "Indenture" means the Bond Trust Indenture dated as of November 1, 2017, as originally executed by the Authority and the Trustee, as further amended and supplemented in accordance with the provisions of the Indenture. "Investment" means any security, obligation, annuity contract or other investment -type property which is purchased directly with, or otherwise allocated to, Gross Proceeds. Such term does not include obligations the interest on which is excluded from federal gross income, except for "specified private activity bonds" as such term is defined in Code § 57(a)(5)(C). "IRS" means the United States Internal Revenue Service. "Issue Date" means November 1, 2017. "Management Agreement" means a legal agreement defined in Regulations § 1.141-3(b) as a management, service, or incentive payment contract with an entity that provides services involving all or a portion of any function of the Financed Facility, such as a contract to manage the entire Financed Facility or a portion of the Financed Facility. Contracts for services that are solely incidental to the primary governmental function of the Financed Facility (for example, contracts for janitorial, office equipment repair, billing, or similar services), however, are not treated as Management Agreements. "Measurement Period" means, with respect to each item of property financed as part of the Financed Facility with proceeds of the Original Obligations, the period beginning on the later of (i) the issue date of the Original Obligations or (ii) the date the property was or will be placed in service, and ending on the earlier of (A) the final maturity date of the Bonds or (B) the expected economic useful life of the property. "Minor Portion" means the lesser of $100,000 or 5% of the sale proceeds of the Bonds. "Net Proceeds" means the sale proceeds of the Bonds (excluding pre -issuance accrued interest), less any proceeds deposited in a reasonably required reserve or replacement fund, plus all Investment earnings on such sale proceeds. "Non -Qualified Use" means use of Bond proceeds or the Financed Facility in a trade or business carried on by any Non -Qualified User. The rules set out in Regulations § 1.141-3 determine whether Bond proceeds or the Financed Facility are "used" in a trade or business. Generally, ownership, a lease, or any other use that grants a Non -Qualified User a special legal right or entitlement with respect to the Financed Facility, will constitute use under Regulations § 1.141-3. "Non -Qualified User" means any person or entity other than a Qualified User. !3 "Opinion of Bond Counsel" means the written opinion of Gilmore & Bell, P.C. or other nationally recognized firm of bond counsel. Unless otherwise specifically noted herein an Opinion of Bond Counsel must conclude that the action or proposed action or the failure to act or proposed failure to act for which the opinion is required will not adversely affect the exclusion of the interest on the Bonds from gross income for federal income tax purposes. "Original Obligations" means, collectively, the Series 2007A Bonds and Series 2007B Bonds, which were treated as a single issue for federal tax purposes and was the first issue of tax-exempt governmental bonds that financed or refinanced a portion of the Financed Facility. "Post -Issuance Tax Requirements" means those requirements related to the use of proceeds of the Bonds, the use of the Financed Facility and the investment of Gross Proceeds after the Issue Date of the Bonds. "Project" means all of the property being acquired, developed, constructed, renovated, and equipped by the City using Bond proceeds and other money contributed by the City, as described on Exhibit C. "Qualified Use Agreement" means any of the following: (1) A lease or other short-term use by members of the general public who occupy the Financed Facility on a short-term basis in the ordinary course of the City's governmental purposes. (2) Agreements with Qualified Users or Non -Qualified Users to use all or a portion of the Financed Facility for a period up to 200 days in length pursuant to an arrangement whereby (a) the use of the Financed Facility under the same or similar arrangements is predominantly by natural persons who are not engaged in a trade or business and (b) the compensation for the use is determined based on generally applicable, fair market value rates that are in effect at the time the agreement is entered into or renewed. Any Qualified User or Non -Qualified User using all or any portion of the Financed Facility under this type of arrangement may have a right of first refusal to renew the agreement at rates generally in effect at the time of the renewal. (3) Agreements with Qualified Users or Non -Qualified Users to use all or a portion of the Financed Facility for a period up to 100 days in length pursuant to arrangements whereby (a) the use of the property by the person would be general public use but for the fact that generally applicable and uniformly applied rates are not reasonably available to natural persons not engaged in a trade or business, (b) the compensation for the use under the arrangement is determined based on applicable, fair market value rates that are in effect at the time the agreement is entered into or renewed, and (c) the Financed Facility was not constructed for a principal purpose of providing the property for use by that Qualified User or Non -Qualified User. Any Qualified User or Non - Qualified User using all or any portion of the Financed Facility under this type of arrangement may have a right of first refusal to renew the agreement at rates generally in effect at the time of the renewal. (4) Agreements with Qualified Users or Non -Qualified Users to use all or a portion of the Financed Facility for a period up to 50 days in length pursuant to a negotiated arm's-length arrangement at fair market value so long as the Financed Facility was not constructed for a principal purpose of providing the property for use by that person. -5- "Qualified User" means a State, territory, possession of the United States, the District of Columbia, or any political subdivision thereof, or any instrumentality of such entity, but it does not include the United States or any agency or instrumentality of the United States. "Rebate Analyst" means Gilmore & Bell, P.C. or any successor Rebate Analyst selected pursuant to this Tax Agreement. "Rebate Fund" means The Industrial Development Authority of the City of Riverside, Missouri— Riverside Horizons Project Rebate Fund. "Refunded Obligations" means, collectively, $15,295,000 outstanding principal amount of the Series 2007A Bonds and $4,370,000 outstanding principal amount of the Series 2007B Bonds. "Regulations" means all Regulations issued by the U.S. Treasury Department to implement the provisions of Code §§ 103 and 141 through 150 and applicable to the Bonds. "Senior Horizons Bonds" means, collectively, the Authority's Tax Increment Refunding Revenue Bonds (L-385 Levee Project), Series 2011A, the Authority's Tax Increment Refunding Revenue Bonds (L- 385 Project), Series 2014, and the Levee District Improvement Refunding Revenue Bonds (L-385 Project), Series 2017 (issued by the Riverside-Quindaro Bend Levee District of Platte County, Missouri). "Series 2007A Bonds" means the Authority's Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project - City of Riverside, Missouri), Series 2007A, issued in the original principal amount of $30,265,000 on May 9, 2007. The Series 2007A Bonds and the Series 2007B Bonds were treated as a single issue for federal tax purposes. "Series 2007B Bonds" means the Authority's Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project - City of Riverside, Missouri), Series 2007B, issued in the original principal amount of $10,000,000 on May 9, 2007. The Series 2007A Bonds and the Series 2007B Bonds were treated as a single issue for federal tax purposes. "Series 2017 Costs of Issuance Account" means the Series 2017 Costs of Issuance Account within the Costs of Issuance Fund. "Series 2017 Debt Service Fund" means the Series 2017 Debt Service Account within the Debt Service Fund. "Series 2017 Debt Service Reserve Fund" means the Industrial Development Authority of the City of Riverside, Missouri - Riverside Horizons Project Series 2017 Debt Service Reserve Fund. "Series 2017 Rebate Account" means the Series 2017 Rebate Account within the Rebate Fund. "Tax Agreement" means this Tax Compliance Agreement as it may from time to time be amended and supplemented in accordance with its terms. "Tax Compliance Procedure" means the City's Tax -Exempt Financing Compliance Policy and Procedure, dated January 17, 2012. 51 "Tax -Exempt Bond File" means documents and records for the Bonds, the Refunded Obligations and the Original Obligations maintained by the City Bond Compliance Officer pursuant to the Tax Compliance Procedure. "Tax Revenues" means incremental tax revenues levied including (1) payments in lieu of taxes derived from the redevelopment area, (2) subject to annual appropriation by the City, economic activity tax revenues received by the City with respect to the redevelopment area, and (3) the New State Revenues (as defined in the Financing Agreement) received by the City with respect to the redevelopment area. "Transcript" means the Transcript of Proceedings relating to the authorization and issuance of the Bonds. "Trustee" means UMB Bank, N.A., Kansas City, Missouri, and its successor or successors and any other corporation or association which at any time may be substituted in its place at the time serving as Trustee under the Indenture. "Underwriter" means Stifel, Nicolaus & Company, Incorporated, St. Louis, Missouri, as underwriter of the Bonds. "Yield" means yield on the Bonds, computed under Regulations § 1.148-4, and yield on an Investment, computed under Regulations § 1.148-5. ARTICLE II GENERAL REPRESENTATIONS AND COVENANTS Section 2.1. Representations and Covenants of the Authority. The Authority represents and covenants as follows: (a) Organization and Authority. The Authority (1) is a body corporate and politic organized and existing under the laws of the State of Missouri, and (2) has lawful power and authority to issue the Bonds for the purposes set forth in the Indenture, to enter into, execute and deliver the Indenture, the Financing Agreement, the Bonds, and this Tax Agreement and to carry out its obligations under this Tax Agreement and under such documents, and (3) by all necessary action has been duly authorized to execute and deliver the Indenture, the Financing Agreement, the Bonds, and this Tax Agreement, acting by and through its duly authorized officials. (b) Tax -Exempt Status of Bonds—General Representation and Covenants. In order to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes, the Authority (1) will take whatever action, and refrain from whatever action, necessary to comply with the applicable requirements of the Code; (2) will not use or invest, or permit the use or Investment of, any Bond proceeds, other money held under the Indenture, or other funds of the Authority, in a manner that would violate applicable provisions of the Code; and (3) will not use, or permit the use of, any portion of the Financed Facility in a manner that would cause any Bond to become a "private activity bond" as defined in Code § 141. (c) Registered Bonds. The Indenture requires that all of the Bonds will be issued and held in registered form within the meaning of Code § 149(a). -7- (d) Single Issue; No Other Issues. The Bonds constitute a single "issue" under Regulations §1.150-1(c) for all purposes. No other obligations of the Authority (1) are being sold within 15 days of the sale of the Bonds, (2) are being sold under the same plan of financing as the Bonds, and (3) are expected to be paid from substantially the same source of funds as the Bonds (disregarding guarantees from unrelated parties, such as bond insurance). (e) Bank Qualified Tax -Exempt Obligation. The Bonds are not "qualified tax-exempt obligations" under Code § 265(b)(3). (f) IRS Form 8038-G. Attached as Exhibit B is a copy of IRS Form 8038-G (Information Return for Tax -Exempt Governmental Obligations) that is being executed by a representative of the Authority and which is being filed with the Internal Revenue Service in connection with the issuance of the Bonds as required by Code § 149(e). Bond Counsel prepared Form 8038-G in connection with the issuance of the Bonds. The Authority knows of no inaccuracies in the Form 8038-G prepared by Bond Counsel. The Qualified Users of the proceeds of the Bonds and their EIN numbers are set out on the attachment to IRS Form 8038-G. (g) Bonds Not Federally Guaranteed. The Authority will not take any action or permit any action to be taken which would cause any Bond to be "federally guaranteed" within the meaning of Code § 149(b). (h) Authority Reliance on Other Parties. The expectations, representations and covenants of the Authority concerning uses of Bond proceeds and certain other moneys described in this Tax Agreement and other matters are based in whole or in part upon covenants, representations and certifications of the City and other parties set forth in this Tax Agreement or exhibits to this Tax Agreement. Although the Authority has made no independent investigation of the representations of other parties, the Authority is not aware of any facts or circumstances that would cause it to question the accuracy or reasonableness of any representation made in this Tax Agreement or exhibits to this Tax Agreement. (i) Compliance with Future Tax Requirements. The Authority understands that the Code and the Regulations may impose new or different restrictions and requirements on the Authority in the future. The Authority will comply with such future restrictions that are necessary to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes. Section 2.2. Representations and Covenants of the City. The City represents and covenants to the Authority and the Trustee as follows: (a) Organization and Authority. The City (1) is a city of the fourth class and political subdivision duly organized and validly existing under the laws of the State of Missouri, (2) has lawful power and authority to enter into, execute and deliver the Financing Agreement and this Tax Agreement and to carry out its obligations under such agreements, and (3) by all necessary action has been duly authorized to execute and deliver the Financing Agreement and this Tax Agreement, acting by and through its duly authorized officials. (b) Tax -Exempt Status of Bonds—General Representation and Covenants. In order to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes, the City (1) will take whatever action, and refrain from whatever action, necessary to 10 comply with the applicable requirements of the Code; (2) will not use or invest, or permit the use or Investment of, any Bond proceeds, other money held under the Indenture, or other funds of the City, in a manner that would violate applicable provisions of the Code; and (3) will not use, or permit the use of, any portion of the Financed Facility in a manner that would cause any Bond to become a "private activity bond" as defined in Code § 141. (c) Governmental Obligations—Use of Proceeds. Throughout the Measurement Period all of the Financed Facility has been and is expected to be owned by the City or another Qualified User. The City represents that, throughout the Measurement Period, no portion of the Financed Facility has been or is expected to be used in a Non -Qualified Use. Throughout the Measurement Period the City will not permit any Non -Qualified Use of the Financed Facility without first obtaining an Opinion of Bond Counsel. (d) Governmental Obligations Private Security or Payment — No Impermissible Agreements. (1) As of the Issue Date, the City expects that none of the principal and interest on the Bonds will be and the payment of principal of and interest on the Refunded Obligations has not been (under the terms of the Bonds or any underlying arrangement) directly or indirectly: (A) secured by (i) any interest in property used or to be used for a private business use, or (ii) any interest in payments in respect of such property; or (B) derived from payments (whether or not such payments are made to the Authority) in respect of property, or borrowed money, used or to be used for a private business use. (2) For purposes of the forgoing, taxes of general application, including Tax Revenues, are not treated as private payments or as private security. Financing Payments will be the primary source of repayment of the Bonds. Tax Revenues will be pledged or annually appropriated by the City, on a subordinate basis to the debt service payments on the Senior Horizons Bonds, to secure a portion of the debt service payments under the Financing. Tax Revenues are generally applicable taxes because they are enforced contributions exacted pursuant to legislative authority as part of the taxing power, are imposed and collected for the purpose of raising revenue to be used for governmental purposes, have a uniform rate of collection that applies to all persons of the same classification in the appropriate jurisdiction and have a generally applicable manner of collection and determination. No taxpayer has entered into any "impermissible agreement" relating to the payment of Tax Revenues. An "impermissible agreement" generally includes any agreement described in Regulations § 1.1414(e)(4)(ii), including the following: (A) An agreement to be personally liable for a tax that does not impose personal liability; (B) An agreement to provide additional credit support such as a guaranty or to pay unanticipated shortfalls in tax collections; 0 (C) An agreement as to the minimum market value of property subject to a property tax; (D) An agreement not to challenge or to seek deferral of a tax; and (E) Any similar agreement that causes a tax to fail to have a generally applicable manner of determination or collection. (3) The City will not permit any private security or payment with respect to the Bonds without first obtaining an Opinion of Bond Counsel. (e) No Private Loan. Not more than 5% of the Net Proceeds of the Bonds will be loaned directly or indirectly to any Non -Qualified User. (f) Management Agreements. As of the Issue Date, the City has no Management Agreements with Non -Qualified Users. During the Measurement Period the City has not and will not enter into or renew any Management Agreement with any Non -Qualified User without first obtaining an Opinion of Bond Counsel. (g) Leases. As of the Issue Date, the City has not entered into any leases of any portion of the Financed Facility other than Qualified Use Agreements. During the Measurement Period the City has not and will not enter into or renew any lease or similar agreement or arrangement other than a Qualified Use Agreement without first obtaining an Opinion of Bond Counsel. (h) Limit on Maturity of Bonds. A list of the assets included in the Financed Facility and a computation of the "average reasonably expected economic life" is attached to this Tax Agreement as Exhibit C. Based on this computation, the "average maturity" of the Bonds as computed by Bond Counsel, does not exceed 120% of the average reasonably expected economic life of the Financed Facility. (i) Expenditure of Bond Proceeds; Reimbursement. The governing body of the City adopted a resolution(s) declaring the intent of the City to finance the Financed Facility with tax- exempt bonds and to reimburse the City for expenditures made for the Financed Facility prior to the issuance of the Original Obligations. Except as described in the tax agreement associated with the Original Obligations, no portion of the Net Proceeds of the Original Obligations was used to reimburse an expenditure paid by the City more than 60 days prior to the date the resolution was adopted, except as described in the tax agreement for the Original Obligations. The City evidenced each allocation of the proceeds of the Original Obligations to an expenditure in writing. 0) Single Issue; No Other Issues. The Bonds constitute a single "issue" under Regulations § 1.150-1(c). No other debt obligations of the City (1) are being sold within 15 days of the sale of the Bonds, (2) are being sold under the same plan of financing as the Bonds, and (3) are expected to be paid from substantially the same source of funds as the Bonds (disregarding guarantees from unrelated parties, such as bond insurance). (k) Bonds Not Federally Guaranteed. The City will not take any action or permit any action to be taken which would cause any Bond to be "federally guaranteed" within the meaning of Code § 149(b). -10- (1) Hedge Bonds. At least 85% of the net sale proceeds (the sale proceeds of the Original Obligations less any sale proceeds invested in a reserve fund) of the Original Obligations were used to carry out the governmental purpose of the Original Obligations within 3 years after the issue date of the Original Obligations, and not more than 50% of the proceeds of the Original Obligations were invested in Investments having a substantially guaranteed Yield for 4 years or more. (m) Compliance with Future Tax Requirements. The City understands that the Code and the Regulations may impose new or different restrictions and requirements on the City in the future. The City will comply with such future restrictions that are necessary to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes. (n) Interest Rate Swap. As of the Issue Date, the City has not entered into an interest rate swap agreement or any other similar arrangement designed to modify its interest rate risk with respect to the Bonds. The City will not enter into any such arrangement in the future without obtaining an Opinion of Bond Counsel. (o) Guaranteed Investment Contract. As of the Issue Date, the City does not expect to enter into a Guaranteed Investment Contract for any Gross Proceeds of the Bonds. The City will be responsible for complying with Section 4.2(d) if it decides to enter into a Guaranteed Investment Contract at a later date. (p) Reports to IRS; Form 8038-G. The City will assist the Authority in filing all appropriate returns, reports and attachments to income tax returns required by the Code, including without limitation the Information Return for Tax -Exempt Governmental Obligations (Form 8038- G). The information contained in Parts II through VI of IRS Form 8038-G included in the Transcript was provided to the Authority and Bond Counsel by the City, and such information is true, complete and correct as of the Issue Date. No Bond proceeds are expected to be used to reimburse the City for expenditures incurred prior to the Issue Date. (q) Arbitrage Certifications. The facts, estimates and expectations recited in Article III of this Tax Agreement, regarding the purpose of the Bonds, the investment and expenditure of Bond proceeds, the Financed Facility, the funds and accounts created in the Indenture, the yield on investments and the computation and payment of arbitrage rebate, are true and accurate as of the Issue Date; and the City believes that the estimates and expectations recited in such Article are reasonable as of the Issue Date. The Authority, the Trustee, Gilmore & Bell, P.C., Bond Counsel, and the Underwriter may rely on such statements and expectations. The City does not expect that the Bond proceeds will be used in a manner that would cause any Bond to be an "arbitrage bond" within the meaning of Code § 148; and to the best of the City's knowledge and belief, there are no other facts, estimates or circumstances that would materially change such expectations. Section 2.3. Representations and Covenants of the Trustee. The Trustee represents and covenants to the Authority and the City as follows: (a) The Trustee will comply with the provisions of this Tax Agreement that apply to it as Trustee and any written letter or Opinion of Bond Counsel, specifically referencing the Bonds and received by the Trustee, that sets forth any action necessary to comply with any statute, regulation or ruling that may apply to it as Trustee and relating to reporting requirements or other -11- requirements necessary to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes. (b) The Trustee, acting on behalf of the Authority and the City, upon the written request of the Authority, may from time to time cause a firm of attorneys, consultants or independent accountants or an Investment banking firm to provide the Trustee and the Authority with such information as it may request in order for the Authority to determine all matters relating to (a) the Yield on the Bonds as it relates to any data or conclusions necessary to verify that the Bonds are not "arbitrage bonds" within the meaning of Code § 148, and (b) compliance with arbitrage rebate requirements of Code § 148(f). The City will pay all costs and expenses incurred in connection with supplying the foregoing information. (c) The Trustee, acting on behalf of the Authority and the City, will retain records related to the investment and expenditure of Gross Proceeds held in funds and accounts maintained by the Trustee and any records provided to the Trustee by the Authority or City related to the Post - Issuance Tax Requirements in accordance with Section 4.2(a) of this Tax Agreement. The Trustee will retain these records until three years following the final maturity of (i) the Bonds or (ii) any obligation issued to refund the Bonds; provided, however, if the Trustee is not retained to serve as bond trustee for any obligation issued to refund the Bonds (a "Refunding Obligation"), then the Trustee may satisfy its record retention duties under this Section 2.3(c) by providing copies of all records in its possession related to the Bonds to the bond trustee for the Refunding Obligation or other party agreed upon by the Authority and the City. Section 2.4. Survival of Representations and Covenants. All representations, covenants and certifications of the Authority, the City, and the Trustee contained in this Tax Agreement or in any certificate or other instrument delivered by the Authority, the City, or the Trustee under this Tax Agreement, will survive the execution and delivery of such documents and the issuance of the Bonds, as representations of facts existing as of the date of execution and delivery of the instruments containing such representations. The foregoing covenants of this Section will remain in full force and effect notwithstanding the defeasance of the Bonds. ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS Section 3.1. General. The purpose of this Article III is to certify, under Regulations § 1.148- 2(b), the Authority's and the City's expectations as to the sources, uses and Investment of Bond proceeds and other money, in order to support the Authority's conclusion that the Bonds are not arbitrage bonds. The person executing this Tax Agreement on behalf of the Authority is an officer of the Authority responsible for issuing the Bonds. Section 3.2. Reasonable Expectations. The facts, estimates and expectations set forth in this Article III are based upon and in reliance upon the Authority's understanding of the documents and certificates that comprise the Transcript, and the representations, covenants and certifications of the parties contained therein. To the Authority's knowledge, the facts and estimates set forth in this Tax Agreement are accurate, and the expectations of the Authority set forth in this Tax Agreement are reasonable. The Authority has no knowledge that would cause it to believe that the representations, warranties and certifications described in this Tax Agreement are unreasonable or inaccurate or may not be relied upon. -12- Section 3.3. Purpose of Financing. The Bonds are being issued for the purpose of providing funds to (a) current refund the Refunded Obligations, (b) fund a debt service reserve fund for the Bonds, and (c) pay costs of issuing the Bonds. The purpose of the refunding of the Refunded Obligations is to achieve interest cost savings through early redemption of the Refunded Obligations and create an orderly plan of finance. Section 3.4. Funds and Accounts. The following funds and accounts have been established under the Indenture: (1) Series 2017 Costs of Issuance Account within the Costs of Issuance Fund; (2) Series 2017 Debt Service Account within the Debt Service Fund; (3) Series 2017 Debt Service Reserve Fund; and (4) Series 2017 Rebate Account within the Rebate Fund (to the extent funded with sale proceeds or investment proceeds of the Bonds). In addition, the Special Allocation Fund has been established by the City and the Escrow Fund has been established in the custody of the Escrow Agent under the Escrow Agreement. Section 3.5. Amount and Use of Bond Proceeds and Other Money. (a) Amount of Bond Proceeds. The total proceeds to be received by the Authority from the sale of the Bonds will be as follows: Principal Amount $18,370,000.00 Net Reoffering Premium 1,767,404.35 Underwriting Discount (183,700.00) Total Proceeds Received by Authority 19.953.704.35 (b) Use of Bond Proceeds and other Money. The Bond proceeds and other amounts are expected to be allocated to expenditures as follows: (1) The accrued interest, if any, on the Bonds will be deposited in the Debt Service Fund; (2) $209,597.06, from proceeds of the Bonds, will be deposited in the Series 2017 Costs of Issuance Account of the Costs of Issuance Fund and will be used to pay costs of issuing the Bonds; (3) $1,000,000, from the debt service reserve fund held for the Refunded Obligations, and equal to the Debt Service Reserve Fund Requirement, will be deposited in the Series 2017 Debt Service Reserve Fund; and (4) $19,744,107.29 from proceeds of the Bonds, will be deposited in the Escrow Fund, to be used to pay the principal of, premium, if any, and interest on the Refunded Obligations in accordance therewith. Section 3.6. Multipurpose Issue. The Authority is applying the arbitrage rules to separate financing purposes of the issue that have the same initial temporary period as if they constitute a single issue for purposes pursuant to Regulations § 1. 1 48-9(h)(3)(i). -13- Section 3.7. No Advance Refunding. No proceeds of the Bonds will be used more than 90 days following the Issue Date to pay principal or interest on any other debt obligation. Section 3.8. Current Refunding. (a) Proceeds Used for Current Refunding. Proceeds of the Bonds will be used to pay principal and interest on the Refunded Obligations. All such proceeds shall be spent not later than 90 days after the Issue Date. (b) Transferred Proceeds. As of the Issue Date, the following unspent proceeds of the Refunded Obligations remain: approximately $856,770.77 in the debt service reserve fund for the Refunded Obligations. Upon discharge of any principal amount of the Refunded Obligations with proceeds of the Bonds, a ratable portion of the remaining unspent proceeds of the Refunded Obligations will become proceeds of the Bonds (determined in accordance Regulations § 1.148-9(b)). Section 3.9. Project Completion. The Financed Facility has previously been completed. Section 3.10. Financing Agreement/Sinking Funds. The Authority is making the proceeds of the Bonds available to the City under the Financing Agreement. The City is required under the Financing Agreement to make periodic payments to the Trustee in amounts sufficient to pay the principal of and interest on the Bonds. The City expects to use Tax Revenues deposited in the Special Allocation Fund to pay a portion of the debt service on the Bonds; however, the pledge of such funds to the payment of the debt service on the Bonds is subordinate to the pledge of such revenues securing the debt service payments on the Senior Horizons Bonds. Upon receipt, the Trustee will deposit such payments into the Debt Service Fund. Except for the Debt Service Fund and the Special Allocation Fund, neither the Authority nor the City has established or expects to establish any sinking fund or other similar fund that is expected to be used to pay principal of or interest on the Bonds. The Debt Service Fund and the Special Allocation Fund are used primarily to achieve a proper matching of revenues with principal and interest payments on the Bonds within each Bond Year, and the Authority expects that the Debt Service Fund and the Special Allocation Fund will qualify as a Bona Fide Debt Service Fund. Section 3.11. Reserve, Replacement and Pledged Funds. (a) Series 2017 Debt Service Reserve Fund. The Indenture establishes a debt service reserve fund to be funded at the time of issuance of the Bonds in an amount equal to $1,000,000, the Debt Service Reserve Fund Requirement. The amount to be held in the Series 2017 Debt Service Reserve Fund will not exceed the least of (1) 10% of the stated principal amount of the Bonds, (2) the maximum annual principal and interest requirements on the Bonds (determined as of the Issue Date, or (3) 125% of the average annual principal and interest requirements on the Bonds (determined as of the Issue Date). If the aggregate initial offering price of the Bonds to the public is less than 98% or more than 102% of par, such offering price must be used in clause (1) in lieu of the stated principal amount. Any amounts in the Series 2017 Debt Service Reserve Fund in excess of the Debt Service Reserve Fund Requirement will be transferred to the Debt Service Fund. (b) No Other Replacement or Pledged Funds. None of the Bond proceeds will be used as a substitute for other funds that were intended or earmarked to pay costs of the Financed Facility, and that instead has been or will be used to acquire higher Yielding Investments. Except for the Debt Service Fund and the Special Allocation Fund there is no other fund pledged or committed in a manner that provides a reasonable assurance that such funds would be available for payment of the principal of or interest on the Bonds if either the Authority or City encounters financial difficulty. -14- Section 3.12. Purpose Investment Yield. The proceeds of the Bonds will not be used to purchase an Investment for the purpose of carrying out the governmental purpose of the financing. Section 3.13. Issue Price and Yield on Bonds. (a) Issue Price. Based on the Underwriter's certifications in the Underwriter's Receipt for Bonds and Closing Certificate, the Authority and the City hereby elect to establish the issue prices of the Bonds pursuant to Regulations § 1.148-1(f)(2)(i) (relating to the so-called "general rule"). Therefore, the aggregate issue price of the Bonds for such purpose is $20,137,404.35. (b) Bond Yield. Based on the issue price, the Yield on the Bonds is 2.06138%, as computed by Bond Counsel and shown on Exhibit A. Neither the Authority nor the City has entered into an interest rate swap agreement with respect to any portion of the proceeds of the Bonds. Section 3.14. Miscellaneous Arbitrage Matters. (a) No Abusive Arbitrage Device. The Bonds are not and will not be part of a transaction or series of transactions that has the effect of (1) enabling the Authority or the City to exploit the difference between tax-exempt and taxable interest rates to gain a material financial advantage, and (2) overburdening the tax-exempt bond market. (b) No Over -Issuance. The sale proceeds of the Bonds, together with expected Investment earnings thereon and other money contributed by the Authority or the City, do not exceed the cost of the governmental purpose of the Bonds as described above. Section 3.15. Conclusion. On the basis of the facts, estimates and circumstances set forth in this Tax Agreement, the Authority does not expect that the Bond proceeds will be used in a manner that would cause any Bond to be an "arbitrage bond" within the meaning of Code § 148 and the Regulations. ARTICLE IV POST -ISSUANCE TAX REQUIREMENTS, POLICIES AND PROCEDURES Section 4.1. General. (a) Purpose of Article. The purpose of this Article IV is to supplement the Tax Compliance Procedure and to set out specific policies and procedures governing compliance with the federal income tax requirements that apply after the Bonds are issued. The Authority and the City recognize that interest on the Bonds will remain excludable from gross income only if Post -Issuance Tax Requirements are followed after the Issue Date. The Authority and the City further acknowledge that written evidence substantiating Post -Issuance Tax Requirements must be retained in order to permit the Bonds to be refinanced with tax-exempt obligations and substantiate the position that interest on the Bonds is exempt from gross income in the event of an audit of the Bonds by the IRS. (b) Written Policies and Procedures of the Authority. The Authority intends for the Tax Compliance Procedure, as supplemented by this Tax Agreement, to be its primary written policies and procedures for monitoring compliance with the Post -Issuance Tax Requirements for the Bonds and to supplement any other formal policies and procedures related to tax compliance that the Authority has -15- established. The provisions of this Tax Agreement are intended to be consistent with the Tax Compliance Procedure. In the event of any inconsistency between the Tax Compliance Procedure and this Tax Agreement, the terms of this Tax Agreement will govern. (c) City Responsible for Post -Issuance Tax Requirements. The Tax Compliance Procedure contemplates that the City and the City's Bond Compliance Officer will follow the Tax Compliance Procedure. The Authority and the City acknowledge that the investment and expenditure of proceeds of the Bonds are within the control of the City. For these reasons, the Authority is relying on the City and the City Bond Compliance Officer to carry out the Post -Issuance Tax Requirements as set out in this Tax Agreement and the Tax Compliance Procedure. The City agrees to undertake these obligations and the obligations imposed on it by the Tax Compliance Procedure. The Authority will cooperate with the City when necessary to enable the City to fulfill its Post -Issuance Tax Requirements. Subject to this Section 4.1(c) and 4.1(d), this cooperation includes, but is not limited to, signing Form 8038-T in connection with the payment of arbitrage rebate or yield reduction payments, participating in any federal income tax audit of the Bonds or related proceedings under a voluntary compliance agreement procedure (VCAP) or a remedial action procedure pursuant to Regulations § 1.141-12. (d) Opinion of Bond Counsel. Prior to taking any action requested by the City Bond Compliance Officer for the purpose of carrying out the Post -Issuance Tax Requirements, the Authority is entitled to seek and receive an Opinion of Bond Counsel acceptable to the Authority. (e) Payment of Costs of Post -Issuance Tax Requirements and Indemnifications. Neither the Authority nor the Trustee is required to incur any cost in connection with any action taken related to the Post -Issuance Tax Requirements, it being the intent of the parties that all costs of the Post -Issuance Tax Requirements will be paid by, or immediately reimbursed by, the City. With respect to all actions requested of the Authority by the City involving Post -Issuance Tax Requirements, the Authority is entitled to recover from the City all legal and other fees and expenses incurred and has all rights of indemnification against the City generally contained in the Financing Agreement and the Indenture. Section 4.2. Record Keeping; Use of Bond Proceeds and Use of Financed Facilities. (a) Record Keeping. The City Bond Compliance Officer will maintain the Tax -Exempt Bond File for the Bonds in accordance with the Tax Compliance Procedure. Unless otherwise specifically instructed in a written Opinion of Bond Counsel or to the extent otherwise provided in this Tax Agreement, the City Bond Compliance Officer shall retain records related to Post -Issuance Tax Requirements until 3 years following the final maturity of (i) the Bonds or (ii) any obligation issued to refund the Bonds. Any records maintained electronically must comply with Section 4.01 of Revenue Procedure 97-22, which generally provides that an electronic storage system must (1) ensure an accurate and complete transfer of the hardcopy records which indexes, stores, preserves, retrieves and reproduces the electronic records, (2) include reasonable controls to ensure integrity, accuracy and reliability of the electronic storage system and to prevent unauthorized alteration or deterioration of electronic records, (3) exhibit a high degree of legibility and readability both electronically and in hardcopy, (4) provide support for other books and records of the Authority and (5) not be subject to any agreement that would limit the ability of the IRS to access and use the electronic storage system on the Authority's premises. If requested, the City Bond Compliance Officer will provide the Authority with a complete copy of the Tax -Exempt Bond File. (b) Accounting and Allocation of Bond Proceeds to Expenditures. Proceeds of the Bonds and other money will be used as described in Sections 3.5 and 3.8. The City Bond Compliance Officer will maintain accounting records showing the investment and expenditure of this money as part of the Tax - Exempt Bond File. The City Bond Compliance Officer has prepared written substantiation records of the -16- allocation of proceeds of the Original Obligations to the Financed Facility. This allocation is summarized on Exhibit C and is intended to constitute the Final Written Allocation for the Original Obligations. (c) Annual Compliance Checklist. Attached as Exhibit D is a form of Annual Compliance Checklist for the Bonds. The City Bond Compliance Officer will prepare and complete an Annual Compliance Checklist for the Financed Facility at least annually in accordance with the Tax Compliance Procedure. In the event the Annual Compliance Checklist identifies a deficiency in compliance with the requirements of this Tax Agreement, the City Bond Compliance Officer will consult with the Authority and in conjunction with the Authority will take the actions identified in an Opinion of Bond Counsel or the Tax Compliance Procedure to correct any deficiency. (d) Opinions ofBond Counsel. The City Bond Compliance Officer is responsible for obtaining and delivering to the Authority and the Trustee any Opinion of Bond Counsel required under the provisions of this Tax Agreement, including any Opinion of Bond Counsel required by this Tax Agreement or the Annual Compliance Checklist. Section 4.3. Temporary Periods/Yield Restriction. Except as described below, Gross Proceeds must not be invested at a Yield greater than the Yield on the Bonds: (a) Series 2017 Cost oflssuance Account. Amounts held in the Series 2017 Costs of Issuance Account in the Costs of Issuance Fund may be invested without Yield restriction for 13 months. (b) Debt Service Fund and Special Allocation Fund. To the extent that the Debt Service Fund and the Special Allocation Fund qualify as a Bona Fide Debt Service Fund, money in such accounts may be invested without Yield restriction for 13 months after the date of deposit. Earnings on such amounts may be invested without Yield restriction for 1 year after the date of receipt of such earnings. (c) Series 2017 Debt Service Reserve Fund. Money in the Series 2017 Debt Service Reserve Fund may be invested without Yield restriction up to the least of (1) 10% of the stated principal amount of the Bonds, (2) the maximum annual principal and interest requirements on the Bonds (determined as of the Issue Date), or (3)125% of the average annual principal and interest requirements on the Bonds (determined as of the Issue Date). If the aggregate initial offering price of the Bonds to the public is less than 98% or more than 102% of par, such offering price must be used in clause (1) in lieu of the stated principal amount. (d) Proceeds Allocable to Current Refunding. Bond proceeds deposited in the Escrow Fund or otherwise allocable to a current refunding of the Refunded Obligations (see Section 3.8) may be invested without Yield restriction for up to 90 days after the Issue Date. (e) Minor Portion. In addition to the amounts described above, Gross Proceeds not exceeding the Minor Portion may be invested without Yield restriction. Section 4.4. Procedures for Establishing Fair Market Value. (a) General. No Investment may be acquired with Gross Proceeds for an amount (including transaction costs) in excess of the fair market value of such Investment, or sold or otherwise disposed of for an amount (including transaction costs) less than the fair market value of the Investment. The fair market value of any Investment is the price a willing buyer would pay to a willing seller to acquire the Investment in a bona fide, arm's-length transaction. Fair market value will be determined in accordance with § 1.148-5 of the Regulations. -17- (b) Established Securities Market. Except for Investments purchased for a Yield -restricted defeasance escrow, if an Investment is purchased or sold in an arm's-length transaction on an established securities market (within the meaning of Code § 1273), the purchase or sale price constitutes the fair market value. Where there is no established securities market for an Investment, market value must be established using one of the paragraphs below. The fair market value of Investments purchased for a Yield -restricted defeasance escrow must be determined in a bona fide solicitation for bids that complies with § 1.148-5 of the Regulations. (c) Certificates of Deposit. The purchase price of a certificate of deposit (a "CD") is treated as its fair market value on the purchase date if (1) the CD has a fixed interest rate, a fixed payment schedule, and a substantial penalty for early withdrawal, (2) the Yield on the CD is not less than the Yield on reasonably comparable direct obligations of the United States, and (3) the Yield is not less than the highest Yield published or posted by the CD issuer to be currently available on reasonably comparable CDs offered to the public. (d) Guaranteed Investment Contracts. The purchase price of a Guaranteed Investment Contract is treated as its fair market value on the purchase date if all of the following requirements are met: (1) Bona Fide Solicitation for Bids. The Authority or the Trustee makes a bona fide solicitation for the Guaranteed Investment Contract, using the following procedures: (A) The bid specifications are in writing and are timely forwarded to potential providers, or are made available on an internet website or other similar electronic media that is regularly used to post bid specifications to potential bidders. A writing includes a hard copy, a fax, or an electronic e-mail copy. (B) The bid specifications include all "material" terms of the bid. A term is material if it may directly or indirectly affect the Yield or the cost of the Guaranteed Investment Contract. (C) The bid specifications include a statement notifying potential providers that submission of a bid is a representation (i) that the potential provider did not consult with any other potential provider about its bid, (ii) that the bid was determined without regard to any other formal or informal agreement that the potential provider has with the Authority, the City, the Trustee or any other person (whether or not in connection with the bond issue), and (iii) that the bid is not being submitted solely as a courtesy to the Authority, the City, the Trustee or any other person, for purposes of satisfying the requirements of the Regulations. (D) The terms of the bid specifications are "commercially reasonable." Aterm is commercially reasonable if there is a legitimate business purpose for the term other than to increase the purchase price or reduce the Yield of the Guaranteed Investment Contract. (E) The terms of the solicitation take into account the City's reasonably expected deposit and draw -down schedule for the amounts to be invested. (F) All potential providers have an equal opportunity to bid. If the bidding process affords any opportunity for a potential provider to review other bids before providing a bid, then providers have an equal opportunity to bid only if all potential providers have an equal opportunity to review other bids. Thus, no potential provider may -18- be given an opportunity to review other bids that is not equally given to all potential providers (that is no exclusive "last look"). (G) At least 3 "reasonably competitive providers" are solicited for bids. A reasonably competitive provider is a provider that has an established industry reputation as a competitive provider of the type of Investments being purchased. (2) Bids Received. The bids received must meet all of the following requirements: (A) At least 3 bids are received from providers that were solicited as described above and that do not have a "material financial interest" in the issue. For this purpose, (i) a lead underwriter in a negotiated underwriting transaction is deemed to have a material financial interest in the issue until 15 days after the Issue Date of the issue, (ii) any entity acting as a financial advisor with respect to the purchase of the Guaranteed Investment Contract at the time the bid specifications are forwarded to potential providers has a material financial interest in the issue, and (iii) a provider that is a related party to a provider that has a material financial interest in the issue is deemed to have a material financial interest in the issue. (B) At least 1 of the 3 bids received is from a reasonably competitive provider, as defined above. (C) If an agent or broker is used to conduct the bidding process, the agent or broker did not bid to provide the Guaranteed Investment Contract. (3) Winning Bid. The winning bid is the highest Yielding bona fide bid (determined net of any broker's fees). (4) Fees Paid. The obligor on the Guaranteed Investment Contract certifies the administrative costs that it pays (or expects to pay, if any) to third parties in connection with supplying the Guaranteed Investment Contract. (5) Records. The City and the Trustee retains the following records with the bond documents until 3 years after the last outstanding Bond is redeemed: (A) A copy of the Guaranteed Investment Contract. (B) The receipt or other record of the amount actually paid for the Guaranteed Investment Contract, including a record of any administrative costs paid by the Authority or Trustee, and the certification as to fees paid, described in paragraph (d)(4) above. (C) For each bid that is submitted, the name of the person and entity submitting the bid, the time and date of the bid, and the bid results. (D) The bid solicitation form and, if the terms of Guaranteed Investment Contract deviated from the bid solicitation form or a submitted bid is modified, a brief statement explaining the deviation and stating the purpose for the deviation. (e) Other Investments. If an Investment is not described above, the fair market value may be established through a competitive bidding process, as follows: -19- (1) at least 3 bids on the Investment must be received from persons with no financial interest in the Bonds (e.g., as underwriters or brokers); and (2) the Yield on the Investment must be equal to or greater than the Yield offered under the highest bid. Section 4.5. Certain Gross Proceeds Exempt from the Rebate Requirement. (a) General. Aportion ofthe Gross Proceeds of the Bonds may be exempt from rebate pursuant to one or more of the following exceptions. The exceptions typically will not apply with respect to all Gross Proceeds of the Bonds and will not otherwise affect the application of the Investment limitations described in Section 4.3. Unless specifically noted, the obligation to compute, and if necessary, to pay rebate as set forth in Section 4.6 applies even if a portion of the gross proceeds of the Bonds is exempt from the rebate requirement. To the extent all or a portion of the Bonds is exempt from rebate the Rebate Analyst may account for such fact in connection with its preparation of a rebate report described in Section 4.6. The Authority may defer the final rebate Computation Date and the payment of rebate for the Bonds to the extent permitted by Regulations § 1.148-7(b)(1) and § 1.148-3(e)(2) but only in accordance with specific written instructions provided by the Rebate Analyst. (b) Applicable Spending Exceptions. The following optional rebate spending exceptions can apply to the Bonds: 6 -month Exception (Code § 148(f)(4)(B) and Regulations § 1.148-7(c)). (c) Special Elections Made with Respect to Spending Exception Elections. No special elections are being made in connection with the application of the spending exceptions. (d) Bona Fide Debt Service Fund. To the extent that the Debt Service Fund and the Special Allocation fund qualify as a Bona Fide Debt Service Fund, Investment earnings in the accounts cannot be taken into account in computing arbitrage rebate. (e) Documenting Application of Spending Exception. At any time prior to the first Computation Date, the Authority or City may engage the Rebate Analyst to determine whether one or more spending exceptions has been satisfied, and the extent to which the Authority and City must continue to comply with Section 4.6 hereof. (f) General Requirements for Spending Exception. The following general requirements apply in determining whether a spending exception is met. (1) Using Adjusted Gross Proceeds to pay principal of any Bonds is not taken into account as an expenditure for purposes of meeting any of the spending tests. (2) The 6 -month spending exception generally is met if all Adjusted Gross Proceeds of the Bonds are spent within 6 months following the Issue Date. The test may still be satisfied even if up to 5% of the sale proceeds remain at the end of the initial 6 -month period, so long as this amount is spent within 1 year of the Issue Date. -20- Section 4.6. Computation and Payment of Arbitrage Rebate. (a) Rebate Fund. The Trustee will keep the Rebate Fund separate from all other funds and will administer the Rebate Fund under this Tax Agreement. Any Investment earnings derived from the Rebate Fund will be credited to the Rebate Fund, and any Investment loss will be charged to the Rebate Fund. (b) Computation of Rebate Amount. The Trustee will provide the Rebate Analyst Investment reports relating to each fund held by the Trustee that contains Gross Proceeds of the Bonds at such times as reports are provided to the Authority, and not later than 10 days following each Computation Date. The City will provide the Rebate Analyst with copies of Investment reports for any funds containing Gross Proceeds that are held by a party other than the Trustee annually as of the end of each Bond Year and not later than 10 days following each Computation Date. Each Investment report provided to the Rebate Analyst will contain a record of each Investment, including (1) purchase date, (2) purchase price, (3) information establishing the fair market value on the date such Investment was allocated to the Bonds, (4) any accrued interest paid, (5) face amount, (6) coupon rate, (7) frequency of interest payments, (8) disposition price, (9) any accrued interest received, and (10) disposition date. Such records may be supplied in electronic form. The Rebate Analyst will compute rebate following each Computation Date and deliver a written report to the Trustee, the Authority and the City together with an opinion or certificate of the Rebate Analyst stating that arbitrage rebate was determined in accordance with the Regulations. Each report and opinion will be provided not later than 45 days following the Computation Date to which it relates. In performing its duties, the Rebate Analyst may rely, in its discretion, on the correctness of financial analysis reports prepared by other professionals. If the sum of the amount on deposit in the Rebate Fund and the value of prior rebate payments is less than the arbitrage rebate due, the City will, within 55 days after such Computation Date, pay to the Trustee the amount of the deficiency for deposit into the Rebate Fund. If the sum of the amount on deposit in the Rebate Fund and the value of prior rebate payments is greater than the Rebate Amount, the Trustee will transfer such surplus in the Rebate Fund to the Debt Service Fund. After the final Computation Date or at any other time if the Rebate Analyst has advised the Trustee, any money left in the Rebate Fund will be paid to the City and may be used for any purpose not prohibited by law. (c) Rebate Payments. Within 60 days after each Computation Date, the Trustee must pay (but solely from money in the Rebate Fund or provided by the City) to the United States the rebate amount then due, determined in accordance with the Regulations. Each payment must be (1) accompanied by IRS Form 8038-T and such other forms, documents or certificates as may be required by the Regulations, and (2) mailed or delivered to the IRS at the address shown below, or to such other location as the IRS may direct: Internal Revenue Service Center Ogden, UT 84201 Section 4.7. Successor Rebate Analyst. If the firm acting as the Rebate Analyst resigns or becomes incapable of acting for any reason, or if the City or the Authority desires that a different firm act as the Rebate Analyst, then the City by an instrument or concurrent instruments in writing delivered to the firm then serving as the Rebate Analyst and any other party to this Tax Certificate, will engage a successor Rebate Analyst. In each case the successor Rebate Analyst must be a firm of nationally recognized bond counsel or a firm of independent certified public accountants and such firm must expressly agree to undertake the responsibilities assigned to the Rebate Analyst hereunder. In the event the firm acting as the Rebate Analyst resigns or becomes incapable of acting for any reason and the City fails to appoint a qualified successor Rebate Analyst within 30 days following notice of such resignation then the Trustee will appoint a firm to act as the successor Rebate Analyst. 904E Section 4.8. Rebate Report Records. The Trustee and the City will retain copies of each arbitrage rebate report and opinion until 3 years after the final Computation Date. Section 4.9. Filing Requirements. The Trustee, the Authority, and the City will file or cause to be filed with the Internal Revenue Service such reports or other documents as are required by the Code in accordance with an Opinion of Bond Counsel. Section 4.10. Survival after Defeasance. Notwithstanding anything in the Indenture to the contrary, the obligation to pay arbitrage rebate to the United States will survive the payment or defeasance of the Bonds. Section 4.11. Tax Audits. The Authority and the City acknowledge that the IRS has a routine tax audit program in place and that the cost of professional representation and compliance with requests for records and other information that are a part of such an audit can be substantial, even if no violation of tax laws are found. The Authority and the City also recognize that under current administrative procedures the IRS must direct audit inquiries to the Authority, even though the City has the primary responsibility for maintaining the exclusion of interest on the Bonds from gross income for federal income tax purposes. Upon receipt of notice of the commencement of any audit of the Bonds, the City or the Authority will notify the other promptly. Throughout the term of the audit and any subsequent proceedings, the Authority and the City will provide copies to one another of any correspondence received from or transmitted to the IRS by the other. The Authority may hire its own legal counsel to represent its interests in connection with the audit or in any further proceeding that results from the audit. At the request of the Authority, the City will hire legal counsel to represent it in the audit. The City, upon written request of the Authority, will assume responsibility for responding to information and document requests made by the auditor that are within the knowledge or possession of the City. Promptly on demand by the Authority in writing, the City will pay costs incurred by the Authority in connection with the audit or any legal or administrative proceeding resulting from the audit (including the Authority's reasonable attorney's fees and expenses). Neither the Authority nor the City shall have the right to represent or otherwise bind the other party in connection with any settlement related to the tax-exempt status of the Bonds. Nothing contained in this section is intended to limit the rights of the Authority to recovery under the Financing Agreement or any other agreement or certificate executed in connection with the issuance of the Bonds. ARTICLE V MISCELLANEOUS PROVISIONS Section 5.1. Term of Tax Agreement. This Tax Agreement will be effective concurrently with the issuance and delivery of the Bonds and will continue in force and effect until the principal of, redemption premium, if any, and interest on all Bonds have been fully paid and all such Bonds are cancelled; provided that, the provisions of Article IV of this Tax Agreement regarding payment of arbitrage rebate and all related penalties and interest will remain in effect until all such amounts are paid to the United States. Section 5.2. Amendments. This Tax Agreement may be amended from time to time by the parties to this Tax Agreement without notice to or the consent of any of the Bondowners, but only if such amendment is in writing and is accompanied by an Opinion of Bond Counsel to the effect that, under then existing law, assuming compliance with this Tax Agreement as so amended such amendment will not cause interest on any Bond to be included in gross income for federal income tax purposes. No such amendment will become effective until the Authority, the City and the Trustee receive this Opinion of Bond Counsel. -22- Section 5.3. Opinion of Bond Counsel. The Authority, the City, and the Trustee may deviate from the provisions of this Tax Agreement if furnished with an Opinion of Bond Counsel addressed to each of them to the effect that the proposed deviation will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes. The Authority, the City, and the Trustee will comply with any further or different instructions provided in an Opinion of Bond Counsel to the effect that the further or different instructions need to be complied with in order to maintain the validity of the Bonds or the exclusion from gross income of interest on the Bonds. Section 5.4. Reliance. In delivering this Tax Agreement, the Authority, the City, and the Trustee are making only those certifications, representations and agreements as are specifically attributed to them in this Tax Agreement. The balance of the certifications, representations and agreements contained in this Tax Agreement are those of the Authority or the City and the Trustee is relying on the Authority and/or the City with respect to same. None of the Authority, the City or the Trustee is aware of any facts or circumstances which would cause it to question the accuracy of the facts, circumstances, estimates or expectations of any other party providing certifications as part of this Tax Agreement and, to the best of the knowledge of the Authority and the City, those facts, circumstances, estimates and expectations are reasonable. The parties to this Tax Agreement understand that its certifications will be relied upon by the law firm of Gilmore & Bell, P.C., in rendering its opinion as to the validity of the Bonds and the exclusion from federal gross income of the interest on the Bonds. Section 5.5. Severability. If any provision in this Tax Agreement or in the Bonds is determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not be affected or impaired. Section 5.6. Benefit of Agreement. This Tax Agreement is binding upon the Authority, the City, and the Trustee and their respective successors and assigns, and inures to the benefit of the parties to this Tax Agreement and the owners of the Bonds. Nothing in this Tax Agreement or in the Indenture or the Bonds, express or implied, gives to any person, other than the parties to this Tax Agreement and their successors and assigns, and the owners of the Bonds, any benefit or any legal or equitable right, remedy or claim under this Tax Agreement. Section 5.7. Default; Breach and Enforcement. Any misrepresentation of a party contained herein or any breach of a covenant or agreement contained in this Tax Agreement may be pursued by the Bondowners or the other party or parties to this Tax Agreement pursuant to the terms of the Indenture or any other document which references this Tax Agreement and gives remedies for a misrepresentation or breach thereof. Section 5.8. Execution in Counterparts. This Tax Agreement may be executed in any number of counterparts, each of which so executed will be deemed to be an original, but all such counterparts will together constitute the same instrument. Section 5.9. Governing Law. This Tax Agreement will be governed by and construed in accordance with the laws of the State of Missouri. Section 5.10. Electronic Transactions. The transaction described in this Tax Agreement may be conducted, and related documents may be stored, by electronic means. [Remainder of this page intentionally left blank] Pall The parties to this Tax Agreement have caused this Tax Compliance Agreement to be duly executed by their duly authorized officers as of »-:s» Date of the Bonds. THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI 4—\ By: Leland Finley, President 01 CITY OF RIVERSIDE, MISSOURI IM -W IN, 1 4 , z M" Tax Compliance Agreement S-2 UMB ;BANK, N.A., as Trustee By. NaZ: Douglas Title: Senior Vice President "Tax Compliance Agreement S-3 EDIT A DEBT SERVICE SCHEDULE AND PROOF OF BOND YIELD Oct 19, 2017 2:19 pm Prepared by Gilmore & Bell, P.C. (Finance 7.017) Page 2 BOND DEBT SERVICE The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 Period Ending Principal Coupon Interest Debt Service Annual Debt Service Bond Balance Total Bond Value 11/01/2017 18,370,000 18,370,000 05/01/2018 2,000,000 2.000% 364,025 2,364,025 2,364,025 16,370,000 16,370,000 11/01/2018 344,025 344,025 16,370,000 16,370,000 05/01/2019 2,095,000 3.000% 344,025 2,439,025 2,783,050 14,275,000 14,275,000 11/01/2019 312,600 312,600 14,275,000 14,275,000 05/01/2020 2,160,000 3.000% 312,600 2,472,600 2,785,200 12,115,000 12,115,000 11/01/2020 280,200 280,200 12,115,000 12,115,000 05/01/2021 2,225,000 4.000% 280,200 2,505,200 2,785,400 9,890,000 9,890,000 11/01/2021 235,700 235,700 9,890,000 9,890,000 05/01/2022 2,310,000 4.000% 235,700 2,545,700 2,781,400 7,580,000 7,580,000 11/01/2022 189,500 189,500 7,580,000 7,580,000 05/01/2023 2,405,000 5.000% 189,500 2,594,500 2,784,000 5,175,000 5,175,000 11/01/2023 129,375 129,375 5,175,000 5,175,000 05/01/2024 2,525,000 5.000% 129,375 2,654,375 2,783,750 2,650,000 2,650,000 11/01/2024 66,250 66,250 2,650,000 2,650,000 05/01/2025 2,650,000 5.000% 66,250 2,716,250 2,782,500 18,370,000 3,479,325 21,849,325 21,849,325 This information is provided based on the factual information and assutnptioas provided to Gilmore & Bell. P.C. by a party to or a representative of a parry to the proposed trausactiou. This information is intended to provide factual information only and is provided in conjunction with our legal representation. It is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not a financial advisor or a "municipal advisor" as defined in the Securities Exchange Act of 1934, as amended. Oct 19, 2017 2:19 pm Prepared by Gilmore & Bell, P.C. (Finance 7.017) Page 3 BOND PRICING The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 Maturity Bond Component Date Amount Rate Yield Price Premium (-Discount) Serial Bonds: 11/01/2017 First Coupon 05/01/2018 Par Amount 18,370,000.00 05/01/2018 2,000,000 2.000% 1.201% 100.397 7,940.00 05/01/2019 2,095,000 3.000% 1.401% 102.366 49,567.70 05/01/2020 2,160,000 3.000% 1.580% 103.467 74,887.20 05/01/2021 2,225,000 4.000% 1.720% 107.712 171,592.00 05/01/2022 2,310,000 4.000% 1.910% 108.971 207,230.10 05/01/2023 2,405,000 5.000% 2.070% 115.157 364,525.85 05/01/2024 2,525,000 5.000% 2.240% 116.608 419,352.00 05/01/2025 2,650,000 5.000% 2.390% 117.823 472,309.50 18,370,000 1,767,404.35 Dated Date 11/01/2017 Delivery Date 11/01/2017 First Coupon 05/01/2018 Par Amount 18,370,000.00 Premium 1,767,404.35 Production Underwriter's Discount Purchase Price Accrued Interest Net Proceeds 20,137,404.35 109.621145% (183,700.00) (1.000000%) 19,953,704.35 108.621145% 19,953,704.35 This information is provided based on the factual information and assumptions provided to Gilmore & Hell. P.C. by a party to or a representative of a party to the proposed transaction. This information is intended to provide factual information only and is provided in conjunction with our legal representation. It is not intended as financial advice or a finaucial recommendation to any party. Gilmore & Bell, P.C. is not a fuumcial advisor or a -municipal advisor" as defined in the Securities Exchange Act of 1934, as amended. Oct 19, 2017 2:19 pm Prepared by Gilmore & Bell, P.C. (Finance 7.017) Page 5 PROOF OF ARBITRAGE YIELD The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 Present Value PV to 11/01/2017 Date Debt Service Factor @ 2.0613795191% 05/01/2018 2,364,025.00 0.989798251 2,339,907.81 11/01/2018 344,025.00 0.979700577 337,041.49 05/01/2019 2,439,025.00 0.969705918 2,365,136.98 11/01/2019 312,600.00 0.959813221 300,037.61 05/01/2020 2,472,600.00 0.950021447 2,349,023.03 11/01/2020 280,200.00 0.940329567 263,480.34 05/01/2021 2,505,200.00 0.930736560 2,331,681.23 11/01/2021 235,700.00 0.921241419 217,136.60 05/01/2022 2,545,700.00 0.911843145 2,321,279.10 11/01/2022 189,500.00 0.902540750 171,031.47 05/01/2023 2,594,500.00 0.893333256 2,317,753.13 11/01/2023 129,375.00 0.884219694 114,395.92 05/01/2024 2,654,375.00 0.875199107 2,323,106.63 11/01/2024 66,250.00 0.866270545 57,390.42 05/01/2025 2,716,250.00 0.857433070 2,329,002.58 21,849,325.00 20,137,404.35 Proceeds Summary Delivery date 11/01/2017 Par Value 18,370,000.00 Premium (Discount) 1,767,404.35 Target for yield calculation 20,137,404.35 This information is provided based on the factual information and assumptions provided to Gilmore & Bell. P.C. by a party to or a representative of a parry to the proposed transaction. This information is intended to provide factual mformation only and is provided in conjunction with our legal representation. It is not intended as financial advice or a financial recommendation to any parry. Gilmore & Bell, P.C. is not a financial advisor or a "municipal advisor"as defined in the Securities Exchange Act of 1934, as amended. Oct 19, 2017 2:19 pm Prepared by Gilmore & Bell, P.C. (Finance 7.017) Page 6 FORM 8038 STATISTICS The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 Dated Date 11/01/2017 Delivery Date 11/01/2017 Redemption Bond Component Date Principal Coupon Price Issue Price at Maturity Serial Bonds: 05/01/2018 2,000,000.00 2.000% 100.397 2,007,940.00 2,000,000.00 05/01/2019 2,095,000.00 3.000% 102.366 2,144,567.70 2,095,000.00 05/01/2020 2,160,000.00 3.000% 103.467 2,234,887.20 2,160,000.00 05/01/2021 2,225,000.00 4.000% 107.712 2,396,592.00 2,225,000.00 05/01/2022 2,310,000.00 4.000% 108.971 2,517,230.10 2,310,000.00 05/01/2023 2,405,000.00 5.000% 115.157 2,769,525.85 2,405,000.00 05/01/2024 2,525,000.00 5.000% 116.608 2,944,352.00 2,525,000.00 05/01/2025 2,650,000.00 5.000% 117.823 3,122,309.50 2,650,000.00 18,370,000.00 20,137,404.35 18,370,000.00 Stated Weighted Maturity Interest Issue Redemption Average Date Rate Price at Maturity Maturity Yield Final Maturity 05/01/2025 5.000% 3,122,309.50 2,650,000.00 Entire Issue 20,137,404.35 18,370,000.00 4.3358 2.0614% Proceeds used for accrued interest 0.00 Proceeds used for bond issuance costs (including underwriters' discount) 393,297.06 Proceeds used for credit enhancement 0.00 Proceeds allocated to reasonably required reserve or replacement fund 1,000,000.00 Proceeds used to currently refund prior issues 19,744,107.29 Proceeds used to advance refund prior issues 0.00 Remaining weighted average maturity of the bonds to be currently refunded 4.2341 Remaining weighted average maturity of the bonds to be advance refunded 0.0000 This information is provided based on the factual information and assumptions provided to Gilmore & Bell. P.C. by a party to or a representative of a party to the proposed transaction. This information is intended to provide factual information only and is provided in conjunction with our legal representation. It is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not a financial advisor or a "municipal advisor' as defied in the Securities Exchange Act of 1934, as amended. Oct 19, 2017 2:19 pm Prepared by Gilmore & Bell, P.C. (Finance 7.017) Page 7 FORM 8038 STATISTICS The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 Refunded Bonds Bond Component Date Principal Coupon Price Issue Price Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project), Series 2007A: SERIAL 05/01/2021 1,615,000.00 4.250% 97.625 1,576,643.75 TERM2020 05/01/2018 1,525,000.00 5.000% 104.884 1,599,481.00 TERM2020 05/01/2019 1,600,000.00 5.000% 104.884 1,678,144.00 TERM2020 05/01/2020 1,680,000.00 5.000% 104.884 1,762,051.20 TERM2027 05/01/2022 1,840,000.00 5.000% 103.373 1,902,063.20 TERM2027 05/01/2023 1,935,000.00 5.000% 103.373 2,000,267.55 TERM2027 05/01/2024 2,030,000.00 5.000% 103.373 2,098,471.90 TERM2027 05/01/2025 2,130,000.00 5.000% 103.373 2,201,844.90 TERM2027 05/01/2026 940,000.00 5.000% 103.373 971,706.20 15,295,000.00 15,790,673.70 Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project), Series 200713: TERM 05/01/2018 630,000.00 4.500% 99.375 626,062.50 TERM 05/01/2019 660,000.00 4.500% 99.375 655,875.00 TERM 05/01/2020 690,000.00 4.500% 99.375 685,687.50 TERM 05/01/2021 720,000.00 4.500% 99.375 715,500.00 TERM 05/01/2022 750,000.00 4.500% 99.375 745,312.50 TERM 05/01/2023 785,000.00 4.500% 99.375 780,093.75 TERM 05/01/2024 135,000.00 4.500% 99.375 134,156.25 4,370,000.00 4,342,687.50 19,665,000.00 20,133,361.20 Remaining Last Weighted Call Issue Average Date Date Maturity Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project), Series 2007A 12/01/2017 05/09/2007 4.5099 Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project), Series 2007B 12/01/2017 05/09/2007 3.2311 All Refunded Issues 12/01/2017 4.2341 Tlus information is provided based on the factual information and assumptions provided to Gilmore & Bell. P.C. by a party to or a representative of a party to the proposed transaction_ This information is intended to provide factual information only and is provided in conjunction with our legal representation. It is not intended as financial advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not a financial advisor or a -municipal advisor" as defined in the Securities Exchange Act of I934, as amended. Oct 19, 2017 2:19 pm Prepared by Gilmore & Bell, P.C. (Finance 7.017) Page 8 FORMULA VERIFICATION The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 Component Formula Value RES 10% of Bond Proceeds 2,013,740.44 RES Maximum annual Debt Service 2,785,400.00 RES 125% of average annual Debt Service 3,641,554.17 RES 1,000,000 1,000,000.00 RES Reserve Fund 1,000,000.00 This information is provided based on the factual information and assumptions provided to Gilmore & Bell P.C. by a party to or a representative of a party to the proposed transaction. This information is intended to provide factual information only and is provided in conjunction with our legal representation. It is not Intended as financial advice or a financial recommendation to any party. Gilmore & Bell, P.C. is not a financial advisor or a "municipal advisor' as defined in the Securities Exchange Act of 1934, as amended. EXHIBIT B IRS FORM 8038-G Foran 8038-G Information Return for Tax -Exempt Governmental Obligations (Rev. September 2011) ► Under Internal Revenue Code section 149(e) OMB No. 1545-0720 Do -See separate instructions. Department of the Treasury Internal Revenue Service P Caution: If the issue rice is under $100,000, use Form 8038 -GC. ■:F.raN Reoortina Authority If Amended RAturn shark harp ► (-1 I Issuer's name 2 Issuer's employer Identification number (EIN) The Industrial Development Authority of the City of Riverside, Missouri 42-1729372 38 Name of person (other than Issuer) with whom the IRS may communicate about this return (see instructions) 3b Telephone number of other person shown on 3a Gary A. Anderson, Gilmore & Bell, P.C., Bond Counsel 816-221-1000 4 Number and street (or P.O. box If mall Is not delivered to street address) Room/suite 5 Report number (For IRS Use Only) 2405 Grand Boulevard 1100 3 1 NMI 3 6 City, town, or post office, state, and ZIP code 7 Date of Issue Kansas City, Missouri 64108 11/01/2017 8 Name of issue Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure 9 CUSIP number Project) Series 2017 769166 BK4 10a Name and title of officer or other employee of the issuer whom the IRS may call for more information (see 10b Telephone number of officer or other Instructions) employee shown on 10a Donna Oliver, Finance Director 816-741-3993 of (a) Final maturity date I (b) Issue price ntire issue for which this form is being filed. (c) Stated redemption (d) Weighted price at maturity average maturity (e) Yield 21 I ype OT Issue (enter the Issue price). See the instructions and attach schedule. 20,137,404.35 18,370,000.00 4.336 years 11 Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 12 Health and hospital . . . . . . . . . . . . . . . . . . . . . . . . . . 12 13 Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 20,137,404 35 14 Public safety . . . 24 14 15 Environment (including sewage bonds) . . . . . . . . . . . . . . . . . . . . 15 16 Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 17 Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 18 Other. Describe ► Proceeds used to advance refund prior issues . . . . . . . . . 28 0 18 19 If obligations are TANS or RANs, c . . . . . . . . . . . . heck only box 19a ► ❑ t. 29 If obligations are BANS, check only box 19b . . . . . . . . . . . . . . . ► ❑ 3i, a - 's -"?'3q 20 If obligations are in the form of a lease or installment sale, check box 11P.ED a_�.;, of (a) Final maturity date I (b) Issue price ntire issue for which this form is being filed. (c) Stated redemption (d) Weighted price at maturity average maturity (e) Yield 21 1 05/01/2025 20,137,404.35 18,370,000.00 4.336 years 2.0613 /o Uses of Proceeds of Bond Issue (including underwriters' discount) 22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . . 22 0 00 23 Issue price of entire issue (enter amount from line 21, column (b)) . . . . . 23 20,137,404 35 24 Proceeds used for bond issuance costs (including underwriters' discount) . 24 393,297 06.a' 25 Proceeds used for credit enhancement . . . . . . . . . . . . 25 0 00 26 27 Proceeds allocated to reasonably required reserve or replacement fund 26 0 Proceeds used to currently refund prior issues . . . . . . . . . 27 19,744,107 009 29 28 Proceeds used to advance refund prior issues . . . . . . . . . 28 0 0o :`-N 29 Total (add lines 24 through 28) . . . . . . . . . 29 20,137,404 35 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) 30 0 00 Description of Refunded Bonds. Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . ► 4.2341 years 32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . ► N/A years 33 Enter the last date on which the refunded bonds will be called (MWDD/YYYY) . . . . . . ► 12/01/2017 34 Enter the date(s) the refunded bonds were issued ► (MM/DD/YYYY) 05/09/2007 For Paperwork Reduction Act Notice, see separate Instructions. Cat. No. 637735 Form 8038-G (Rev. 9-2011) Form 8038-G (Rev. 8-2011) Pace 2 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC) (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . b Enter the final maturity date of the GIC 10- c c Enter the name of the GIC provider Do - 37 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units . . . . . . . . . . . . . . . . . . . 38a If this issue is a loan made from the proceeds of another tax-exempt issue, check box ► ❑ and enter the following information: b Enter the date of the master pool obligation ► c Enter the.EIN of the issuer of the master pool obligation Po- d d Enter the name of the issuer of the master pool obligation ► 39 if the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box . . . . ► ❑ 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . . . ► ❑ 41a If the issuer has Identified a hedge, check here ► ❑ and enter the following information: b Name of hedge provider 0- c c Type of hedge Po- d d Term of hedge 0- 42 42 If the issuer has superintegrated the hedge, check box . . . . . . . . . . . . . . . . . . . . . ► ❑ 43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remedjated according to the requirements under the Code and Regulations (see instructions), check box . . . . . . . . ► 44 If the issuer has established written procedures to monitor the requirements of section 148, check box . . . . ► ❑� 45a If some portion of the proceeds was used to reimburse expenditures, check here ► ❑ and enter the amount of reimbursement . . . . . . . . . ► b Enter the date the official Intent was adopted ► Under penalties of perjury, I declare that I have examined this return and accompanying schedules and s(atements, and to the best of my knowledge Signature and belief, the true, co and complete. I further declare that I consent to the IRS's disclosure of the Issuer's return Information, as necessary to and process t to the pe tha a authorized above. Consent ZV / Leland Finley, President Sig ature of Issuer's auth rued repres tative Date Type or print name and title Paid �n�� preparer's name Pre 's slgna Date PT1N Check ❑ H Preparer Ryan Boatright 110/j(/?_j 1 self-employed P01215216 Use Only Firm's name ► Gilmore & Bell, P.C. Firm's EIN ► 43-1611738 Firm's address.► 2405 Grand Boulevard, Suite 1100, Kansas City, MO 64108 1 Phone no. 816-221-1000 Form 8038-G (Rev. 8-2011) ATTACHMENT TO FORM 8038-G The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 PART H: Type of Issue Line 11-18 Users of Bond Proceeds: Form 8038-G Employer Governmental or Line Identification Nongovernmental Number User Name Number Entity Summary of Use 13 City of Riverside, Missouri 44-6005867 Governmental Infrastructure 8038-G Attachment Ex, Shipping Tracking Printing Services Locations Support IMPORTANT! A FedEx Express National Service Disruption is in effect. Learn More " FedEx e'Tracking 407669120661 Ship date Actual delivery, Wed 1110/2018 Thu 1111/2018 9:40 am Kansas City, MO US Delivered OGDEN, UT US Signed for by,, D11Z7A Date/Time Activity . 1/1112018 - Thursday 9`40 am Delivered 8:33. am On FedEx vehicle for delivery 7:41 am At local FedEx facility 6.3'3. am At destination sort facility. 3:33 am Departed FedEx location - 1/10/2018- Wednesday 11:44 pm Arrived of FedEx location 4 06.Fin Picked no 12,32 pm Shipment information sent to FedEx Shipment Facts Tracking Number 407669120661 Weight 0 5 lbs 10,23 kgs Total pieces I Terms Supper Packaging FedEx Envelope Standard 111212018 by 4:30 cm transit About FedEx FadEx Blog Our Portfolio Corporate Responsibility Investor Relations Newsroom Careers Contact Us Location CGUIEN UT OWEN, UT OGMN Ul S4T LAKE c I Y UH �0'"F'+F 111 MEMPHIS, IN -gIIJSASon MO Service FedEx 2Day Delivered To Stripping/Receiving Total shipment weight 0 5:I s / 0:23 kgs Shipper reference firm Special handling Deliver Weekday, No Signature section Required MORE FROM FEDEX FedEx Compatible Developer Resource Center FedEx Cross Border Sign In 'f ,r FedEx 1995-2017 Feedback Site Map I Terms of Use I Security & Privacy GILMOR,E BELL GILMORE & BELL PC 2405 GRAND BOULEVARD, SUITE 1100 KANSAS CITY, MISSOURI 64108-2521 816-221-10001816-221-1018 FAX GILMOREBELL.COM January 10, 2018 FEDERAL EXPRESS Internal Revenue Service Center Ogden, UT 84201 Re: $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri, Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017 Ladies and Gentlemen: In accordance with Internal Revenue Code, Section 149(e), we enclose Form 8038-G, together with Attachment, for filing in connection with the above -referenced issue. If you have any questions, please let us know. Thank you. Enclosures Sincerely, Jennifer DeMoss Legal Assistant ief: firm Date- 10Jani8 Dep: W9t: 1.00 LBS DV 0.00 Svcs: ** WAY ** NSR TRCK: 4076 6912 0661 SHIPPING: SPECIAL: HANDLING: TOTAL: 13 16 0.76 0 00 13.92 EXHIBIT C DESCRIPTION OF PROPERTY COMPRISING THE FINANCED FACILITY AND FINAL WRITTEN ALLOCATION OF ORIGINAL OBLIGATIONS EXHIBIT C TO FEDERAL TAX CERTIFICATE Description of Property Comprising the Financed Facility _ _Series 200 H{Nero Money Prej-0 .. _ . Original Average, Reasonably Expected Economic Life 25.00 years 120°/ of Original Economic Life 120% 30 00 years Issue Date of 2007AB Bonds 5/9/2007 2007AD Bond Proceeds Allocated to Project Costs 40,019,034 Estimated Elapsed Estimated 4.27 Equity Contribution Allocated to Project Costs Economic 5.61 Original Placed in Time Remaining 44,404,341 100.00 Life a 19.52 Economic Service from Economic Asset Total Financed Asset Description Life Date Issue Date Lire Type Cost Cost Ho=m Parkway 25 5/9/2007 000 25.00 Other 21,000,000 525,000,000 9 Fhghway Improvements 25 5/9/2007 0.00 25.00 Other 7,500,000 187,500,000 East/West Connection 25 5/9/2007 0.00 2500 Other 5,000,000 125,000,000 Utilities 25 5/9/2007 000 2500 Other 5,000,000 125,000,000 Environmental Remediation 25 5/9/2007 0.00 2500 Other 500,000 12,500,000 Design, Engineering & Legal Fees' Other 5,000,000 - Contingency* Other 404,341 - 44,404,341 975,000,000 Less land costs Design, Engineering & Legal Fees, Contingency (5,404,341) Net casts, excluding land 39,000,000 Original Average, Reasonably Expected Economic Life 25.00 years 120°/ of Original Economic Life 120% 30 00 years Issue Date of 2007AB Bonds 5/9/2007 2007AD Bond Proceeds Allocated to Project Costs 40,019,034 90.12 Interest Earnings Allocated to Project Costs 1,894,267.08 4.27 Equity Contribution Allocated to Project Costs 2,491,040 5.61 Other Funds - 0.00 Total Project Costs 44,404,341 100.00 � _sem zonBmra4 (Refund sales 20_o7.isaoadsJ .._' RefundSeres 2007AB Bonds Series 2007AB Bonds Determination ofAveratte, Reasonably Economic Life of Financed Facilibes Use of Series Series 120% of 2007AD 2007AB Average Proceeds Proceeds Idfe (yrs) x Life Series 2007AB (New Money Project) 40,019,034 30.00 1,200,571,007 Total Net Uses: 40,019,034 19.52 1,200,571,007 120% of Expected Economic Life of Facilities Fmunced: 30.00 years Issue Date of 2007AB Bonds 5/9/2007 Issue Date of 2017 Bonds 11/1/2017 Less Years elapsed (1048) Remaining permitted weighted average bond mmmity 1952 years Series 2017 Bonds Determination of Averam. Reasonably Expected Economic Life of Financed Facilities Use of Series Series 120% of 2017 2017 Average Proceeds Proceeds Life (yrs) x Life Senes 2007AB (New Money Project) 19,744,107 19.52 385,404,974 Total Net Uses 19,744,107 385,404,974 120% of Expected Economic Life of Facilities Financed: 1952 years Gilmore & Bell, P.0 Gl Nmwentbu 1, 2017 1*14111:3081 SAMPLE ANNUAL COMPLIANCE CHECKLIST Name of tax-exempt bonds ("Bonds") $18,370,000 financing Project: The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 Issue Date of Bonds: November 1, 2017 Name of Bond Compliance Officer: Period covered by request ("Annual Item I Question I Response 1 Financing Payments — Private Security or Payments During the entire Annual Period, were only the Tax Revenues pledged by the City to make Financing Payments under the Financing Agreement used to pay Financing Payments? For this purpose, "Tax Revenues" means all incremental tax revenues levied for the purpose of project costs related to the Tax Increment Financing Project including (1) payments in lieu of taxes ("PILOTS"), (2) economic activity taxes and (3) new state revenues. ❑ Yes ❑ No If answer above was "No," was an Opinion of Bond Counsel ❑ Yes obtained prior to making a Financing Payment with another ❑ No source of funds? If Yes, include a copy of the Opinion in the Tax -Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax -Exempt Bond File. 2 Have any taxpayers entered into an impermissible agreement ❑ Yes Impermissible relating to the payment of Tax Revenues? ❑ No Agreements Examples of impermissible agreements include: • An agreement for a taxpayer to be personally liable for a tax that does not impose personal liability • An agreement to provide additional credit support such as a guaranty • An agreement as to the minimum market value of property subject to a property tax • Any similar agreement that causes a tax to fail to have a generally applicable manner of determination or collection D-1 Item Question Response 4 If answer above was "Yes," was an Opinion of Bond Counsel ❑ Yes Leases & obtained prior to entering into the agreement? ❑ No Other Rights If Yes, include a copy of the Opinion in the Tax -Exempt Bond to Possession File. ❑ Yes If No, contact Bond Counsel and include description of ❑ No resolution in the Tax -Exempt Bond File. Item Question Response 3 Was the entire Project Facility owned by the Issuer during the ❑ Yes Ownership entire Annual Period? ❑ No If answer above was "No," was advice of Bond Counsel ❑ Yes obtained prior to the transfer? ❑ No If Yes, include a description of the advice in the Tax -Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax -Exempt Bond File. Item Question Response 4 During the Annual Period, was any part of the Project Facility ❑ Yes Leases & leased at any time pursuant to a lease or similar agreement for ❑ No Other Rights more than 50 days? to Possession If answer above was "Yes," was advice of Bond Counsel ❑ Yes obtained prior to entering into the lease or other arrangement? ❑ No If Yes, include a description of the advice in the Tax -Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax -Exempt Bond File. Item Question Response 5 During the Annual Period, has the management of all or any ❑ Yes Management part of the operations of the Financed Asset (e.g., cafeteria, gift ❑ No or Service shop, etc.) been assumed by or transferred to another entity? Agreements If answer above was "Yes," was advice of Bond Counsel ❑ Yes obtained prior to entering into the management agreement? ❑ No If Yes, include a description of the advice in the Tax -Exempt Bond File. If No, contact Bond Counsel and include description of resolution in the Tax -Exempt Bond File. D-2 Item Question Response 6 Was any other agreement entered into with an individual or ❑ Yes Other Use entity that grants special legal rights to the Financed Asset? ❑ No Filings If answer above was "Yes," was advice of Bond Counsel ❑ Yes obtained prior to entering into the agreement? ❑ No 8 If Yes, include a description of the advice in the Tax -Exempt ❑ Yes Continuing Bond File. ❑ No Disclosure If No, contact Bond Counsel and include description of Filings resolution in the Tax -Exempt Bond File. 7 Have all rebate and yield reduction calculations mandated in ❑ Yes Arbitrage & the Tax Compliance Agreement been prepared for the current ❑ No Rebate year and included in the Tax -Exempt Bond File? Filings If No, contact Rebate Analyst and incorporate report or include description of resolution in the Tax -Exempt Bond File. 8 Did the Authority file its annual report (including audited ❑ Yes Continuing financial statements and any other financial information and ❑ No Disclosure operating data required for the Bonds) with the MSRB on Filings EMMA? If No, file the appropriate failure to file notice required for the Bonds with the MSRB on EMMA. In addition, contact Bond Counsel and file the deficient material with the MSRB on EMMA and include a description of the reason for the delay in the Tax -Exempt Bond File. 9 Did any of the following events occur with respect to the ❑ Yes Material Bonds? ❑ No Event Filings • principal and interest payment delinquencies; • non-payment related defaults, if material; • unscheduled draws on debt service reserves reflecting financial difficulties; • unscheduled draws on credit enhancements reflecting financial difficulties; • substitution of credit or liquidity providers, or their failure to perform; • adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; • modifications to rights of bondholders, if material; • bond calls, if material, and tender offers; • defeasances; • release, substitution or sale of property securing renavment of the Bonds. if material: D-3 Bond Compliance Officer: Date Completed: 0, • rating changes; • bankruptcy, insolvency, receivership or similar event of the obligated person; • the consummation of a merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and • appointment of a successor or additional trustee or the change of name of the trustee, if material. If "Yes," was Bond Counsel contacted and notice of the ❑ Yes material event filed with the MSRB on EMMA? ❑ No If No, contact Bond Counsel immediately and prepare and file any required notice with the MRSB on EMMA. Bond Compliance Officer: Date Completed: 0, PRELIMINARY OFFICIAL STATEMENTDATED OCTOBER, 2017 New Issue Standard & Poor's :Rating; "A" (Book Entry Only) See "RATING" herein. In the opinion of Gilmore & Bell, P.C., Bond Counsel, under existing law and assuming continued compliance with certain requirements Of the Internal Revenue Code of 1986, as amended (the "Code'), (l) the interest on the Series 2017 Bonds (`including any original issue discount properly allocable to an owner thereof) is excludable fixim gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, (2) the interest on the Series 2017 Bonds is exempt from Missouri income taxation by the State of Missouri and (3) the Series 2017 Bonds have not been designated as "qualified tax-exempt obligations ivithin the meaning of Section 265(b)(3) of the Code. ,See "TAX MA ITERS" in this Official Statement. THE INDUSTRIAL DEVELOPMENT i' OF OF '' !MISSOURI $18,970,000* (RiversideIndustrial Development Revenue Refunding Bonds Horizons Infrastructure Project) Series 2017 The Series 2017 Bonds are issuable only as fully registered bonds,coupons, • ill or Indentureintegral multiple thereof. Principal of and semiannual interest on the Series 2017 Bonds will be paid from moneys available therefor under the (hereina Bank,Missouri,Paying Agent. So long as DTC or nominee,Bondowner,• • DTC is expected, in turn, to remit such principal and interest to the DTC .defined)for • to the Beneficial Owners (herein defined), Principal of the Series 2017 Bonds will be payable on each May I in the years shown on the inside cover. Interest on the Series 2017 Bonds on . • November 1, beginning Payment of the principal of and interest on the Series 2017 Bonds is Aqj secured by any mortgage on the Project or any # or property # described herein. The Series 2017Bonds are secured as described The Series 2017 Bonds #t subject to optional or mandatory # t described 2017 BONDS Redemption" The Series 2017 Bonds • and of -am wvew y. . - :. � •. • .:. • ♦ . i iii. # # # ! . . :. ' ! 1 II FEWLLRAN I CTINA411 lluhhll' 7 • i,.: # # # # { a purchase of the Series 2017 Bonds. 7he Series 2017 Bonds are offered when, as and ff issued by the A uthority and accepted by the Underwriter subject to prior City, Missouri', Bond Counsel, as described# # passed upon Gilmore &Bell, P.C, Kansas City, Missouri. Certain legal matters will be passed upon for the Underwriter by its counsel, Lewis Rice LLC Certain matters . •, special counseL Certain legal passed on for the Authority by iis counsel, Spencer Fane LLP. It is expected that the Series 2017 Bonds available throughNovember—, 2017 STIFEL *Preliminary, subject to change. THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI $18,970,000* The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 Maturity Schedule* Serial Bonds Maturity Principal Interest Mav 1 Amount Rate Price Yield 2018 $2,000,000 2019 2,170,000 2020 2,230,000 2021 2,320,000 2022 2,415,000 2023 2,510,000 2024 2,610,000 2025 2,715,000 CUSIP") (t)CUSIP numbers have been assigned to this issue by S&P Global Rating, a division of S&P Global, Inc., and are included solely for the convenience of the Owners of the Series 2017 Bonds. Neither the Authority, the City nor the Underwriter shall be responsible for the selection or correctness of the CUSIP numbers set forth above. *Preliminary; subject to change. *Preliminary; subject to change. CITY OF RIVERSIDE, MISSOURI 2950 NW Vivion Road Riverside, Missouri 64150 lu ENVII 7 Kathleen Rose BOARD OF ALDERMEN Al Bowman Ron Super Aaron Thatcher Chet Pruett Salvatore LoPorto Art Homer ADMINISTRATION Greg Mills, City Administrator Robin Kincaid, City Clerk Donna Oliver, Finance Officer TRUSTEE UMB Bank, N.A. Kansas City, Missouri BOND COUNSEL TO THE CITY Gilmore & Bell, P.C. Kansas City, Missouri FINANCIAL ADVISOR Columbia Capital Management, LLC Overland Park, Kansas UNDERWRITER Stifel, Nicolaus & Company, Incorporated St. Louis, Missouri REGARDING USE OF THIS OFFICIAL STATEMENT No dealer, broker, salesman or other person has been authorized by the Authority, the City or the Underwriter to give any information or to make any representations, other than those contained in this Oficial Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as a representation of fact. The information set forth herein has been obtained from the Authority, the City and other sources believed to be reliable, but is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Authority or the Underwriter. The information and expressions of opinion contained herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the affairs of the Authority, the City since the date hereof. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter do not guarantee the accuracy or completeness of that information. IN CONNECTION WITH THE OFFERING OF THE SERIES 2017 BONDS, THE UNDERWRITER MAY OVER ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2017 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. The Series 2017 Bonds have not been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or under any state securities or G°blue sky" laws. The Series 2017 Bonds are offered pursuant to an exemption from registration with the Securities and Exchange Commission. In making an investment decision, investors must rely on their own examination of the terms of this offering, including the merits and risks involved. These securities have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this document. Any representation to the contrary may be a criminal offense. CAUTIONARY STATEMENTS REGARDING FORWARD- LOOKING STATEMENTS IN THIS OFFICIAL STATEMENT Certain statements included or incorporated by reference in this Official Statement constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as "plan," "expect," "estimate," "anticipate," "projected," "budget" or other similar words. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. NEITHER THE AUTHORITY, THE CITY NOR ANY OTHER PARTY PLANS TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN THEIR EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES UPON WHICH SUCH STATEMENTS ARE BASED OCCUR. TABLE OF CONTENTS INTRODUCTORY STATEMENT .........................1 Purpose of the Official Statement ............................... l TheAuthority .............................................................. l TheCity ......................................................................1 The Plan of Financing ................................................. l The Series 2017 Bonds...............................................2 Security for the Series 2017 Bonds .............................3 Bondowners' Risks.....................................................4 Continuing Disclosure................................................4 Definitions and Summaries of Legal Documents .......4 THE AUTHORITY..................................................4 Organization and Powers............................................4 Membership................................................................5 Indebtedness of the Authority .....................................5 THECITY.................................................................6 PLAN OF FINANCING .......................................... 6 General........................................................................ 6 TheProject..................................................................6 Tax Increment Financing............................................7 The Redevelopment Plan ..........................................10 Development East of Horizons Parkway ..................14 Development West of Horizons Parkway.................15 Additional TIF Project Financings ............................15 Sources and Uses of Funds.......................................16 THE SERIES 2017 BONDS...................................16 General Terms...........................................................16 Book -Entry Only System..........................................17 Redemption...............................................................19 Registration, Transfer and Exchange ........................ 19 CUSIP Numbers.......................................................19 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS............................................19 General......................................................................19 Special, Limited Obligations....................................20 The Financing Agreement........................................20 Debt Service Reserve Fund.......................................22 The Indenture............................................................23 Additional Bonds......................................................23 CITY FINANCIAL SUMMARY ...........................24 (iv) BONDOWNER'S RISKS ...................................... 25 General..................................................................... 25 Risk Factors Relating to the City's Obligations to Make Financing Payments .................................. 25 Risk Factors Relating to the Collection of Incremental Tax Revenues .................................. 26 Tax Increment Financing Litigation ......................... 28 BondRating.............................................................. 29 Enforcement of Remedies ........................................ 29 Amendment of Indenture .......................................... 29 LITIGATION......................................................... 29 TheAuthority ........................................................... 29 TheCity .................................................................... 29 LEGAL MATTERS ............................................... 30 TAX MATTERS ..................................................... 30 Opinion of Bond Counsel .......................................... 30 Other Tax Consequences ........................................... 31 RATING.................................................................. 32 FINANCIAL STATEMENTS ............................... 32 CONTINUING DISCLOSURE ............................. 32 UNDERWRITING ................................................. 33 CERTAIN RELATIONSHIPS .............................. 33 MISCELLANEOUS ............................................... 33 APPENDIX A: Information Concerning the City of Riverside, Missouri APPENDIX B: Accountants' Report and Audited Financial Statements of the City of Riverside, Missouri for Fiscal Year Ended June 30, 2016 APPENDIX C: Definitions of Words and Terms and Summaries of Certain Legal Documents APPENDIX D: Form of Opinion of Bond Counsel OFFICIAL STATEMENT THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI $18,970,000* The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 INTRODUCTORY STATEMENT The following introductory statement is subject in all respects to more complete information contained elsewhere in this Official Statement. The order and placement of materials in this Official Statement, including the Appendices, are not to be deemed to be a determination of relevance, materiality or relative importance, and this Official Statement, including the Cover Page and Appendices, must be considered in its entirety. All capitalized terms used in this Official Statement that are not otherwise defined herein shall have the meanings ascribed to them in Appendix C hereto. Purpose of the Official Statement This Official Statement, including the cover page and the Appendices, sets forth certain information in connection with (i) the issuance and sale by The Industrial Development Authority of the City of Riverside, Missouri, a public corporation duly organized and validly existing under the laws of the State of Missouri (the "Authority"), of the above-described series of bonds (the "Series 2017 Bonds"), (ii) the Authority, (iii) the City of Riverside, Missouri (the "City"), and (iv) the refinancing of certain improvements in connection with the tax increment financing project more fully described herein. The Authority The Authority is a public corporation created and existing under and by virtue of the Industrial Development Corporation Act, Chapter 349 of the Revised Statutes of Missouri, as amended (the "Act"). For further information concerning the Authority, see "THE AUTHORITY" herein. The City The City is a suburban community located in the extreme southeast corner of Platte County, Missouri, approximately 7 miles north of downtown Kansas City, Missouri on the banks of the Missouri River. The City was incorporated in 1951 and is governed by a Mayor — Board of Aldermen — City Administrator form of government. See Appendix A hereto for further information concerning the City. The Plan of Financing The proceeds of the Bonds are being made available to the City pursuant to a Financing Agreement (defined below) to refund two series of bonds previously issued by the Authority (as described herein, the "Refunded Bonds") to finance a portion of the costs of the Project, as defined herein (the "Project"). The Refunded Bonds consist of the Authority's (i) Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project - City of Riverside, Missouri), Series 2007A, issued in the original principal amount of $30,265,000, and (ii) Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project - City of Riverside, Missouri), Series 2007B, issued in the original principal amount of $10,000,000. The Refunded Bonds will be redeemed on December 1, 2017*. *Preliminary; subject to change. The Refunded Bonds were issued to fund certain infrastructure costs including major road and utility access improvements (the "Project") related to the redevelopment area approved by the City pursuant to the L- 385 Levee Redevelopment Plan, as amended, (the "Redevelopment Plan") all within an approximately 1,800 acre area in the City on the north bank of the Missouri River designated as the TIF district in the Redevelopment Plan (the "Redevelopment Area"). The Redevelopment Plan was adopted by the City under the provisions of the Real Property Tax Increment Allocation Redevelopment, Act, Sections 99.800 et seq. of the Revised Statutes of Missouri, as amended (the "TIF Act"). The infrastructure improvements financed by the Refunded Bonds represented the third phase of major infrastructure improvements within the Redevelopment Area. The first phase, provided flood protection with the improvements to the Riverside- Quindaro Bend Levee. Funded by the Army Corp of Engineers, the Riverside-Quindaro Bend Levee District of Platte County, Missouri (the "Levee Project) of Platte County, Missouri (the "Levee District") and the City, the Levee Project provided 500 -year flood protection for approximately 1,300 acres of property. The second phase of major infrastructure improvements was construction of a new diamond interchange at the intersection of Horizons Parkway and Interstate 635, completed in 2008. See "PLAN OF FINANCING — The Project" herein. The Authority and the Levee District have issued other series of bonds for projects in the Redevelopment Area as follows: (i) The Authority's Tax Increment Refunding Revenue Bonds (L-385 Levee Project), Series 2011A, issued in the original principal amount of $2,385,000 (the "Series 2011 A Bonds") outstanding in the principal amount of $645,000, which were issued by the Authority to refund three prior series of bonds issued by the City to finance costs of certain projects in the Redevelopment Area; (ii) The Authority's Tax Increment Refunding Revenue Bonds (L-385 Levee Project), Series 2014, issued in the original principal amount of $7,640,000 (the "Series 2014 Bonds") outstanding in the principal amount of $4,010,000, which were issued by the Authority to refund a prior series of bonds issued by the City to finance costs of certain projects in the Redevelopment Area; and (iii) The Levee District's Levee District Improvement Refunding Bonds (L-385 Project), Series 2017, issued in the original aggregate principal amount of $12,620,000 (the "Series 2017 Levee District Bonds") currently outstanding in the principal amount of $12,620,000. The Series 2011A Bonds are secured on a parity with the Series 2014 Bonds with respect to the Incremental Tax Revenues (defined herein) generated in the Redevelopment Area and are also secured by an annual appropriation obligation of the City. The lien of the Series 2011 A Bonds and the Series 2014 Bonds on Incremental Tax Revenues is senior to that of the Series 2017 Levee District Bonds and the Series 2017 Bonds and any bonds issued on a parity with such bonds. The Series 2017 Levee District Bonds are partially secured by a subordinate lien on the Incremental Tax Revenues generated in the Redevelopment Area that is senior to the lien on such revenues securing the Series 2017 Bonds, together with tax assessments on certain property in the Levee District. See "ADDITIONAL TIF PROJECT FINANCINGS" herein for limitations on additional parity debt. The Series 2017 Bonds The Series 2017 Bonds are being issued pursuant to the Act and a Bond Trust Indenture dated as of November 1, 2017 (said Bond Trust Indenture, together with all amendments and supplements thereto, being referred to herein as the "Indenture"), between the Authority and UMB Bank, N.A., Kansas City, Missouri (the "Trustee"), for the purpose of providing funds to the City, pursuant to a Financing Agreement dated as of November 1, 2017 (said Financing Agreement, together with all amendments and supplements thereto, being -2- referred to herein as the "Financing Agreement"), between the Authority and the City, to be used to provide funds to, together with other available funds, (i) refund the Refunded Bonds, (ii) fund a debt service reserve fund for the Series 2017 Bonds, and (iii) pay the costs of issuing the Series 2017 Bonds, in consideration of payments by the City, which will be sufficient to pay the principal of, redemption premium, if any, and the interest on the Series 2017 Bonds, all as more fully described in the Financing Agreement and the Indenture. A description of the Series 2017 Bonds is contained in this Official Statement under "THE SERIES 2017 BONDS." All references to the Series 2017 Bonds are qualified in their entirety by the definitive forms thereof and the provisions with respect thereto included in the Indenture and the Financing Agreement. The Indenture provides for the future issuance of additional bonds ("Additional Bonds") for the sole purpose of refunding the Series 2017 Bonds which, if issued, would rank on a parity with the Series 2017 Bonds and any other bonds then outstanding under the Indenture. See "SUMMARY OF THE INDENTURE" in Appendix C hereto. The Series 2017 Bonds and any future Additional Bonds issued under the Indenture are referred to collectively as the "Bonds." Security for the Series 2017 Bonds The Series 2017 Bonds and the interest thereon are special, limited obligations of the Authority, payable by the Authority solely from (1) Financing Payments to be made by the City under the Financing Agreement, (2) a Debt Service Reserve Fund established for the Series 2017 Bonds, and (3) certain funds held by the Trustee under the Indenture, and not from any other fund or source of the Authority. Pursuant to the Financing Agreement, the City has pledged (i) a subordinate lien on available Incremental Tax Revenues (defined as Payments in Lieu of Taxes (or PILOTS) and Economic Activity Taxes (or EATs), both described herein) and (ii) subject to annual appropriation, legally available revenues of the City. Payments under the Financing Agreement are designed to be sufficient, together with other funds available for such purpose, to pay when due the principal of, premium, if any, and interest on the Series 2017 Bonds. Except as noted herein, all payments by the City under the Financing Agreement are subject to annual appropriation. Pursuant to the Indenture, the Authority will assign to the Trustee, for the benefit and security of the registered Owners of the Series 2017 Bonds, substantially all of the rights of the Authority in the Financing Agreement, including all Financing Payments and Additional Payments payable thereunder. As described above under "The Plan of Financing," the Series 2011A Bonds are secured on a parity with the Series 2014 Bonds with respect to the Incremental Tax Revenues generated in the Redevelopment Area and are also secured by an annual appropriation obligation of the City. The lien of the Series 2011A Bonds and the Series 2014 Bonds on Incremental Tax Revenues is senior to that of the Series 2017 Levee District Bonds and the Series 2017 Bonds and any bonds issued on a parity with such bonds. The Series 2017 Levee District Bonds are partially secured by a subordinate lien on the Incremental Tax Revenues generated in the Redevelopment Area that is senior to the lien on such revenues securing the Series 2017 Bonds, together with tax assessments on certain property in the Levee District. The Series 2017 Bonds shall not constitute a debt or liability of the State or of any political subdivision thereof within the meaning of any State constitutional provision or statutory limitation and shall not constitute a pledge of the faith and credit of the State or of any political subdivision thereof. The issuance of the Series 2017 Bonds shall not directly or indirectly obligate the Authority, its officers, directors or employees, the City, the State or any political subdivision thereof to provide any funds for their payment. The issuance of the Series 2017 Bonds shall not, directly, indirectly, or contingently, obligate the City, State or any political subdivision thereof to levy any form of taxation therefor or to make any appropriation for their payment. The Authority has no taxing power. As the City has sold property within the Redevelopment Area to private parties and private parties have completed private projects, the portion of the property within the Levee District owned by the Authority and the City has been reduced and the value of taxable property within the Redevelopment Area has increased. -3- However, the City makes no representation regarding its expectations for future sales of property, and the rate at which additional property will be subject to taxation in the Redevelopment Area. The lien of the Series 2017 Bonds on the Incremental Tax Revenues is subordinate to the lien of the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds (together with any bonds issued on a parity with such bonds) on such revenues. While the City currently projects that there will be sufficient Incremental Tax Revenues to provide for the Financing Payments on the Series 2017 Bonds as well as required payments on the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein, there can be no assurance that such projections will be realized. As a consequence, prospective investors should evaluate the likelihood that the City will continue to appropriate moneys sufficient to make the Financing Payments under the Financing Agreement if Incremental Revenues are not sufficient to make the Financing Payments on the Series 2017 Bonds as well as required payments on the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS," "PLAN OF FINANCING — The Redevelopment Plan" and "BONDOWNERS RISKS" herein. Bondowners' Risks An investment in the Series 2017 Bonds involves elements of risk. For a description of certain risks associated with the Series 2017 Bonds, see "BONDOWNERS' RISKS" herein. Continuing Disclosure The City will enter into a Continuing Disclosure Agreement with the Trustee, as dissemination agent, for the benefit of the Owners of the Series 2017 Bonds to provide certain annual financial information and notices of the occurrence of certain enumerated events. A summary of the Continuing Disclosure Agreement is attached to this Official Statement in Appendix C. Definitions and Summaries of Legal Documents Definitions of certain words and terms used in this Official Statement are set forth in Appendix C of this Official Statement. Summaries of the Indenture, the Financing Agreement, the Authorizing Resolution and the Continuing Disclosure Agreement are included in this Official Statement in Appendix C hereto. Such definitions and summaries do not purport to be comprehensive or definitive. All references herein to the specified documents are qualified in their entirety by reference to the definitive forms of such documents, copies of which may be viewed at the principal corporate trust office of the Trustee, UMB Bank, N.A., Corporate Trust Department, 1010 Grand Boulevard, Kansas City, Missouri 64106. Copies of such documents and the other documents described herein will be available at the offices of the Underwriter, Stifel, Nicolaus & Company, Incorporated, 501 N. Broadway, St. Louis, Missouri, 63102, during the period of the offering and, thereafter, at the principal corporate trust office of the Trustee. THE AUTHORITY Organization and Powers The Authority is a public corporation, duly organized and existing under the laws of the State of Missouri, including particularly the Act. The Authority is authorized under the Act, among other things, to (i) finance all or any part of the costs of certain projects (as defined in the Act); (ii) issue its revenue bonds to finance and refinance such projects and refund prior bond issues; and (iii) pledge the income and revenues to be received with respect to such projects sufficient for the payment of such bonds and the interest thereon. 10 The Authority may issue its bonds, notes or other obligations for any of its corporate purposes. Neither the directors of the Authority nor any person executing the Series 2017 Bonds will be personally liable on the Series 2017 Bonds by reason of the issuance thereof. The Series 2017 Bonds and the interest thereon shall be special, limited obligations of the Authority payable solely from certain revenues pledged under the Financing Agreement, subject, in certain cases to annual appropriation by the Board of Aldermen of the City, and not from any other fund or source of the Authority, and are secured by a transfer, pledge and assignment of and a grant of a security interest in the Trust Estate to the Trustee and in favor of the Registered Owners of the Series 2017 Bonds, as provided in the Indenture. The Series 2017 Bonds and the interest thereon do not constitute a debt of the Authority, the City, the State or any political subdivision thereof, and do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. The Authority has no taxing power. Membership The Authority has a Board of Directors in which all of the powers of the Authority are vested, which consists of 5 directors, all of which are duly qualified electors of and taxpayers in Riverside, Missouri. The address of the Authority is 2950 NW Vivion Road, Riverside, Missouri 64150. The phone number of the Authority is (816) 741-3993. The current members and officers of the Board of Directors of the Authority are as follows: Name Leland Finley Frank Biondo Harold Snoderley Jason Rule Art Homer Indebtedness of the Authority Title President and Director Vice President and Director Secretary and Director Treasurer and Director Director The Authority is authorized to issue and may issue other series of bonds and notes secured by instruments separate and apart from the Indenture. The owners of such bonds and notes will have no claim on the assets, funds or revenues of the Authority securing the Series 2017 Bonds. The holders of the Series 2017 Bonds will have no claim on the assets, funds or revenues of the Authority securing such other bonds and notes. Other than with respect to the issuance of Additional Bonds as described herein, with respect to additional indebtedness of the Authority, the Authority intends to enter into separate agreements for the purpose of providing financing for eligible projects. Issues which may be sold by the Authority in the future will be created under separate and distinct indentures or resolutions and secured by instruments, properties and revenues separate from those securing the Series 2017 Bonds. EXCEPT FOR INFORMATION CONCERNING THE AUTHORITY IN THIS SECTION NONE OF THE INFORMATION IN THIS OFFICIAL STATEMENT HAS BEEN SUPPLIED OR VERIFIED BY THE AUTHORITY, AND THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. -5- THE CITY The City is a fourth class city organized and existing under the Constitution and laws of the State of Missouri. Certain information describing the City is attached hereto in Appendix A. PLAN OF FINANCING General The Series 2017 Bonds are being issued to, together with certain other available moneys, current refund $19,665,000 aggregate principal amount of the Refunded Bonds, to establish a Debt Service Reserve Fund for the Series 2017 Bonds, and pay costs of issuance of the Series 2017 Bonds. All of the outstanding Refunded Bonds, comprised of two prior series of bonds, will be refunded. To effect the refunding of the Refunded Bonds a portion of the proceeds of the Series 2017 Bonds together with other moneys from the funds and accounts of the Refunded Bonds will be deposited in an Escrow Fund created under an Escrow Letter of Instructions among the Authority, the City and UMB Bank, N.A., as Escrow Agent. The moneys deposited in the Escrow Fund will be sufficient, without consideration of investment, to provide for the payment and redemption of the Refunded Bonds on their date of redemption. The Escrow Agent will transfer sufficient moneys for the payment and redemption of the Refunded Bonds on the redemption date thereof to UMB Bank, N.A., as paying agent for the Refunded Bonds. The Project The Project consists of various infrastructure improvements related to the TIF Project, which improvements represent the third phase of major infrastructure improvements within the Redevelopment Area established under the L-385 Levee Redevelopment Plan of the City, including, but not limited to, the acquisition of rights-of-way, construction, extension and improvement of new or existing streets and highways and sanitary and storm sewer systems, provision for wetlands remediation, and professional fees. Such improvements have been substantially completed. The TIF Project consists of various improvements related to a tax increment financing project located in the City. In connection with the TIF Project, the City adopted a tax increment financing plan pursuant to the TIF Act, pursuant to which it has pledged the Incremental Tax Revenues to secure its obligation to make the financing payments pursuant to certain Financing Agreements. The Incremental Tax Revenues consist of certain Payments in Lieu of Taxes, or PILOTS, to be made with respect to the property in the Redevelopment Area and Economic Activity Tax Revenues derived from the Redevelopment Area, all as described herein under the caption "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS." The portion of the Incremental Tax Revenues consisting of Economic Activity Tax Revenues is subject to annual appropriation by the City. Additionally, the TIF Project has been approved by the State to receive the benefit of 50% of the increase in state income tax from net new jobs in the Redevelopment Area up to certain maximum amounts (the "State Income Tax Revenues"), which funds are subject to annual appropriation by the Missouri General Assembly. Any such funds received by the City from the State are included within the definition of Economic Activity Tax Revenues for the purposes of this Official Statement. To date, both the City and the State have appropriated applicable Incremental Tax Revenues each year and PILOTS have been deposited in the Special Allocation Fund associated with the TIF in conformance with Missouri law. Tax Increment Financing for the Project terminates in the year 2025 pursuant to Missouri law. The pledge of the Incremental Tax Revenues to the repayment of the Series 2017 Bonds is subordinate to the pledge of such revenues securing the Series 2017 Levee District Bonds, Series 2011A Bonds, the Series 2014 Bonds, and any additional bonds issued under the trust indentures related to such bonds. Eel Tax Increment Financing Overview. Tax increment financing is a procedure whereby cities and counties encourage the redevelopment of designated areas. The theory of tax increment financing is that, by encouraging redevelopment projects, the value of real property in a redevelopment area should increase. When tax increment financing is adopted for a redevelopment area, the assessed value of real property in the redevelopment area is frozen for tax purposes at the current base level prior to the construction of improvements. The owners of the property continue to pay property taxes at the base level. As the property is improved, the assessed value of real property in the redevelopment area should increase above the base level. By applying the tax rate of all taxing districts having taxing power within the redevelopment area to the increase in assessed valuation of the improved property over the base level, a "tax increment" is produced. The owners of property pay the tax increments, referred to as "payments in lieu of taxes" or "PILOTS," in the same manner as regular property taxes. The payments in lieu of taxes are transferred by the collecting agency to the treasurer of the city or county and deposited in a "special allocation fund." All or a portion of the moneys in the fund are used to pay directly for redevelopment project costs or to retire bonds or other obligations issued to pay such costs. The TIFAct. The TIF Act was enacted in 1982 and has been amended several times subsequent to its enactment. The constitutional validity of the TIF Act (prior to the amendments) was upheld by the Missouri Supreme Court in Tax Increment Financing Commission of Kansas City, Missouri v. J.E. Dunn Construction Co., Inc., 781 S.W.2d 70 (Mo. 1989) (en banc). The TIF Act authorizes cities and counties to provide long- term financing for redevelopment projects in "blighted" and "conservation" areas (as defined in the TIF Act) through the issuance of bonds and other obligations. Prior to the amendments to the TIF Act, such obligations were payable solely from payments in lieu of taxes within a designated redevelopment project area. Under the amendments to the TIF Act, such obligations are also payable from economic activity taxes from the designated redevelopment project area, subject to annual appropriation. Economic activity taxes include earnings, franchise, sales and utilities taxes but exclude personal property taxes, hotel/motel taxes, licenses, fees and special assessments. The validity of certain portions of amendments to the TIF Act relating to the capture of economic activity revenues was upheld by the Missouri Supreme Court in County of Jefferson v. QuikTrip Corporation, 912 S.W.2d 487 (Mo. 1995). Although Payments in Lieu of Taxes may be irrevocably pledged to the repayment of the Bonds, Economic Activity Taxes are subject to annual appropriation by the governing body of the City, and there is no obligation on the part of the governing body to appropriate Economic Activity Taxes in any year beyond the current fiscal year. In addition, certain projects may receive the benefit of the State Income Tax Revenues, which funds are subject to annual appropriation by the Missouri General Assembly. The State has approved the City's application for the use of such revenues. Originally, the City received 50% of the general fund portion of State sales tax revenues generated within the Redevelopment Area. However, this was changed to State Income Tax Revenues in December 2011. The transfer by the State of the State Income Tax Revenues is subject to annual appropriation each year by the General Assembly for the projects approved that year. The Missouri Department of Economic Development (the "DED") currently intends to seek a single, aggregate appropriation for all projects approved that year, unless an applicant requests a specific appropriation for its project. The state appropriation is limited to the amount approved by DED on an annual basis. While it is anticipated that this commitment will be for the term recommended by DED, the General Assembly is not legally bound to either approve the appropriation or continue the appropriation in future years. Amendments to the TIF Act have been proposed in each legislative session during recent years. In connection with proposed amendments to the TIF Act that may be introduced in future legislative sessions, it is not possible to predict the nature of such proposed amendments or whether such proposed amendments to the TIF Act will become law during future sessions of the General Assembly. For a discussion of the effect of potential litigation involving the TIF Act, see the caption "BONDOWNERS' RISKS — Tax Increment Financing Litigation" in this Official Statement. -7- Assessments and Collections of Ad Valorem Taxes. The City and the Redevelopment Area are located within Platte County, Missouri (the "County"). On or before October 1 in each year, each political subdivision located within the County which imposes ad valorem taxes (the "Taxing Districts") estimates the amount of taxes that will be required during the next succeeding fiscal year to pay interest falling due on general obligation bonds issued and the principal of bonds maturing in such year and the costs of operation and maintenance plus such amounts as shall be required to cover emergencies and anticipated tax delinquencies. The Taxing Districts certify the amount of such taxes to be levied, assessed and collected on all taxable tangible property in the County to the County Assessor by September 1. All taxes levied must be based upon the assessed valuation of land and other taxable tangible property in the County as shall be determined by the records of the County Assessor and must be collected and remitted to the Taxing Districts. All the laws, rights and remedies provided by the laws of the State for the collection of State, county, city, school and other ad valorem taxes are applicable to the collection of taxes authorized to be collected in the Redevelopment Area. The Missouri Constitution requires uniformity in taxation of real property by directing such property to be sub -classified as agricultural, residential or commercial and permitting different assessment ratios for each subclass. Residential property is currently assessed at 19% of true value in money, commercial property is assessed at 32% of true value in money, and agricultural property is assessed at 12% of true value in money. The phrase "true value in money" has been held to mean "fair market value" except with respect to agricultural property. The County Assessor assesses real property within the County. The County Assessor is responsible for preparing the tax roll each year and for submitting the tax roll to the Board of Equalization. The Board of Equalization has the authority to question and determine the proper values of real property and then adjust and equalize individual properties appearing on the tax rolls. The County Collector collects taxes for all Taxing Districts within the County limits. The County Collector deducts a commission for his services. After such collections and deductions of commission, taxes are distributed according to the Taxing District's pro rata share. Taxes are levied on all taxable property based on the equalized assessed value thereof determined as of January 1 in each year. Under Missouri law, each property must be reassessed every two years (in odd— numbered years). The County Collector prepares the tax bills and mails them to each taxpayer in September. Payment is due by December 31, after which they become delinquent and accrue a penalty of one percent per month. In the event of an increase in the assessed value of a property, notice of such increase must be given to the owner of the affected property, which notice is generally given in May. Valuation of Real Property. The County Assessor must determine the assessed value of a property based upon the State law requirement that property be valued at its true value in money. For agricultural land, true value is based on its productive capability. As to residential and commercial property, true value in money is the fair market value of the property on the valuation date. The fair market value is arrived at by using the three universally recognized approaches to value: the cost approach, the sales comparison approach and the income approach. The cost approach is typically applied when a property is newly constructed and is based on the principle of substitution. This principle states that no informed buyer will pay more for a property than the cost to reproduce or replace the property. Value is determined under the cost approach by adding the estimated land value to the replacement or reproduction cost reduced by estimated depreciation. Courts have held, however, that construction cost alone is not a proper basis for determining true value in money and that all factors which affect the use and utility of the property must be considered. 10 The sales comparison approach determines value based upon recent sales prices of comparable properties. Comparable sales are adjusted for differences in properties by comparing such items as sales price per square foot and net operating income capitalization rates. The income approach estimates market value by discounting to present value a stream of estimated net operating income. First, the property's gross potential income is estimated based on gross rents being generated at the property. A vacancy allowance is then deducted to arrive at effective gross income. Next, allowable operating expenses are deducted to arrive at an estimate of the property's net operating income. Finally, the net operating income is divided by an appropriate capitalization rate to arrive at the estimated present value of the income stream. Appeal of Assessment. State statutes set up various mechanisms for a property owner to appeal the assessment of a tax on its property. Typically, there are four issues that can be raised in property tax appeals including overvaluation, uniformity, misclassification and exemption. Overvaluation appeals are the most common appeals presented by taxpayers. An overvaluation appeal requires the taxpayer to prove that the true value in money of the property is less than that determined by the assessor. Uniformity appeals are based on the assertion that other property in the same class and county as the subject property is assessed at a lower percentage of value than the subject property. A misclassification appeal is based on an assertion that assessing authorities have improperly sub -classified a property. Exemption appeals are based on claims that the property in question is exempt from taxation. Overvaluation appeals, for the most part, must be made administratively, first, to the Board of Equalization and then to the State Tax Commission within prescribed time periods following notice of an increase in assessment. Appeals to the Board of Equalization must be filed with the County Assessor on or before the third Monday in June of each year. Appeals to the State Tax Commission must be filed by the later of August 15 and 30 days after the date of the final decision of the Board of Equalization. Where valuation is not an issue, appeals must be taken directly to the State Circuit Court rather than the State Tax Commission. If an appeal is pending on December 31, the due date for the payment of taxes, State statute provides a procedure for the payment of taxes under protest. If taxes are paid but not under protest, the taxpayer cannot recover the amount paid unless that taxes have been mistakenly or erroneously paid. Application for a refund of mistakenly or erroneously paid taxes must be made within one year after the tax in dispute was paid. Typically, only that portion of the taxes being disputed is identified as being paid under protest, unless a claim of exemption is being asserted. The portion of the tax paid under protest is required to be held in an interest bearing account. Unless an appeal before the Board of Equalization or State Tax Commission is pending, suit must be brought by the taxpayer to resolve the dispute within 90 days, or the escrowed funds will be released to the Collector of Revenue and distributed to the Taxing Districts. Reassessment and Tax Rate Rollback. As previously stated, a general reassessment of all property in the State is required to be conducted every two years. When, as a result of such reassessment, the assessed valuation within a Taxing District increases by more than an allowable percentage, the Taxing District is required to roll back the rate of tax within the Taxing District so as to produce substantially the same amount of tax revenue as was produced in the previous year increased by an amount called a "preceding valuation factor." A "preceding valuation factor" is a percentage increase or decrease based on the average annual percentage changes in total assessed valuation of the County over the previous three or five years, whichever is greater, adjusted to eliminate the effect of boundary changes, changes from State to County assessed property, general reassessment and State ordered changes. The Hancock Amendment. A constitutional amendment limiting taxation and government spending was approved by Missouri voters on September 4, 1980, and went into effect with the 1981-82 fiscal year. The amendment (Article X, Section 22(a) of the State Constitution and popularly known as the Hancock Amendment) limits the rate of increase and the total amount of taxes that shall be imposed in any fiscal year, and provides that the limit shall not be exceeded without voter approval. Provisions are included in the Hancock Amendment for rolling back tax rates to produce an amount of revenues equal to that of the previous year if the definition of the -9- tax base is changed or if property is reassessed. The tax levy on the assessed valuation of new construction is exempt from this limitation in the initial year of new construction. Tax Delinquencies. Taxes or PILOTS on real estate that remain unpaid on the first day of January, annually, are delinquent, and the County Collector is empowered to enforce the lien of the taxing jurisdictions thereon. Whenever the County Collector is unable to collect any taxes on the tax roll, having diligently endeavored and used all lawful means to do so, he is required to compile lists of delinquent tax bills collectible by him. All lands and lots on which taxes are delinquent and unpaid are subject to suit to collect delinquent tax bills or suit for foreclosure of the tax liens. Upon receiving a judgment, the Sheriff must advertise the sale of the land, fixing the date of sale within 30 days after the first publication of the notice. Delinquent taxes, with penalty, interest and costs, may be paid to the County Collector at any time before the property is sold therefor. No action for recovery of delinquent taxes shall be valid unless initial proceedings therefor are commenced within five years after delinquency of such taxes. Economic Activity Tax Revenue& The Economic Activity Tax Revenues that will be pledged to the payment of the Bonds, subject to annual appropriation, are 50% of the total additional revenue from taxes, penalties and interest imposed by the City or other Taxing Districts which are generated by economic activities within the redevelopment project area over the amount of such taxes generated by economic activities within the redevelopment project area in the calendar year prior to the approval of tax increment financing for such redevelopment project area, but excluding any taxes imposed on sales or charges for sleeping rooms paid by transient guests of hotels and motels, taxes levied pursuant to Section 70.500, RSMo., licenses, fees or special assessments, other than payments in lieu of taxes, and personal property taxes and taxes levied for the purpose of public transportation pursuant to Section 94.660, RSMo. Retail businesses are required to collect the sales tax from purchasers at the time of sale, and pay said amounts to the Department of Revenue of the State with the filing of returns, except for the sales tax on motor vehicles, trailers, boats and outboard motors, which is due at the time application is made for title and registration. The sales volume of a retail business determines the frequency of payments made to the Department of Revenue of the State. In most cases, the retail businesses in the City make monthly payments to the Department of Revenue of the State, which are due on the tenth day of each calendar month for sales taxes collected in the preceding calendar month. Retail businesses located in the City submit applications to the City for a merchant's license and an occupancy permit, and before such license and permit are awarded verification of a tax identification number from the State is made by the City. In the event of a failure by a retail business to remit sales taxes, interest and penalties, the unpaid amount may become a lien in the nature of a judgment lien against the delinquent taxpayer. In the event of overpayment by any retail business as a result of error or duplication, provision is made under State law for refunds. Pursuant to the State law, taxpayers who promptly pay their sales taxes are entitled to retain 2% of the amount of taxes owed. Within 30 days of receipt of sales taxes by the Department of Revenue of the State, the Director of the Department of Revenue remits to the State Treasurer for deposit in a special trust fund for the benefit of each political subdivision entitled to a sales tax distribution the amount of such sales tax receipts less 1% of such amount which constitutes a fee paid to the State for collecting and distributing the tax. The State Treasurer then distributes moneys on deposit in the special trust fund on behalf of each such political subdivision to such political subdivision on a monthly basis. The Redevelopment Plan The City previously approved the Redevelopment Plan, as amended and a Redevelopment Project Area I in connection therewith ("Redevelopment Area I"), pursuant to the TIF Act, which TIF Redevelopment Plan has as its objectives a planned business community within the city limits of Riverside changing the development pattern from vacant land to industrial and commercial uses. The City approved subsequent -10- amendments to the TIF Redevelopment Plan, including a 2006 amendment that created a Redevelopment Project Area I/I11 ("Redevelopment Area I/III," together with Redevelopment Area I, the "Redevelopment Area"). The most recent amendment to the TIF Redevelopment Plan was completed in 2007. This amendment removed property originally included in the Redevelopment Area. The City does not currently anticipate any further amendments to the Redevelopment Area. The City may amend the TIF Redevelopment Plan in the future related to currently ongoing and future projects. Throughout the years, numerous phases have been activated within the Redevelopment Area. Set forth below are the different phases, the date on which they were activated, and the date on which PILOTs and EATS will cease to be collected pursuant to the TIF Act: Phase* Activation Collection Ends A 2/4/1997 2/4/2020 B 2/4/1997 2/4/2020 C 2/4/1997 2/4/2020 D 2/4/1997 2/4/2020 E 8/19/1997 8/19/2020 F 5/8/1998 5/8/2021 G 5/5/1999 5/5/2022 H 5/5/1999 5/5/2022 I 5/5/1999 5/5/2022 J 12/7/1999 12/7/2022 L 10/9/2001 10/9/2024 M 12/17/2002 12/17/2025 N 12/28/2005 12/28/2028 O 1/31/2006 1/31/2029 Final 7/11/2006 7/11/2029 * Phase K has been omitted because it was not activated. The TIF Redevelopment Plan contemplates the redevelopment of an area located generally on the north bank of the Missouri River along Interstate 635 at Highway 69. The City designated the Redevelopment Area as a blighted area under the TIF Act. The Redevelopment Area was originally approximately 1,800 acres. However, certain property was subsequently removed leaving the size of the Redevelopment Area as approximately 911 acres. Exclusive of private development, overall costs for improvements completed pursuant to the TIF Redevelopment Plan were approximately $159,635,000, including approximately $47,000,000 for road, highway and utility improvements, environmental remediation and soft costs, approximately $100,000,000 in levee improvements and approximately $12,635,000 for a highway interchange. These improvements have been substantially completed. Approximately $55,100,000 of the cost of the levee improvements was funded by the federal government. The proceeds of the Refunded Bonds, as well as the bonds refunded by the Series 2017 Levee District Bonds and the bonds issued by the City that were refunded by the Series 2011A Bonds and the Series 2014 Bonds, were used to pay various costs of the TIF Project under the TIF Redevelopment Plan, including levee improvements and infrastructure costs. -11- Set forth below are historical Incremental Tax Revenues for the years 2011 through 2016: TIF District Revenues 2011 2012 2013 2014 2015 2016 Payments in Lieu of Taxes $2,119,637 $2,189,092 $2,220,027 $2,483,902 $3,365,041 $4,110,312 Economic Activity Taxes 308,007 386,479 351,302 264,458® 363,758 330,377 State Tax Increment Funds" 83,016 100,000 846,259 1,135,422 1,442,955 2,247,758 Land Sales used to Redeem Debt 310,000 405,000 930,000 385,000 0 268,875 Total TIF District Revenues $2,820,660 $3,080,571 $4,347,588 $4,268,782 $5,171,754 $6,957,322 * Decrease in Economic Activity Taxes due to a business closing within the Redevelopment Area. ** For purposes of this table, State Increment Funds are shown separately from Economic Activity Taxes. Source: City Set forth below are projected Incremental Tax Revenues for the years 2017 through 2022: TIF District Revenues" 2017 2018 2019 2020 2021""" 2022 Payments in Lieu of Taxes $4,498,952 $4,916,000 $5,241,000 $5,441,000 $4,064,000 $4,406,000 Economic Activity Taxes 305,712 300,000 300,000 300,000 60,000 60,000 State Tax Increment Funds" 2,492,628 2,464,000 2,485,000 2,507,000 2,529,000 2,551,000 Land Sales used to Redeem Debt 437,336 0 0 0 0 0 Total TIF District Revenues $7,734,628 $7,680,000 $8,026,000 $8,248,000 $6,653,000 $7,017,000 * For purposes of this table, State Increment Funds are shown separately from Economic Activity Taxes. ** Assumes no additional development beyond existing projects. *** PILOTS from Argosy Casino roll off in 2021. Source: City The State is not obligated to maintain its current sales tax rate or income tax rate and in 2014 enacted a law (Senate Bill 409) that will lower future income tax rates. Senate Bill 509, enacted over the Governor's veto, triggers a reduction in the State's top marginal income tax rate if State tax revenues exceed a baseline value by at least $150,000,000. See "BONDOWNERS' RISKS" herein. [Remainder of page intentionally blank.] -12- Set forth below is the projected debt service coverage for the years 2017 through 2020: Debt Service Coveraee 2017 2018 2019 2020 Total TIF District Revenues $7,734,628 $7,680,000 $8,026,000 $8,248,000 Series 2011A Bonds and Series 2014 Bonds Debt Service $1,750,619 $1,767,069 $1,770,831 $1,419,381 Series 2017 Levee District Bonds Debt 2025 Total TIF District Revenues $6,553,000 Service" $980,525 $917,478 $920,083 $919,250 Available TIF Revenues $5,003,484 $4,995,453 $5,335,086 $5,909,369 Series 2007 Bonds/Series 2017 Bonds Debt Bonds Debt Service - Service" $3,129,063 $2,822,344 $2,815,400 $2,815,600 Coverage Ratio 1.60 1.77 1.89 2.10 * City pays assessments on City -owned property. If City -owned property is sold, the City's portion of the debt service decreases. ** Year 2017 indicates the debt service owed on the Refunded Bonds. Years 2018-2020 reflect the debt service owed on the Series 2017 Bonds and will be updated upon final pricing. $923,117 $923,917 $923,650 Source: City Available TIF Revenues $5,631,750 $6,093,883 Set forth below is the projected debt service coverage for the years 2021 through 2025: Debt Service Coverage 2021" 2022 2023 2024 2025 Total TIF District Revenues $6,553,000 $7,017,000 $7,157,000 $6,951,000 $4,460,000 Series 2011A Bonds and Series 2014 Bonds Debt Service - - - - - Series 2017 Levee District Bonds Debt Service $921,250 $923,117 $923,917 $923,650 $925,317 Available TIF Revenues $5,631,750 $6,093,883 $6,233,083 $6,027,350 $3,534,683 Series 2017 Bonds Debt Service" $2,816,600 $2,814,000 $2,817,800 $2,817,600 $2,818,400 Coveraee Ratio 2.00 2.17 2.21 2.14 1.25 * PILOTs from Argosy Casino roll off in 2021 ** To be updated with Series 2017 Bond Debt Service upon final pricing. Source: City -13- On May 10, 2011, the City and Briarcliff Realty, LLC executed a Master Development Agreement (the "Agreement") related to the development of approximately 260 acres in the Redevelopment Area (the "MDA Property"), a portion of which is currently owned by the Authority and serves as partial security for the Refunded Bonds. The MDA Property is substantially bounded by Horizons Parkway to the west, 635 to the south and east and the BNSF railroad tracks to the north. Subsequently, the development rights within the Agreement were transferred to NorthPoint Development LLC to complete the project. To date, pursuant to the Agreement, the City (through the Authority) sold approximately 92.73 acres for development upon which seven buildings have been privately completed for a total of approximately 1,435,698 square feet of net usable commercial space which is believed to be substantially fully leased and currently occupied by 18 companies with total employment of 1,344. There is currently an approximately 412,065 square foot building under construction. The City estimates the private development covered by the Agreement has exceeded $70,960,553. The remaining acreage held by the Authority subject to the Agreement is approximately 150 acres, [Remainder of page intentionally blank.] M is willing to commit its annual appropriation obligation to the repayment of the Financing Payments with respect to such Additional Bonds. This means that the City may issue or cause to be issued Additional Bonds on a parity with the Series 2017 Bonds even if the Incremental Tax Revenues are not sufficient to provide for the Financing Payments on the Series 2017 Bonds, without regard to the proposed Additional Bonds. The lien on the Series 2017 Bonds on the Incremental Tax Revenues is subordinate to the lien of the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds (together with any bonds issued on a parity with such bonds) on such revenues. While the City currently projects that there will be sufficient Incremental Tax Revenues to provide for the Financing Payments on the Series 2017 Bonds as well as required payments on the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein, there can be no assurance that such projections will be realized. As a consequence, prospective investors should evaluate the likelihood that the City will continue to appropriate moneys sufficient to make the Financing Payments under the Financing Agreement if Incremental Revenues are not sufficient to make the Financing Payments on the Series 2017 Bonds as well as required payment son the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS," "PLAN OF FINANCING — The Redevelopment Plan" and G°BONDOWNERS' RISKS" herein. Sources and Uses of Funds" Sources of Funds: Principal amount of the Series 2017 Bonds $ Transfer from Series 2007 Debt Service Reserve Fund [Net] Reoffering Premium Total sources of funds $ Uses of Funds: Deposit to Escrow Fund Deposit to Debt Service Reserve Fund Costs of Issuance (including Underwriter' Discount) Total uses of funds $ *Note: At the time of closing, funds in the Series 2007 Debt Service Reserve Fund, in the amount of approximately $2,449,788* will be released to the City. THE SERIES 2017 BONDS The following is a summary of certain terms and provisions of the Series 2017 Bonds. Reference is hereby made to the Series 2017 Bonds and the provisions with respect thereto in the Indenture and the Financing Agreement for the detailed terms and provisions thereof. General Terms The Series 2017 Bonds are being issued in the principal amount stated on the cover page, are dated the date of delivery thereof, will bear interest from the date thereof or from the most recent interest payment date to which interest has been paid at the rates per annum set forth on the inside cover page, payable semiannually on May 1 and November 1 of each year, beginning on May 1, 2018, and will mature on May 1 in the years shown on the maturity schedule set forth on the inside cover page. The Series 2017 Bonds are issuable as fully registered bonds in the denomination of $5,000 or any integral multiple thereof. The principal of and . Preliminary, subject to change. -16- redemption premium, if any, on the Series 2017 Bonds are payable at the principal corporate trust office of the Trustee. The interest on the Series 2017 Bonds is payable (a) by check or draft mailed by the Trustee to the persons who are the registered Owners of the Series 2017 Bonds as of the close of business on the 15th day of the month preceding the respective interest payment dates, as shown on the bond registration books maintained by the Trustee, or (b) at the expense of the registered owner, by electronic transfer of immediately available funds at the written request of any registered owner of $1,000,000 or more in aggregate principal amount of Series 2017 Bonds, if such written notice specifying the electronic transfer instructions is provided to the Trustee not less than 15 days prior to the Interest Payment Date. Purchases of the Series 2017 Bonds will be made in book -entry only form (as described immediately below), in the denomination of $5,000 or any integral multiple thereof. Purchasers of the Series 2017 Bonds will not receive certificates representing their interests in the Series 2017 Bonds purchased. If the specified date for any payment on the Series 2017 Bonds is a date other than a Business Day, such payment may be made on the next Business Day without additional interest and with the same force and effect as if made on the specified date for such payments. Book -Entry Only System General. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Series 2017 Bonds. The Series 2017 Bonds will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered Bond certificate will be issued for each maturity of the Series 2017 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. So long as Cede & Co., as nominee of DTC, is the registered owner of the Series 2017 Bonds, the Beneficial Owners of the Series 2017 Bonds will not receive or have the right to receive physical delivery of the Series 2017 Bonds, and references herein to the Bondowners or registered Owners of the Series 2017 Bonds shall mean Cede & Co. and shall not mean the Beneficial Owners of the Series 2017 Bonds. DTC and its Participants. DTC, the world's largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchase of Ownership Interests. Purchases of Series 2017 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2017 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2017 Bond (`Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written -17- confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2017 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2017 Bonds, except in the event that use of the book -entry system for the Series 2017 Bonds is discontinued. Transfers. To facilitate subsequent transfers, all Series 2017 Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2017 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2017 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2017 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Notices. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2017 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2017 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Series 2017 Bonds may wish to ascertain that the nominee holding the Series 2017 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Series 2017 Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Voting. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2017 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Series 2017 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments of Principal and Interest. Redemption proceeds, distributions, and dividend payments on the Series 2017 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Authority or the Trustee, on the payment date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trustee, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. -18- Discontinuation of Book Entry System. DTC may discontinue providing its services as depository with respect to the Series 2017 Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The Authority may decide to discontinue use of the system of book -entry -only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC. The information above concerning DTC and DTC's book -entry system has been obtained from sources that the Authority and the City believe to be reliable, but is not guaranteed as to accuracy or completeness by and is not to be construed as a representation by the Authority, the City, the Trustee or the Underwriter. The Authority, the City, the Trustee and the Underwriter make no assurances that DTC, Direct Participants, Indirect Participants or other nominees of the Beneficial Owners will act in accordance with the procedures described above or in a timely manner. Redemption" The Series 2017 Bonds are not subject to optional or mandatory redemption prior to maturity. Registration, Transfer and Exchange The Series 2017 Bonds will be issued in fully registered form in denominations of $5,000 and any integral multiple thereof. The Series 2017 Bonds will be issued in fully registered form, and each Series 2017 Bond will be registered in the name of the owner thereof on the registration books maintained by the Trustee. The Series 2017 Bonds are transferable by the registered holder thereof or by such holder's attorney duly authorized in writing upon presentation thereof at the principal corporate trust office of the Trustee. Any Series 2017 Bond may be exchanged at the principal corporate trust office of the Trustee for a like aggregate principal amount of Series 2017 Bonds of the same maturity of other authorized denominations. The Trustee and the Authority may charge a fee covering taxes and other governmental charges in connection with any exchange, change in registration or transfer of any Series 2017 Bond. The Trustee shall not be required to register the transfer of or exchange any Series 2017 Bond that has been called or selected for call for redemption or during the period of fifteen days next preceding the first mailing of notice of redemption. The foregoing provisions for the registration, transfer and exchange of the Series 2017 Bonds will not be applicable to purchasers of the Series 2017 Bonds so long as the Series 2017 Bonds are subject to the DTC or other book - entry only system. CUSIP Numbers It is anticipated that CUSIP identification numbers will be printed on the Series 2017 Bonds, but neither the failure to print such numbers on any Series 2017 Bonds, nor any error in the printing of such numbers, shall constitute cause for a failure or refusal by the purchaser thereof to accept delivery of and pay for any Series 2017 Bonds. SECURITY AND SOURCES OF PAYMENT FOR THE BONDS General The Series 2017 Bonds will be issued under and will be equally and ratably secured under the Indenture, which will assign and pledge to the Trustee (1) certain rights of the Authority under the Financing Agreement, including the right to receive Financing Payments thereunder, which Financing Payments are secured by a subordinate lien on the Incremental Tax Revenues deposited into the Special Allocation Fund and -19- (2) the funds and accounts, including the money and investments in them, which the Trustee holds under the terms of the Indenture. Special, Limited Obligations The Series 2017 Bonds and the interest thereon are special, limited obligations of the Authority, payable solely from (1) Financing Payments to be made by the City under the Financing Agreement, (2) a Debt Service Reserve Fund established for the Series 2017 Bonds, and (3) certain funds held by the Trustee under the Indenture, and not from any other fund or source of the Authority, and are secured under the Indenture and the Financing Agreement as described herein. Pursuant to the Financing Agreement, the City has pledged (i) a subordinate lien on available Incremental Tax Revenues (defined as Payments in Lieu of Taxes (or PILOTS) and Economic Activity Taxes (or EATs), both described herein) and (ii) subject to annual appropriation, legally available revenues of the City. Except as provided in the following sentence, all payments by the City under the Financing Agreement are subject to annual appropriation. As noted above and as more fully described herein, the City's obligation to make the Financing Payments under the Financing Agreement is secured by a subordinate lien on the Incremental Tax Revenues, a portion of which described herein as the PILOTS, are not subject to annual appropriation. The Series 2017 Bonds shall not constitute a debt or liability of the State or of any political subdivision thereof within the meaning of any State constitutional provision or statutory limitation and shall not constitute a pledge of the faith and credit of the State or of any political subdivision thereof. The issuance of the Series 2017 Bonds shall not directly or indirectly obligate the Authority, its officers, directors or employees, the State or any political subdivision thereof to provide any funds for their payment. The issuance of the Series 2017 Bonds shall not, directly, indirectly, or contingently, obligate the State or any political subdivision thereof to levy any form of taxation therefor or to make any appropriation for their payment. The Authority has no taxing power. As the City has sold property within the Redevelopment Area to private parties and private parties have completed private projects, the portion of the property within the Levee District owned by the Authority and the City has been reduced and the value of taxable property within the Redevelopment Area has increased. However, the City makes no representation regarding its expectations for future sales of property, and the rate at which additional property will be subject to taxation in the Redevelopment Area. The lien of the Series 2017 Bonds on the Incremental Tax Revenues is subordinate to the lien of the Series 2014 Bonds, the Series 2011A Bonds and the Series 2017 Levee District Bonds on such revenues. Payment of the principal of and interest on the Series 2017 Bonds is not secured by any mortgage on the Project or any other facilities or property of the City. The Financing Agreement Financing Payments and Other Payments. Under the Financing Agreement, the City is required to make Financing Payments to the Trustee for deposit into the Debt Service Fund in amounts sufficient to pay the principal of and interest on the Series 2017 Bonds when due. Except as provided in the following paragraph, the City's obligations to pay Financing Payments and Additional Payments shall be limited, special obligations of the City payable solely from, subject to annual appropriation by the City as described above, all legally available revenues of the City and from amounts pledged to secure repayment of the Financing Payments in the Special Allocation Fund as provided in the Authorizing Ordinance. The taxing power of the City is not pledged to the payment of the Financing Payments as to principal or interest. The City's obligation to pay Financing Payments and Additional Payments shall not constitute general obligations of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction. -20- Notwithstanding the foregoing, PILOTS deposited into the Special Allocation Fund are not subject to annual appropriation and are pledged by the City pursuant to the Authorizing Ordinance to secure Financing Payments and Additional Payments. The lien of the Series 2017 Bonds on the Incremental Tax Revenues is subordinate to the lien of the Series 2014 Bonds, the Series 2011A Bonds and the Series 2017 Levee District Bonds (together with any bonds issued on a parity with such bonds) on such revenues. Annual Appropriations. The City intends, on or before the last day of each Fiscal Year, to budget and appropriate, specifically with respect to the Financing Agreement, moneys sufficient to pay all the Financing Payments and reasonably estimated Additional Payments for the next succeeding Fiscal Year. The City shall deliver written notice to the Trustee no later than 15 days after the commencement of its Fiscal Year stating whether or not the Board of Aldermen has appropriated funds sufficient for the purpose of paying the Financing Payments and reasonably estimated Additional Payments to become due during such Fiscal Year. If the Board of Aldermen shall have made the appropriation necessary to pay the Financing Payments and reasonably estimated Additional Payments to become due during such Fiscal Year, the failure of the City to deliver the foregoing notice on or before the 15th day after the commencement of its Fiscal Year shall not constitute an Event of Nonappropriation and, on failure to receive such notice 15 days after the commencement of the City's Fiscal Year, the Trustee shall request written confirmation from the City of the fact of whether or not such appropriation has been made. If the Board of Aldermen shall not have made the appropriation necessary to pay the Financing Payments and Additional Payments reasonably estimated to become due during such succeeding Fiscal Year, the failure of the City to deliver the foregoing notice on or before the 15t` day after the commencement of its Fiscal Year shall constitute an Event of Nonappropriation. Annual Budget Request. The City Administrator or other officer of the City at any time charged with the responsibility of formulating budget proposals shall include in the budget proposals submitted to the Board of Aldermen, in each Fiscal Year in which this Financing Agreement shall be in effect, an appropriation for all the Financing Payments and reasonably estimated Additional Payments required for the ensuing Fiscal Year; it being the intention of the City that the decision to appropriate or not to appropriate under this Financing Agreement shall be made solely by the Board of Aldermen and not by any other official of the City. The City intends, subject to the provisions above respecting the failure of the City to budget or appropriate funds to make Financing Payments and Additional Payments, to pay the Financing Payments and Additional Payments under the Financing Agreement. The City reasonably believes that legally available funds in an amount sufficient to make all Financing Payments and Additional Payments during each Fiscal Year can be obtained. The City further intends to do all things lawfully within its power to obtain and maintain funds from which the Financing Payments and Additional Payments may be made, including making provision for such Financing Payments and Additional Payments to the extent necessary in each proposed annual budget submitted for approval in accordance with applicable procedures of the City and to exhaust all available reviews and appeals in the event such portion of the budget is not approved. The City's Director of Finance is directed to do all things lawfully within such person's power to obtain and maintain funds from which the Financing Payments and Additional Payments may be paid, including making provision for such Financing Payments and Additional Payments to the extent necessary in each proposed annual budget submitted for approval or by supplemental appropriation in accordance with applicable procedures of the City and to exhaust all available reviews and appeals in the event such portion of the budget or supplemental appropriation is not approved. Notwithstanding the foregoing, the decision to budget and appropriate funds is to be made in accordance with the City's normal procedures for such decisions. Financing Payments to Constitute Current Expenses of the City. The Authority and the City acknowledge and agree that the Financing Payments and Additional Payments under the Financing Agreement shall constitute currently budgeted expenditures of the City, and shall not in any way be construed or interpreted as creating a liability or a general obligation or debt of the City in contravention of any applicable constitutional or statutory limitations or requirements concerning the creation of indebtedness by the City, nor shall anything contained in the Financing Agreement constitute a pledge of the general credit, tax revenues, funds or moneys of the City. The City's obligations to pay Financing Payments and Additional Payments under the Financing Areement shall be from year to year only, and shall not constitute a mandatory payment -21- obligation of the City in any ensuing Fiscal Year beyond the then current Fiscal Year. Neither the Financing Agreement nor the issuance of the Series 2017 Bonds shall directly or indirectly obligate the City to levy or pledge any form of taxation or make any appropriation or make any payments beyond those appropriated for the City's then current Fiscal Year, but in each Fiscal Year Financing Payments and Additional Payments shall be payable solely from the amounts budgeted or appropriated therefor out of the income and revenue provided for such year, plus any unencumbered balances from previous years; provided, however, that nothing herein shall be construed to limit the rights of the Owners of the Series 2017 Bonds or the Trustee to receive any amounts which may be realized from the Trust Estate pursuant to the Indenture. Failure of the City to budget and appropriate said moneys on or before the last day of any Fiscal Year shall be deemed an Event of Nonappropriation. Pledge of Incremental Tax Revenues to Secure Financing Payments. The City has pledged the Incremental Tax Revenues derived from the Redevelopment Area to secure its obligations to make the Financing Payments under the Financing Agreement, which pledge is subordinate to the pledge of such revenues securing the Series 2011A Bonds, the Series 2014 Bonds, the Series 2017 Levee District Bonds and any additional bonds issued under the trust indentures related to such bonds. The "Incremental Tax Revenues" consist of (a) PILOTS derived from the Redevelopment Area, and (b) subject to annual appropriation by the City, Economic Activity Tax Revenues received by the City with respect to the Redevelopment Area. Economic Activity Tax Revenues consist of 50% of the City and County sales taxes generated in the Redevelopment Area as well as, for the purposes of this Oficial Statement, the State Income Tax Revenues (defined above). Any moneys and securities in the Special Allocation Fund not required to pay debt service on such bonds in any year may be used by the City for other reimbursable project costs. PILOTS are those revenues attributable to the increase in the assessed valuation of real property within the Redevelopment Area over and above the initial assessed valuation of real property in the Redevelopment Area as of the date on which tax increment financing for the Redevelopment Area was adopted. Such increase is multiplied by the then current aggregate tax rate applicable to such property to determine the PILOTS. Such PILOTS have been irrevocably pledged by the City to the payment of the Series 2017 Bonds. Economic Activity Tax Revenues under the TIF Act are those revenues attributable to 50% of the increase in tax revenues (other than real property tax revenues) generated by economic activities within a redevelopment area, including sales and utilities taxes, but excluding personal property taxes, hotel/motel taxes, licenses, fees and special assessments. The TIF Project has been approved by the State to receive the benefit of 50% of the increase in the general revenue portion of State Income Tax Revenues, which funds are subject to annual appropriation by the Missouri General Assembly. For the purposes of this Official Statement, any State Income Tax Revenues received by the City are included in the definition of Economic Activity Tax Revenues. The expenditure of Economic Activity Tax Revenues is subject to annual appropriation by the City. There can be no assurances that the City will appropriate such revenues in any year and no ordinance obligates the City to do so. Debt Service Reserve Fund A Series 2017 Debt Service Reserve Fund is established pursuant to the Indenture and is required to be funded in an amount equal to $1,000,000 (the "Debt Service Reserve Fund Requirement"). Amounts in the Series 2017 Debt Service Reserve Fund are to be used to pay principal of and interest on the Series 2017 Bonds to the extent of any deficiency in the Series 2017 Debt Service Fund for such purposes, as further described in the Indenture. Amounts on deposit in the Series 2017 Debt Service Reserve Fund are not pledged to secure any Additional Bonds. Preliminary, subject to change. -22- The Indenture Under the Indenture, the Authority will pledge and assign to the Trustee, for the benefit of the Bondowners, all of its rights under the Financing Agreement, including all Financing Payments and other amounts payable under the Financing Agreement (except for certain fees, expenses and advances and any indemnity payments payable to the Authority) as security for the payment of the principal of and interest on the Series 2017 Bonds. See "SUMMARY OF THE INDENTURE" in Appendix C hereto. Additional Bonds The Authority from time to time may, in its sole discretion, at the written request of the City, authorize the issuance of Additional Bonds on a parity with the Series 2017 Bonds upon the terms and conditions provided in the Indenture; provided that (1) the terms of such Additional Bonds, the purchase price to be paid therefor and the manner in which the proceeds thereof are to be disbursed shall have been approved by a resolution adopted by the Authority and an ordinance adopted by the City; (2) the Authority and the City shall have entered into a Supplemental Financing Agreement to acknowledge that Financing Payments are revised to the extent necessary to provide for the payment of the principal of, redemption premium, if any, and interest on the Additional Bonds and to extend the term of the Financing Agreement if the maturity of any of the Additional Bonds would otherwise occur after the expiration of the term of the Financing Agreement; (3) the Additional Bonds are issued solely to refund the Series 2017 Bonds; and (4) Authority and the City shall have otherwise complied with the provisions of the Financing Agreement and the Indenture with respect to the issuance of such Additional Bonds. The sole economic test for the issuance of Additional Bonds on a parity with the Series 2017 Bonds and any Additional Bonds then outstanding is whether the City is willing to commit its annual appropriation obligation to the repayment of the Financing Payments with respect to such Additional Bonds. This means that the City may issue or cause to be issued Additional Bonds on a parity with the Series 2017 Bonds even if the Incremental Tax Revenues are not sufficient to provide for the Financiniz Payments on the Series 2017 Bonds, without regard to the proposed Additional Bonds. The lien on the Series 2017 Bonds on the Incremental Tax Revenues is subordinate to the lien of the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds (together with any bonds issued on a parity with such bonds) on such revenues. While the City currently projects that there will be sufficient Incremental Tax Revenues to provide for the Financing Payments on the Series 2017 Bonds as well as required payments on the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein, there can be no assurance that such projections will be realized. As a consequence, prospective investors should evaluate the likelihood that the City will continue to appropriate moneys sufficient to make the Financing Payments under the Financing Agreement if Incremental Revenues are not sufficient to make the Financing Payments on the Series 2017 Bonds as well as required payments on the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS," "PLAN OF FINANCING — The Redevelopment Plan' and "BONDOWNERS RISKS" herein. [Remainder of page intentionally blank.] -23- CITY FINANCIAL SUMMARY The below table* presents a summary of the City's general fund for the last five fiscal years: Income Statement 2013 2014 2015 2016 2017** Revenues Tax Revenues $ 2,218,801 $ 2,326,593 $ 2,278,955 $2,728,321 $2,699,621 TIF Revenues 3,432,013 3,883,538 5,123,842 6,654,901 6,912,350 Gaming Revenues 7,133,275 6,399,850 6,303,001 6,569,566 6,589,264 Gaming - Real Estate Income 4,155,181 4,060,295 4,182,418 4,394,870 4,358,378 Other Revenues*** - 6,834 786 3,910,923 3,275,906 _ 2,519,103 2,334,710 Total Revenues $23,774,056 $20,581,199 $21,164,122 $22,866,761 $22,894,323 Expenditures Current Expenditures $10,754,579 $10,954,985 $15,602,021 $11,463,851 $11,642,751 Capital Outlay 16,861,669 7,808,465 4,455,505 2,768,726 2,629,738 Debt Service 5,407,606 5,642,014 4,660,709 5,148,481 5,319,681 Total Expenditures $33,023,854 $24,405,464 $20,262,730 $19,381,058 $19,592,170 Net Revenues Net Revenues $(9,247,798) $(3,824,265) $901,392 3,485,703 3,302,153 Capital Outlay 16,861,669 _ 7,808,465 4,455,505 2,768,726 - 2,629,738 Net Revenues + Capital_Outlay $7,61-1-,-871----$3-,984,-200-----$5,356,897 $6,254,429 $5,931,891 *Headings used in the above table are consistent with those set forth in the City's audited financial statements **2017 numbers are unaudited *** Includes the following revenues: (1) Intergovernmental Revenue, (2) Charges for Services, (3) Investment Earnings, (4) Licenses and Fees, (5) Fines and Forfeitures, (6) Recreation Fees, (7) Miscellaneous, (8) Developer Contribution and (9) Proceeds form Sale -Leaseback. Source: City For further detail related to expenditures for capital improvements, additional detail related to gaming revenues, changes to the manner in which the gaming revenues will be applied to funds following the delivery of the Series 2017 Bonds, and financial information concerning the City, see Appendix A. -24- BONDOWNERS' RISKS The following is a discussion of certain risks that could affect payments to be made by the City with respect to the Series 2017 Bonds. Such discussion is not, and is not intended to be, exhaustive and should be read in conjunction with all other parts of this Official Statement and should not be considered as a complete description of all risks that could affect such payments. Prospective purchasers of the Series 2017 Bonds should analyze carefully the information contained in this Official Statement, including the Appendices hereto, and additional information in the form of the complete documents summarized herein and in Appendix C, copies of which are available as described herein. General The Series 2017 Bonds are limited obligations of the Authority payable by the Authority solely from payments to be made by the City pursuant to the Financing Agreement and from certain other funds held by the Trustee under the Indenture. No representation or assurance can be given that the City will realize revenues in amounts sufficient to make such payments under the Financing Agreement with respect to the Series 2017 Bonds. Risk Factors Relating to the City's Obligations to Make Financing Payments General Except as described in "Pledge of Incremental Tax Revenues", below, all payments by the City under the Financing Agreement are subject to annual appropriation. The City currently intends, but is not obligated, to make payments under the Financing Agreement. Risk of Non Appropriation. The City's obligation to make the Financing Payments under the Financing Agreement is subject to annual appropriation, except as noted below (PILOTs). Although the City has covenanted to request annually that the appropriation of the Financing Payments be included in the budget submitted to the Board of Aldermen for each fiscal year, there can be no assurance that such appropriation will be made, and the City is not legally obligated to do so. Pledge of Incremental Tax Revenues The City's obligation to make the Financing Payments under the Financing Agreement is secured by a subordinate lien on the Incremental Tax Revenues (as described herein), a portion of which, described herein as the PILOTS, are not subject to annual appropriation, while the remainder of which, the EATS, including the State Income Tax Revenues, are subject to annual appropriation by the City and the General Assembly of the State, respectively, as discussed in further detail herein. No portion of the TIF Project is pledged to secure the Series 2017 Bonds. The failure of the City to appropriate sufficient funds in any year would not result in the City losing the use of the TIF Project. While a failure to appropriate Incremental Tax Revenue by the State or the City may not constitute an Event of Default on the Bonds, the Bondowners are substantially relying on annual appropriations by the City for the debt service pursuant to the Financing Agreement for the payment of timely principal and interest on the Series 2017 Bonds. A failure to make payments under the Financing Agreement would constitute an Event of Default on the Series 2017 Bonds for which remedies are limited by the terms of the Financing Agreement and the Indenture. Subordination of Incremental Tax Revenues. The City's obligation to make the Financing Payments under the Financing Agreement is secured by a subordinate lien on the Incremental Tax Revenues (as described herein). Accordingly, if Incremental Tax Revenues are insufficient to pay debt service on the Series 2011A, Series 2014 and the City's obligations on the Series 2017 Levee District Bonds, and any additional bonds issued under those indentures there will be no available Incremental Tax Revenues for payment on the Series 2017 Bonds. No Mortgage of any Project or any other Facilities of the City. Payment of the principal and interest on the Series 2017 Bonds is not secured by any mortgage on any Project or any other facilities or property of -25- the City or any developer. Except as provided herein, the Series 2017 Bonds are payable solely from (1) Financing Payments to be made by the City under the Financing Agreement, (2) a Debt Service Reserve Fund established for the Series 2017 Bonds, and (3) certain funds held by the Trustee under the Indenture, and not from any other fund or source of the Authority, and are secured under the Indenture and the Financing Agreement as described herein. Risk Factors Relating to the Collection of Incremental Tax Revenues As noted herein the payment by the City of Financing Payments under the Financing Agreement is secured by a subordinate pledge of the Incremental Tax Revenues (PILOTS and EATS) derived from the Redevelopment Area. Prospective investors should evaluate factors which could cause such Incremental Tax Revenues to be below the City's estimates in order to determine the capacity of the City's legally available revenues to provide for the Financing Payments with respect to the Series 2017 Bonds in the event the Incremental Tax Revenues are not sufficient to make such payments. There are a variety of reasons the collection of Incremental Tax Revenues may not be realized as expected by the City, including but not limited to the following: Risk of Damage or Destruction. The partial or complete destruction of improvements within the Redevelopment Area, as a result of fire, natural disaster or similar casualty event, would adversely impact the collection of the Incremental Tax Revenues. Risk of Failure to Maintain Levels of Assessed Valuations. There can be no assurance that the assessed value of property within the Redevelopment Area will equal or exceed the expected assessed value. Even if the assessed value is initially determined as expected, there can be no assurance that such assessed value will be maintained throughout the term of the Series 2017 Bonds. The property owner has the ability to appeal all assessed value determinations. Changes in State and Local Tax Laws. The City's internal estimates of the Incremental Tax Revenues assume no substantial change in the basis of extending, levying and collecting real property taxes, sales taxes, PILOTS and Economic Activity Tax Revenues. Any change in the current system of collection and distribution of real property taxes, sales taxes, PILOTS or Economic Activity Tax Revenues in the County or the City, including without limitation the reduction or elimination of any such tax, judicial action concerning any such tax or voter initiative, referendum or action with respect to any such tax, could adversely affect the availability of revenues to pay the principal of and interest on the Series 2017 Bonds. The State is not obligated to maintain its current sales tax rate or income tax rate and in 2014 enacted a law (Senate Bill 409) that will lower future income tax rates. Senate Bill 509, enacted over the Governor's veto, triggers a reduction in the State's top marginal income tax rate if State tax revenues exceed a baseline value by at least $150,000,000. The $150,000,000 threshold was satisfied for the first time during the State's fiscal year 2017. Accordingly, the State's top marginal income tax rate will be reduced from 6.0% to 5.9% beginning January 1, 2018 and, by operation of Senate Bill 509, may be reduced by 0.1% each subsequent year until it reaches 5.5%. The projections described herein under the caption "PLAN OF FINANCING" assumes that the State's income tax rates will stay at the rates set forth in Senate Bill 509 for the duration of the Series 2017 Bonds. Any further reductions in the State's income tax rate will reduce the State Income Tax Increment. Reduction in State and Local Tax Rates. Any taxing district authorized to impose sales taxes or levy real property taxes on any real estate included within the Redevelopment Area could lower its tax rate, which would have the effect of reducing the Economic Activity Taxes and/or PILOTS derived from the Redevelopment Area. Changes in the Missouri income tax rates could result in a reduction of the State Income Tax Revenues. -26- Risk of Non Appropriation of Economic Activity Taxes The application of Economic Activity Tax Revenues in the Special Allocation Fund is subject to annual appropriation by the City. Although the City has covenanted to request annually that the appropriation of the Economic Activity Tax Revenues in the Special Allocation Fund be included in the budget submitted to the Board of Aldermen for each fiscal year, there can be no assurance that such appropriation will be made by the Board of Aldermen, and the Board of Aldermen is not legally obligated to do so. Additional Bonds. The sole economic test for the issuance of Additional Bonds on a parity with the Series 2017 Bonds is whether the City is willing to commit its annual appropriation obligation to the repayment of the Financing Payments with respect to such Additional Bonds. Additional Bonds may only be issued to refund the Series 2017 Bonds. This means that the City may issue or cause to be issued Additional Bonds on a parity with the Series 2017 Bonds even if the Incremental Tax Revenues are not sufficient to provide for the Financing Payments relating to the Series 2017 Bonds, without regard to the proposed Additional Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS - Additional Bonds." Changes in Market Conditions. The estimates of the Incremental Tax Revenues used in the City's internal projections are based on the current status of the national and local business economy and assume a future performance of the real estate market similar to the historical performance of such market in the Independence area. However, changes in the market conditions for the City, as well as changes in general economic conditions, could adversely effect the rate of appreciation and/or inflation of the property in the Redevelopment Area and, consequently, the amount of PILOTS and Economic Activity Tax Revenues collected for deposit into the Special Allocation Fund. Sales tax revenues historically have been sensitive to changes in local, regional and national economic conditions. For example, sales tax revenues have historically declined during economic recessions, when high unemployment adversely affects consumption. A decline in general economic conditions could reduce the number and value of taxable transactions and thus reduce the amount of Economic Activity Tax Revenues available for repayment of the Series 2017 Bonds. Appropriation of State Income Tax Revenues. The transfer by the State of State Income Tax Revenues is subject to annual appropriation each year by the General Assembly for the projects approved that year. The Missouri Department of Economic Development (the "DED") currently intends to seek a single, aggregate appropriation for all projects approved that year, unless an applicant requests a specific appropriation for its project. The state appropriation is limited to the amount approved by DED on an annual basis. While it is anticipated that this commitment will be for the term recommended by DED, the General Assembly is not legally bound to either approve the appropriation or continue the appropriation in future years. Lack of PILOTS from Certain Property in Redevelopment Area. The City has granted real property tax abatement for various property in the Redevelopment Area to incentivize development. Consequently, such property will not generate PILOTS under the TIF Act during the time that the abatement is in effect. There can be no assurance that the City will not grant real property tax abatement to other businesses which may choose to locate in the Redevelopment Area, and if this occurs such property would not generate PILOTS. Prospective investors should take into account the exemption or possible exemption from real property taxes of certain property in the Redevelopment Area. While the City currently projects that there will be sufficient Incremental Tax Revenues to provide for the Financing Payments on the Series 2017 Bonds as well as required payments on the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein, there can be no assurance that such projections will be realized. As a consequence, prospective investors should evaluate the likelihood that the City will continue to appropriate moneys sufficient to make the Financing Payments under the Financing -27- Agreement if Incremental Revenues are not sufficient to make the Financing Payments on the Series 2017 Bonds as well as required payments on the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS," "PLAN OF FINANCING — The Redevelopment Plan" and "BONDOWNERS RISKS" herein. City's Financial Relationship with Argosy Casino In fiscal year 2017, $10,947,642, or approximately 48% of the City's cash receipts came from the Argosy Casino that is located in the Redevelopment Area. The future realization of gaming revenues from the Argosy Casino at similar levels is dependent upon, among other things, changes in the economic conditions with the City and the surrounding Kansas City metropolitan area, which conditions are unpredictable and cannot be determined at this time. There can be no assurance that future gaming revenue will be sufficient to pay debt service on the Series 2017 Bonds or that the City will appropriate gaming revenue for such purpose. In 2012 Hollywood Casino opened in Wyandotte County, Kansas, approximately 15 miles from Argosy Casino. The developer of the Hollywood Casino is Kansas Entertainment, LLC, a joint venture of Penn National Gaming Inc. and International Speedway Corporation (owner of Kansas Speedway). The first phase of the project includes 2,000 slot machines, 64 table games, restaurants and bars. The proposal also included the second Sprint Cup NASCAR race and Grand -Am sports car road course. In the second phase of the project, a 300 -room hotel with convention space is planned, along with an entertainment district featuring more restaurants and nightclubs, expanded gaming floor, and a spa. The casino is one of four state-owned, privately managed casinos in Kansas and is the fifth casino in the Kansas City metropolitan area. Penn National Gaming Inc. also owns the Argosy Casino in the City. The Hollywood Casino is located in the vicinity of a large mixed used development that includes the Kansas Speedway that hosts NASCAR races and other events, a major league soccer stadium, and other significant retail and hotel development that includes Cabelas, Nebraska Furniture Mart and numerous other smaller shops and restaurants. The City's Argosy -related revenue receipts in fiscal year 2015 were $10,485,419, or approximately 50% of City cash receipts. In fiscal year 2016, Argosy -related revenue receipts for the City were $10,964,436, or approximately 48% of City cash receipts. In fiscal years 2012 through 2014, the City's Argosy -related revenue receipts decreased. These decreases could have been due to a variety of factors, including such things as casino customers choosing the newer Hollywood Casino over the Argosy, development of another casino in the Kansas City metropolitan area, a decline in customer demand for gaming services or similar factors. There can be no assurance that the Argosy -related revenue receipts of the City will not decrease again and such factors could have a material adverse effect on the results of operations of the Argosy Casino, which in turn could have a material adverse effect on the gaming revenue available to the City to pay debt service on the Series 2017 Bonds. See "FINANCIAL INFORMATION CONCERNING THE CITY — City's Financial Relationship with Argosy Casino" in Appendix A hereto. Tax Increment Financing Litigation From time to time cases are filed in a Missouri court challenging certain aspects of the TIF Act. Circuit courts in Missouri are trial courts and decisions in those courts are not binding on other Missouri courts. Circuit court decisions, whether favorable or unfavorable with respect to the constitutionality and application of the TIF Act, may be appealed to a Missouri Court of Appeals, and, ultimately, the Missouri Supreme Court. If the plaintiffs are successful in one or more of the currently pending cases, the court's decision may interpret the requirements of the TIF Act in a manner adverse to the establishment of tax increment financing for the Project Area. It is not possible to predict whether an adverse holding in any -28- current or future litigation would prompt a challenge to the adoption of tax increment financing in the Redevelopment Project Area. If current or future litigation challenging all or any part of the TIF Act were to be applied to the adoption of tax increment financing in the Redevelopment Project Area, the TIF Revenues may not be available to pay principal of and interest on the Series 2017 Bonds and the enforceability of the Indenture could be adversely affected. None of the Authority, the City or any other party involved in the issuance and sale of the Series 2017 Bonds can predict or guarantee the outcome of any currently pending or future litigation challenging the constitutionality or the application of the TIF Act or the application by a court of a potential holding in any case to other tax increment projects. Bond Rating There is no assurance that the rating assigned to the Series 2017 Bonds at the time of issuance will not be lowered or withdrawn at any time, the effect of which could adversely affect the market price for and marketability of the Series 2017 Bonds. Enforcement of Remedies The enforcement of the remedies under the Indenture and the Financing Agreement may be limited or restricted by federal or state laws or by the application of judicial discretion, and may be delayed in the event of litigation to enforce the remedies. State laws concerning the use of assets of political subdivisions and federal and state laws relating to bankruptcy, fraudulent conveyances, and rights of creditors may affect the enforcement of remedies. Similarly, the application of general principles of equity and the exercise of judicial discretion may preclude or delay the enforcement of certain remedies. The legal opinions to be delivered with the delivery of the Series 2017 Bonds will be qualified as they relate to the enforceability of the various legal instruments by reference to the limitations on enforceability of those instruments under (1) applicable bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors' rights, (2) general principles of equity, and (3) the exercise of judicial discretion in appropriate cases. Amendment of Indenture Certain amendments to the Indenture and the Financing Agreement may be made without the consent of or notice to the registered Owners of the Series 2017 Bonds. Such amendments may adversely affect the security for the Series 2017 Bonds. LITIGATION The Authority There is not now pending or, to the knowledge of the Authority, threatened any litigation against the Authority seeking to restrain or enjoin the issuance or delivery of the Series 2017 Bonds, or questioning or affecting the validity of the Series 2017 Bonds or the proceedings of the Authority under which they are to be issued, or which in any manner questions the right of the Authority to enter into the Indenture or the Financing Agreement or to secure the Series 2017 Bonds in the manner provided in the Indenture or the Act. The City There is not now pending or, to the knowledge of the City, threatened any litigation against the City seeking to restrain or enjoin the issuance or delivery of the Series 2017 Bonds by the Authority, or questioning or affecting the validity of the Series 2017 Bonds or the proceedings of the Authority under which they are to be issued, or which in any manner questions the right of the Authority's right to enter into the Indenture or the Financing Agreement or to secure the Series 2017 Bonds in the manner provided in the Indenture, the Act or the TIF Act or the City's right to enter into the Financing Agreement. -29- LEGAL MATTERS Certain legal matters incident to the authorization and issuance of the Series 2017 Bonds by the Authority are subject to the approval of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel, whose approving opinion will be delivered with the Series 2017 Bonds. Certain legal matters related to this Official Statement will be passed upon by Gilmore & Bell, P.C., Kansas City, Missouri. Certain legal matters will be passed upon for the Underwriter by its counsel, Lewis Rice LLC. Certain legal matters will be passed upon by the City by Spencer Fane LLP, Special Counsel. Certain legal matters will be passed upon for the Authority by its counsel, Spencer Fane LLP. TAX MATTERS The following is a summary of the material Federal and State of Missouri income tax consequences of holding and disposing of the Series 2017 Bonds. This summary is based upon laws, regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly on a retroactive basis). This summary does not discuss all aspects of Federal income taxation that may be relevant to investors in light of their personal investment circumstances or describe the tax consequences to certain types of owners subject to special treatment under the Federal income tax laws (for example, dealers in securities or other persons who do not hold the Series 2017 Bonds as a capital asset, tax-exempt organizations, individual retirement accounts and other tax deferred accounts, and foreign taxpayers), and, except for the income tax laws of the State of Missouri, does not discuss the consequences to an owner under any state, local or foreign tax laws. The summary does not deal with the tax treatment of persons who purchase the Series 2017 Bonds in the secondary market. Prospective investors are advised to consult their own tax advisors regarding Federal, state, local and other tax considerations of holding and disposing of the Series 2017 Bonds. Opinion of Bond Counsel In the opinion of Gilmore & Bell, P.C., Bond Counsel, under the law existing as of the issue date of the Series 2017 Bonds: Federal and Missouri Tax F,xempdon. The interest on the Series 2017 Bonds (including any original issue discount properly allocable to an owner thereof) is excludable from gross income for federal income tax purposes and is exempt from income taxation by the State of Missouri. Alternative Minimum Tax Interest on the Series 2017 Bonds is not an item of tax preference for purposes of computing the federal alternative minimum tax imposed on individuals and corporations, but is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. Bank Qualification. The Series 2017 Bonds have not been designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. Bond Counsel's opinions are provided as of the date of the original issue of the Series 2017 Bonds, subject to the condition that the Authority and the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2017 Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The Authority and the City have covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Series 2017 Bonds in gross income for federal and Missouri income tax purposes retroactive to the date of issuance of the Series 2017 Bonds. Bond Counsel is expressing no opinion regarding other federal, -30- state or local tax consequences arising with respect to the Series 2017 Bonds but has reviewed the discussion under the heading "TAX MATTERS." Other Tax Consequences Original Issue Discount For Federal income tax purposes, original issue discount ("OID") is the excess of the stated redemption price at maturity of a Series 2017 Bond over its issue price. The issue price of a Series 2017 Bond is the first price at which a substantial amount of the Series 2017 Bonds of that maturity have been sold (ignoring sales to bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents, or wholesalers). Under Section 1288 of the Code, OID on tax-exempt bonds accrues on a compound basis. The amount of OID that accrues to an owner of a Series 2017 Bond during any accrual period generally equals (1) the issue price of that Series 2017 Bond, plus the amount of OID accrued in all prior accrual periods, multiplied by (2) the yield to maturity on that Series 2017 Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), minus (3) any interest payable on that Series 2017 Bond during that accrual period. The amount of OID accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excludable from gross income for Federal income tax purposes, and will increase the owner's tax basis in that Series 2017 Bond. Prospective investors should consult their own tax advisors concerning the calculation and accrual of OID. Original Issue Premium. If a Series 2017 Bond is issued at a price that exceeds the stated redemption price at maturity of the Bond, the excess of the purchase price over the stated redemption price at maturity constitutes "premium" on that Bond. Under Section 171 of the Code, the purchaser of that Bond must amortize the premium over the term of the Bond using constant yield principles, based on the purchaser's yield to maturity. As premium is amortized, the owner's basis in the Bond and the amount of tax-exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner. This will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes on sale or disposition of the Bond prior to its maturity. Even though the owner's basis is reduced, no federal income tax deduction is allowed. Prospective investors should consult their own tax advisors concerning the calculation and accrual of bond premium. Sale, Exchange or Retirement of Series 2017 Bonds. Upon the sale, exchange or retirement (including redemption) of a Series 2017 Bond, an owner of the Series 2017 Bond generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Series 2017 Bond (other than in respect of accrued and unpaid interest) and such owner's adjusted tax basis in the Series 2017 Bond. To the extent the Series 2017 Bonds are held as a capital asset, such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the Series 2017 Bond has been held for more than 12 months at the time of sale, exchange or retirement Reporting Requirements In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on Series 2017 Bonds, and to the proceeds paid on the sale of Series 2017 Bonds, other than certain exempt recipients (such as corporations and foreign entities). A backup withholding tax will apply to such payments if the owner fails to provide a taxpayer identification number or certification of foreign or other exempt status or fails to report in full dividend and interest income. The amount of any backup withholding from a payment to an owner will be allowed as a credit against the owner's federal income tax liability. Collateral Federal Income Tax Consequences Prospective purchasers of the Series 2017 Bonds should be aware that ownership of the Series 2017 Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch profits tax, life -31- insurance companies, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Series 2017 Bonds. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Series 2017 Bonds should consult their tax advisors as to the applicability of these tax consequences and other federal income tax consequences of the purchase, ownership and disposition of the Series 2017 Bonds, including the possible application of state, local, foreign and other tax laws. RATING S&P Global Rating, a division of S&P Global, Inc. has assigned the Series 2017 Bonds the rating shown on the cover page of this Official Statement. Such rating reflects only the view of Standard & Poor's, and any further explanation of the significance of such rating may be obtained only from the rating agency. The rating does not constitute a recommendation by the rating agency to buy, sell or hold any bonds, including the Series 2017 Bonds. There is no assurance that any rating when assigned to the Series 2017 Bonds will continue for any period of time or that it will not be revised or withdrawn. A revision or withdrawal of the rating when assigned to the Series 2017 Bonds may have an adverse affect on the market price of the Series 2017 Bonds. FINANCIAL STATEMENTS Audited financial statements of the City for the fiscal year ended June 30, 2016 excerpted from the City's Comprehensive Annual Financial Report are included in Appendix B to this Official Statement. These financial statements have been audited by RSM US LLP, independent certified public accountants, to the extent and for the periods indicated in their report which is also included in Appendix B hereto. RSM US LLP has not participated in the preparation of this Official Statement. CONTINUING DISCLOSURE The City will enter into a Continuing Disclosure Agreement with respect to ongoing disclosure which will constitute the written understanding for the benefit of the Owners of the Series 2017 Bonds required by Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (the "Rule"). The Continuing Disclosure Agreement will require the filing of certain operating data and audited financial statements of the City, and the filing of notice of certain listed events, including bond redemptions, defeasances and rating changes, among others. A summary of the Continuing Disclosure Agreement is included in Appendix C. The City has previously engaged in undertakings similar to the Continuing Disclosure Agreement to provide to the national information repositories (presently, only the MSRB) the audited financial statements of the City and updates of certain operating data of the City. In the past five years, the City has not failed to comply in any material respect with any previous continuing disclosure undertakings to provide annual reports or notices of material events pursuant to the Rule except as follows: Since fiscal year 2012, the City has filed its audited financial statements, but, in each year prior to fiscal year 2014, such filings were made more than 180 days after its fiscal year end, without notice of late filing, in contravention of its existing continuing disclosure undertakings. The City failed to timely file certain required operating data for fiscal years 2012 and 2013. The audited financial statements and operating data that were filed were not always cross referenced by CUSIP number to certain outstanding bond issues. -32- The previously omitted operating data updates were filed with the MSRB on May 6, 2014. These materials are available at www.emma.msrb.org. The Continuing Disclosure Agreement contains procedures for notification of the City which are designed to promote compliance with the City's obligations thereunder with respect to the timeliness and content of annual reports that are to be filed. In 2014, the City entered into a five-year engagement with an outside entity, which entity will assist the City in preparing and submitting the City's annual reports on a timely basis to the MSRB, via EMMA. FINANCIAL ADVISOR Columbia Capital Management, LLC, Overland Park, Kansas, has acted as Financial Advisor to the Authority and the City in connection with the sale of the Series 2017 Bonds. The Financial Advisor is a "municipal advisor" as defined in the Dodd -Frank Wall Street Reform and Consumer Protection Act of 2010. The Financial Advisor has assisted the Authority and the City in the preparation of this Official Statement and in other matters relating to the issuance of the Series 2017 Bonds. The Financial Advisor has not, however, independently verified the factual information contained in this Official Statement. The Financial Advisor will not be a manager or a member of any underwriting group submitting a proposal for the purchase of the Series 2017 Bonds. 0 1101 IVAIJ;_ _0 IMC, The Series 2017 Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated, St. Louis, Missouri (the "Underwriter"). The Underwriter has agreed to purchase the Series 2017 Bonds pursuant to a Bond Purchase Agreement, dated the date set forth therein, entered into by and among the Authority, the City and the Underwriter (the `Bond Purchase Agreement"). The Bond Purchase Agreement provides that the Underwriter will purchase the Series 2017 Bonds at a purchase price of $ (representing the principal amount of the Series 2017 Bonds [minus/plus] a net bid [premium/discount] of $ ), minus an Underwriter's discount of $ . In addition, the Bond Purchase Agreement provides, among other things, that the Underwriter will purchase all of the Series 2017 Bonds, if any are purchased. The Underwriter reserves the right to join with dealers and other underwriters in offering the Series 2017 Bonds to the public. The City has agreed in the Bond Purchase Agreement to indemnify the Underwriter against certain liabilities to the extent allowed by law. The obligations of the Underwriter to accept delivery of the Series 2017 Bonds are subject to various conditions contained in the Bond Purchase Agreement. CERTAIN RELATIONSHIPS Gilmore & Bell, P.C. is serving as Bond Counsel and Disclosure Counsel in connection with the issuance of the Series 2017 Bonds. Gilmore & Bell, P.C. also represents the Underwriter as underwriter's counsel from time to time but has not done so in connection with the Series 2017 Bonds. MISCELLANEOUS The references herein to the Act, the TIF Act, the Indenture, the Financing Agreement and the Continuing Disclosure Agreement are brief outlines of certain provisions thereof and do not purport to be complete. For full and complete statements of the provisions thereof, reference is made to the Act, the TIF Act, the Indenture, the Financing Agreement and the Continuing Disclosure Agreement. Copies of such documents are on file at the offices of the Underwriter and following delivery of the Series 2017 Bonds will be on file at the office of the Trustee. -33- The agreement of the Authority with the Owners of the Series 2017 Bonds is fully set forth in the Indenture, and neither any advertisement of the Series 2017 Bonds nor this Official Statement is to be construed as constituting an agreement with the purchasers of the Series 2017 Bonds. Statements made in this Official Statement involving estimates, projections or matters of opinion, whether or not expressly so stated, are intended merely as such and not as representations of fact. The Cover Page hereof and the Appendices hereto are integral parts of this Official Statement and must be read together with all of the foregoing statements. The execution and delivery of this Official Statement has been duly authorized by the City, and its use has been approved by the Authority. CITY OF RIVERSIDE, MISSOURI LE -34- Mayor APPENDIX A INFORMATION CONCERNING THE CITY OF RIVERSIDE, MISSOURI APPENDIX A INFORMATION CONCERNING THE CITY TABLE OF CONTENTS Pa - THE CITY - GENERAL A-4 General......................................................................................................................................................... A-1 FuturePlans.................................................................................................................................................. A-1 Government and Organization.................................................................................................................... A-2 CityOfficials ................................................................................................................................................ A-2 DemographicInformation........................................................................................................................... A-2 EconomicInformation................................................................................................................................. A-3 BuildingPermits.......................................................................................................................................... A-4 EmployeeRelations..................................................................................................................................... A-4 Employee Retirement and Pension Plan ..................................................................................................... A-4 CITY DEBT STRUCTURE Authorityto Incur Debt................................................................................................................................ A-4 General Obligation Indebtedness................................................................................................................ A-5 Long -Term Indebtedness............................................................................................................................. A-5 OverlappingIndebtedness........................................................................................................................... A-5 Series 2006 Levee District Bonds............................................................................................................... A-5 FINANCIAL INFORMATION CONCERNING THE CITY Accounting, Budgeting and Auditing Procedures...................................................................................... A-6 Sourcesof Revenue..................................................................................................................................... A-6 City's Financial Relationship with Argosy Casino..................................................................................... A-6 RetailSales Tax........................................................................................................................................... A-7 CapitalImprovement Expenditures............................................................................................................. A-8 PROPERTY TAX TaxRate....................................................................................................................................................... A-8 PropertyValuations..................................................................................................................................... A-8 APPENDIX A INFORMATION CONCERNING THE CITY THE CITY- GENERAL The following information relating to the City has been furnished by the City for use in this Official Statement. Such information is not guaranteed as to accuracy or completeness by the Underwriter or the Authority and is not to be construed as a representation by the Underwriter or the Authority. Neither the Underwriter nor the Authority has verified this information. No representation is made by the Underwriter or the Authority as to the accuracy of such information or as to the absence of material adverse changes in such information subsequent to the date hereof. General The City of Riverside, Missouri (the "City") is a suburban community located in the southeast corner of Platte County, Missouri. It is approximately seven miles north of downtown Kansas City, Missouri and is considered to be a first ring suburb. Incorporated as a city in 1951, the City, which sits on the banks of the Missouri River, encompasses a land area of approximately six square miles. Although the City has approximately 3,227 residents, its daytime population grows to approximately 10,000 from activity in its growing industrial areas, riverboat casino and school system. Two major events have defined the City's history. In 1994, the Argosy Casino opened in the City. The City has been able to use revenues from the gaming industry to make a variety of capital improvements throughout the City and invest in programs to enhance the quality of life. In 1996, the City leveraged a portion of the gaming revenue to address the impact of flooding on the community by partnering with the Riverside- Quindaro Bend Levee District of Platte County, Missouri (the "Levee District") and the Army Corps of Engineers to construct improvements to the Riverside-Quindaro Bend Levee. The construction and completion of the levee not only helps to protect the City from flooding, but also enabled the development of more than 900 acres of land that was formerly in the flood plain. Future Plans The area protected by the levee project includes in excess of 400 acres of undeveloped land (referred to herein as the "Horizons District.") Development of approximately 30 acres per year in Class A industrial space has been occurring since 2010 and is anticipated to continue until 2020 at a similar pace. At that point, it is anticipated the majority of industrial ground within the Horizons District will be developed. The majority of buildings range in size from approximately 200,000 square feet to almost 500,000 square feet. The current trend is towards larger buildings with cross -dock access. Lease rates range from $4.25 - $4.75 per square foot. On the east side of the park, construction is continuing and a 415,000 square feet building will be completed in 2017 and the City expects a 200,000 square foot building to break ground in 2018. On the west side of the park, the City has completed infrastructure to serve a number of parcels planned for industrial development. Recent projects have included two smaller (14,000 and 30,000 square feet) buildings and a 245,000 square foot building. A-1 Government and Organization The City is a municipal corporation and city of the fourth class, organized and existing under the laws of the State of Missouri, including particularly Chapter 79 of the Revised Statutes of Missouri, as amended. The City was incorporated in 1951. The Board of Aldermen appoints the City Administrator who serves as chief administrative officer responsible for directing the operations of the City in accordance with the policies set forth by the Board of Aldermen. The Board of Aldermen consists of seven members, two elected from each of the City's three wards, plus a mayor who is elected at -large every two years. Three members of the Board of Aldermen are elected every other year for two-year terms. City Officials The current elected officials of the City are: Expiration of Name Position Term of Office Kathleen Rose Mayor 4/18 Al Bowman Alderman 4/19 Art Homer Alderman 4/18 Salvatore LoPorto Alderman 4/19 Chet Pruett Alderman 4/18 Ron Super Alderman 4/18 Aaron Thatcher Alderman 4/19 Greg Mills serves as City Administrator, Donna Oliver serves as Finance Director and Robin Kincaid serves as City Clerk. Demographic Information Municipal Utilities and Services. Water services for the City are provided by Missouri American Water Company. The City has entered into an agreement with the City of Kansas City, Missouri for sanitary sewer service. Electric service is provided to the City by Kansas City Power and Light Company. Natural gas service is provided by Missouri Gas Energy. Transportation Facilities. The City has a strong regional transportation network that serves as an asset to the City's residents and its ability to attract interest from a variety of potential employers and retailers. With proximity to Interstate 635, Interstate 29, Missouri Highway 9, Missouri Highway 69 and Missouri Highway 169, the City's location to transportation facilities is superb. Educational Institutions and Facilities. The City is served by Park Hill School District of Platte County, Missouri, which is accredited by the Missouri Department of Elementary and Secondary Education. The District has 12 elementary schools, 3 middle schools, and 2 high schools, with a total enrollment in excess of 10,921 students. City residents have easy access to the Kansas City metropolitan area's colleges and universities, and numerous technical schools. Medical and Health Facilities. There are a wide variety of doctors, dentists, ophthalmologists and specialists available in Kansas City and the surrounding area. North Kansas City Hospital, a 451 -bed facility with over 550 physicians on staff, and St. Luke's Northland Hospital — Barry Road location, a 95 -bed facility with over 459 physicians on staff, are located within 7 miles of the City. A-2 Population. The following table provides the current and historic population figures for the City: Year Population 2016* 3,227 2010 2,937 2000 2,979 1990 3,010 1980 3,206 1970 2,123 *Source: U.S. Census Bureau, American Fact Finder — As of July 1, 2016. Housing. The following table provides the median value of owner -occupied housing units in the City, Platte County and the State of Missouri: City $185,300 Platte County 190,300 State of Missouri 138,400 Source: U.S. Census Bureau, 2011-2015 American Community Survey 5 -year estimates. Income Statistics. The following table sets forth income statistics for the City, Platte County and the State of Missouri: Income Status (in 2014 inflation-adiusted dollars) Per Capita Median Family City $24,192 $39,527 Platte County 35,666 84,309 State of Missouri 22,875 60,809 Source: U.S. Census Bureau, 2011-2015 American Community Survey 5 -year estimates. Economic Information Commerce, Industry and Employment. The City's location in the Kansas City metropolitan area offers its citizens a wide range of employment opportunities. The following table indicates the major employers within the City. All of these employers except Park Hill School District are located within the TIF District. Maior Employers Product/Service Employees Argosy Casino Entertainment 797 Adient/Hoover Universal Automotive Supplier 776 Yanfeng USA Automotive Supplier 456 Martinrea Riverside Automotive Supplier 347 U.S. Farathane Automotive Supplier 323 ABC Employment Holdings Employment Services 277 Capital Electric Electrical Contracting 232 Woodbridge Automotive Supplier 167 Park Hill School District Public Education 160 Premium Waters Bottled Water Manufacturer 151 Source: City. A-3 Labor Statistics Source: Missouri Economic Research and Information Center. *Average, January through August 2017. Building Permits The following table shows the number, type and estimated construction costs of building permits issued by the City during the last three fiscal years for new construction only. 2016 2015 2014 Source: City. Employee Relations Residential Construction No. of Permits Value 43 $11,147,080 27 7,443,180 26 5,275,773 Commercial Construction No. of Permits Value 3 $8,435,630 3 26,521,533 2 14,324,667 The City employs 100 employees. The Fire Department has 16 employees of which 12 are covered by a wage and work agreement between the City and IAFF42. The City considers its relations with its employees to be excellent. Employee Retirement and Pension Plan The City participates in the Missouri Local Government Employees Retirement System (LAGERS) an agent multiple -employer, state wide plan covering substantially all of its employees. The City has a legal obligation to make all required contributions to this plan. For further information see "Note 8 — Other Information, Section B. Retirement Plan —LAGERS" in Appendix B to this Official Statement. CITY DEBT STRUCTURE Authority to Incur Debt Article VI, Sections 26(b) and (c) of the Constitution of the State of Missouri limit the net outstanding amount of authorized general obligation bonds for a city to 10 percent of the assessed valuation of the city. Article VI, Section 26(d) provides that a city may, by a two-thirds (four -sevenths at certain elections) vote of the qualified voters, incur indebtedness in an amount not to exceed an additional 10 percent for the purpose of acquiring rights-of-way, construction, extending and improving streets and avenues, and sanitary or storm sewer systems, provided the total general obligation indebtedness of a city does not exceed 20 percent of the assessed valuation. Article VI, Section 26(e) provides that a city may, by a two-thirds (four -sevenths at certain elections) A-4 2017 2016 2015 2014 2013 2012 Platte County Civilian labor force 56,853 56,662 54,804 54,335 52,590 52,339 Unemployed 2,004 2,049 2,337 2,746 2,977 2,897 Unemployment rate 3.5% 3.6% 4.2% 5.1% 5.7% 5.5% State of Missouri Civilian labor force 3,072,253 3,111,517 3,096,378 3,059,067 3,022,513 3,025,309 Unemployed 128,397 140,815 144,857 186,699 201,751 210,034 Unemployment rate 4.2% 4.5% 5.0% 6.1% 6.7% 6.9% Source: Missouri Economic Research and Information Center. *Average, January through August 2017. Building Permits The following table shows the number, type and estimated construction costs of building permits issued by the City during the last three fiscal years for new construction only. 2016 2015 2014 Source: City. Employee Relations Residential Construction No. of Permits Value 43 $11,147,080 27 7,443,180 26 5,275,773 Commercial Construction No. of Permits Value 3 $8,435,630 3 26,521,533 2 14,324,667 The City employs 100 employees. The Fire Department has 16 employees of which 12 are covered by a wage and work agreement between the City and IAFF42. The City considers its relations with its employees to be excellent. Employee Retirement and Pension Plan The City participates in the Missouri Local Government Employees Retirement System (LAGERS) an agent multiple -employer, state wide plan covering substantially all of its employees. The City has a legal obligation to make all required contributions to this plan. For further information see "Note 8 — Other Information, Section B. Retirement Plan —LAGERS" in Appendix B to this Official Statement. CITY DEBT STRUCTURE Authority to Incur Debt Article VI, Sections 26(b) and (c) of the Constitution of the State of Missouri limit the net outstanding amount of authorized general obligation bonds for a city to 10 percent of the assessed valuation of the city. Article VI, Section 26(d) provides that a city may, by a two-thirds (four -sevenths at certain elections) vote of the qualified voters, incur indebtedness in an amount not to exceed an additional 10 percent for the purpose of acquiring rights-of-way, construction, extending and improving streets and avenues, and sanitary or storm sewer systems, provided the total general obligation indebtedness of a city does not exceed 20 percent of the assessed valuation. Article VI, Section 26(e) provides that a city may, by a two-thirds (four -sevenths at certain elections) A-4 vote of the qualified voters, incur indebtedness in an amount not to exceed an additional 10 percent for the purpose of purchasing or constructing waterworks, electric or other light plants to be owned exclusively by the city, provided the total general obligation indebtedness of a city does not exceed 20 percent of the assessed valuation. The legal debt margin of the City for Fiscal Year 2017 is: Constitutional Debt Limit (20% of assessed valuation) $24,269,948 Indebtedness Outstanding 0 LEGAL DEBT MARGIN $ 4.2 General Obligation Indebtedness The City has no outstanding general obligation indebtedness. The City has never in its history defaulted on the payment of any of its debt obligations. Long -Term Indebtedness Revenue Bonds. The following table sets forth the outstanding revenue obligations of the City as of October 1, 2017, which includes the Bonds being refunded in connection with this financing: Category of Obligation Tax Increment Revenue Bonds Tax Increment Revenue Bonds Tax Increment Revenue Bonds Tax Increment Revenue Bonds Overlapping Indebtedness Fiscal Year Amount Issued Outstanding 2014 $4,010,000 2011 645,000 2007A 15,295,000 2007B 4,370,000 68,600,922 $24,320,000 The following table sets forth overlapping indebtedness of political subdivisions with boundaries overlapping the City as of June 30, 2017, and the percent attributable (on the basis of assessed valuation) to the City: Taxing Jurisdiction Platte County Park Hill School District Total Source: CYty. Series 2017 Levee District Bonds Outstanding Percent Net Debt General Obligation Applicable Applicable Indebtedness to City to City $39,010,370 4.7% $1,842,340 68,600,922 7.1 4,859,564 $107,611,292 $6,701,904 In 2017, the Riverside-Quindaro Bend Levee District of Platte County, Missouri (the "Levee District') issued its Levee District Improvement Refunding Revenue Bonds (L-385 Project), Series 2017 (the "Levee District Bonds") in the aggregate principal amount of $12,620,000, which are special obligations of the Levee District payable as to both principal and interest out of the proceeds of the levee taxes levied upon the lands situated within the territorial limits of the Levee District adjudicated to be benefited by the Levee Project, including the levee taxes levied on the benefited property owned by the City. The City is currently the largest landowner of benefited property within the Levee District and will be the largest payer of assessments until it sells or otherwise transfers its property. Subject to appropriation for such purpose, the City has also agreed to A-5 replenish deficiencies in the debt service reserve fund for the Levee District Bonds in an amount sufficient to restore the debt service reserve fund to the debt service reserve fund requirement, provided that the total cumulative aggregate amount so contributed by the City shall not $1,400,000. In addition, the City intends to contribute, subject to annual appropriation, certain tax increment revenue financing funds to pay a portion of the debt service on the Levee District Bonds. The City, the Levee District, Platte County, Missouri and UMB Bank, N.A., as trustee, have entered into a Cooperation Agreement setting forth these agreements. FINANCIAL INFORMATION CONCERNING THE CITY Accounting, Budgeting and Auditing Procedures The City begins its budgeting and appropriation process in April of each year for the following fiscal year beginning July 1. The procedure begins with a series of meetings between the City staff members and the Board of Aldermen. The budgets are presented formally by the City Administrator to the Board of Aldermen in May and are incorporated in an appropriation resolution adopted no later than June 30. The accounts of the City are organized on the basis of funds, each of which is considered to be a separate accounting entity. The operation of each fund is accounted for with a separate set of self -balancing accounts that comprise its assets, liabilities, fund equities, revenues and expenditures or expenses. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped by type in the general purpose financial statements. The City's auditor of the Fiscal Year 2016 financial statements was RSM US LLP, Certified Public Accountants, Kansas City, Missouri. Sources of Revenue The City finances its general operations through the following taxes and other miscellaneous sources as indicated below for the 2017 fiscal year (unaudited): Source Percent Taxes 11.79% Intergovernmental 1.47 Charges for services 5.53 Investment earnings 0.36 Real estate income — gaming 19.04 Gaming 28.78 Licenses and fees 0.95 Fines and forfeitures 1.10 Recreation fees 0.31 Miscellaneous 0.49 TIF Revenue 30.19 Source: City. City's Financial Relationship with Argosy Casino The City and Missouri Gaming Company ("Argosy") entered into a contract dated June 7, 1993, pursuant to which the City leased to Argosy a 2.244 acre tract of land ("Original Lease"). The Original Lease has been amended and supplemented pursuant to eight amendments over the years (the Original Lease, as amended and supplemented, the "Lease"). The land leased to Argosy under the Lease constitutes a small portion of the overall Argosy gaming site. r:W61 Pursuant to the terms of the Lease, the Lease is automatically renewed for six successive additional five year terms, unless Argosy provides the City with written notice of termination at least six months prior to such termination. Under the Lease, the consideration for the current term and each renewal term is percentage rent as follows: 3% of first $50,000,000 of Adjusted Gross Receipts 4% of Adjusted Gross Receipts between $50 and $100 Million 1.5% of Adjusted Gross Receipts in excess of $100,000,000 The Lease expires in fiscal year 2020, with five remaining five-year options to extend the term of the Lease. The amount of revenue from the Lease recorded on the statement of revenues, expenditures and changes in fund balance in the General Fund for the fiscal year ended June 30, 2016 is $4,394,870. In addition, the City receives a portion of the gaming tax and admission fees that Argosy is required to collect and remit to the state under Missouri law. The City's receipts for the last five years in connection with Argosy's casino operation in the City from gaming tax, admission fees, and lease revenues are set forth in the table below: June 30 Total City Total Gaming Percentage of City Fiscal Cash Related Receipts Related Year End Receipts City Receipts to Gaming 2017 $23,711,462 $10,947,642 46.17% 2016 22,866,761 10,964,436 47.95% 2015 21,164,122 10,485,419 49.54 2014 20,581,199 10,460,145 50.82 2013 24,179,143 11,288,456 46.69 Source: City. Retail Sales Tax The following table shows the retail sales tax collections for the City for the last five fiscal years: `Unaudited, Source: City. 1% General Fiscal Year Sales Tax 2017 $1,611,237' 2016 1,697,356 2015 1,378,151 2014 1,445,549 2013 1,397,363 A-7 Capital Improvement Expenditures The following table shows the amount spent by the City on capital improvements in the last six fiscal years and the estimated amount the City anticipates spending in the next six fiscal years: Fiscal Year Amount 2022 $1,650,000` 2021 3,660,000 2020 2,775,000* 2019 4,115,000* 2018 2,050,000* 2017 2,630,000* 2016 2,386,294 2015 4,455,505 2014 7,808,465 2013 16,861,669 2012 14,402,799 2011 21,080,414 2010 18,661,494 'Estimated; Source: City. The following table shows the amount the City anticipates spending on capital improvement projects in the next five fiscal years, by category: Fiscal Year Total horizons -related Non -Horizons Facility/Park Equipment/ Infrastructure Improvements Software 2022 $ 1,650,000* $ 750,000 $ 750,000 $ 150,000 $ - 2021 3,660,000* 2,050,000 1,050,000 150,000 410,000 2020 2,775,000* 750,000 1,050,000 150,000 825,000 2019 4,115,000* 750,000 1,150,000 150,000 2,065,000 2018 2,505,000* 1,400,000 823,000 282,000 - TOTAL $14,705,000 $ 5,700,000 $ 4,823,000 $ 882,000 $ 3,300,000 * Estimated; Source: City. PROPERTY TAX Tax Rate The City does not currently levy a property tax. Property Valuations Assessment Procedure. All taxable real and personal property within the City is assessed annually by the County Assessor of Platte County, Missouri. Missouri law requires that personal property be assessed at 33 1/3% of appraised value and the real property be assessed at the following percentages of appraised value: Residential real property 19% Agricultural and horticultural real property 12% Utility, industrial, commercial, railroad and all other real property 32% A-8 A general reassessment of real property occurred statewide in 1985. In order to maintain equalized assessed valuations following this reassessment, the state legislature adopted a maintenance law in 1986. Beginning January 1, 1987, and every odd -numbered year thereafter, the County Assessor must adjust the assessed valuation of all real property located within the county in accordance with a two-year assessment and equalization maintenance plan approved by the State Tax Commission. The County Assessor is responsible for preparing the tax roll each year and for submitting the tax roll to the Board of Equalization. The County Board of Equalization has the authority to adjust and equalize the values of individual properties appearing on the tax rolls. Current Assessed Valuation. The following table shows the total assessed valuation, by category, of all taxable tangible property situated in the City according to the July 28, 2017 (post -board of equalization) assessment: Source: Platte County, Missouri. *Assumes all personal property is assessed at 33 1/3%; because certain subclasses of tangible personal property are assessed at less than 33 1/3%, the estimated actual valuation for personal property would likely be greater than that shown above. History of Property Valuation. The total assessed valuation of all taxable tangible property situated in the City according to the assessments as of December 31 in each of the following years, has been as follows: Year Assessed Valuation 2016 Assessed Assessment Estimated Actual 2014 Valuation Rate Valuation Real Estate: 83,251,909 Residential $30,612,375 19% $161,117,763 Commercial 39,356,279 32 122,988,372 Agricultural 13,088 12 109,067 Railroad & Utility 18,612 32 58,163 Sub -Total $70,000,354 $284,273,364 Personal Property 51,349,390 154,063,576 Total $121,349,744 $438,336,941 Source: Platte County, Missouri. *Assumes all personal property is assessed at 33 1/3%; because certain subclasses of tangible personal property are assessed at less than 33 1/3%, the estimated actual valuation for personal property would likely be greater than that shown above. History of Property Valuation. The total assessed valuation of all taxable tangible property situated in the City according to the assessments as of December 31 in each of the following years, has been as follows: Year Assessed Valuation 2016 $121,349,744 2015 91,881,566 2014 87,015,214 2013 86,227,792 2012 83,251,909 Source: Platte County, Missouri. A-9 Assessed Value. According to the records of the City as of October 1, 2017, the following are the largest (in assessed value) landowners within the City and the 2017 assessed value of their land. As described above under "Assessment Procedure, " the requisite assessment rate for each class of property is applied to such property's appraised value in order to determine the assessed value of that property. Source: City. Landowner 2017 Assessed Value Argosy Gaming Co. $34,744,602 Yanfeng 8,043,753 Horizons Industrial V 6,997,440 Perg Riverside LLC 5,862,888 Premium Waters 5,184,000 Horizons Industrial IV 4,803,200 BABRA, LLC 3,633,042 Horizons Industrial III 3,500,800 Horizons Industrial I 3,000,320 Horizons Industrial II 2,658,240 r:M[f, APPENDIX B FINANCIAL STATEMENTS OF THE CITY FOR THE YEAR ENDED JUNE 30, 2016 (THIS PAGE LEFT BLANK INTENTIONALLY) comprehensive Annual Fin nancl \ City of Riverside, Missouri Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2016 Prepared by Finance Department Donna Oliver, Finance Director City of Riverside, Missouri Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2016 Table of Contents Financial Section Independent auditor's report Page Management's discussion and analysis Number Introductory Section 24 Table of contents 1 Letter of transmittal 3 Organizational chart 6 Principal officials 7 GFOA certificate of achievement 8 Financial Section Independent auditor's report 9 Management's discussion and analysis 11 Basic financial statements: 24 Government -wide financial statements Statement of net position 21 Statement of activities 22 Fund financial statements 26 Balance sheet — governmental funds 23 Reconciliation of the governmental fund balances to the net position of governmental activities 24 Statement of revenues, expenditures and changes in fund balance - governmental funds 25 Reconciliation of the statement of revenues, expenditures and changes in fund balances of governmental funds to the statement of activities 26 Statement of revenues, expenditures and changes in fund balances - general fund — budget to actual 27 Statement of assets and liabilities — agency fund 28 Notes to basic financial statements 30 Required supplemental information: Schedules of funding progress other post employment benefit Plan 54 Schedule of changes in net pension liability and related ratios 55 Schedule of contributions 56 Supplementary information: Nonmajor governmental funds: Combining balance sheet 57 Combining statement of revenues, expenditures and changes in fund balance 59 Combining schedule of revenues, expenditures and changes in fund balances, nonmajor special revenue funds, budget to actual 61 Combining schedule of revenues, expenditures and changes in fund balances, capital project funds, budget to actual 62 Schedule of revenues, expenditures and changes in fund balances, tax increment financing debt service fund, budget to actual 64 Statement of changes in assets and liabilities, agency fund 65 Statistical Section (unaudited) Statistical section contents 66 Net position 67 Changes in net position 69 Fund balances, governmental funds 71 Changes in fund balances, governmental funds 73 Tax revenues by source 75 Direct and overlapping sales tax rates 76 Gaming revenue and real estate income 77 Gaming revenue rates 77 Riverside Argosy Casino Kansas City market share 78 Ratios of outstanding debt 79 Direct and overlapping debt 80 Pledged -revenue coverage 81 Demographic and economic statistics 82 Principal employers 83 Full-time equivalent city government employees by function 84 Operating indicators by function/program 85 Capital asset statistics by function/program 86 2 December 12, 2016 To the Honorable Mayor, Board of Aldermen and Citizens of the City of Riverside: This document is the Comprehensive Annual Financial Report (CAFR) for the City Riverside for the fiscal year ended June 30, 2016. The CAFR was prepared by the City' Finance Division in close cooperation with the external auditor, RSM US LLP. Management assumes full responsibility for the completeness and reliability of th information contained in this report, based upon a comprehensive framework #f inte control that is has established for this purpose. Because the cost of internal control should exceed the anticipated benefits, the objective is to provide reasonable, rather than absol assurance that the financial statements are free of any material misstatements. RSM US LLP, have issued an unmodified ("clearo opinion on the City of Riverside' financial statements for the year ended June 30, 2016. The independent auditor's report located at the front of the financial section of this report. Management's discussion and analysis (MD&A) immediately follows the independ auditor's report and provides a narrative introduction, overview and analysis of the basi financial statements. MD&A complement this letter of transmittal and should be read i conjunction with it. I the northern sector of the Kansas City metropolitan area. It currently occupies 5.87 squar, m iles and serves an estimated population of 3,180. i The City of Riverside was incorporated in 1951 and is governed by a Mayor -Board Aldermen -City Administrator form of government. The Mayor and the 6 Board of Alderme members are elected on an at large basis and serve two- year staggered terms. The Board Aldermen appoints the City Administrator who serves as the chief administrative officer the City. 19 The City of Riverside provides a full range of services including police and fire protection, traffic regulation and municipal court service, construction and maintenance of City streets and bridges, and recreational activities. The financing of infrastructure projects in the L-385 Tax Increment Financing District is provided through two legally separate entities. The Tax Increment Financing Commission and the Riverside Industrial Development Authority, which function, in essence, as departments of the City of Riverside have been included as an integral part of the City of Riverside's financial statements. The Board of Aldermen is required to adopt a final budget by no later than the close of the fiscal year. This annual budget serves as the foundation for the City of Riverside's financial planning and control. The budget is prepared by fund (e.g., General Fund), department (e.g., public safety) and cost center (e.g., police services). Department heads may transfer resources within a department. Transfers between departments, however, need special approval from the Board of Aldermen. Local economy The City of Riverside is located strategically between the Kansas City International Airport and downtown Kansas City. Two interstate highways (I-29 and I-635) and one state highway (9) serve the community. The Kansas City Area Transportation Authority, which operates a metropolitan -wide bus system, provides frequent, low cost service to Riverside. With total governmental fund type revenue of $22.9 million in fiscal 2016, use of which is prudently allocated by the City Council, the City provides many services not available elsewhere, such as one police officer for every 120 residents, refuse collections weekly for residential property at no charge, and a 75% subsidy on all resident community center memberships. Relevant financial policies Cash Management Policies and Practices — The City pools idle cash from all funds for the purpose of increasing income through investment activities. Cash, temporarily idle during the year, was invested in certificates of deposit, federal agencies and MOSIP. The maturities of the investments generally range from thirty days to two years, with the average maturity being eighteen months. The City's investment policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, 100% of City deposits were either insured by federal depository insurance or collateralized. All collateral on deposits was held by either the City's agent or a financial institution's trust department in the City's name. Risk Management — The City is provided property, casualty and liability insurance coverage by MOPERM and worker's compensation coverage by Mid -American Regional Council Insurance Trust. Both entities are not-for-profit corporations consisting of governmental entities formed to acquire insurance for its members. The City utilizes all risk control procedures and training made available by these entities. Major initiatives The City of Riverside continues to see significant interest in development projects throughout the community. In support of these projects, the City is moving ahead with infrastructure improvements designed to support the ultimate build -out. These projects both help to attract new growth and better serve our current citizens and businesses. 4 Awards and Acknowledgements The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Riverside for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2015. This was the tenth year that the government has received this prestigious award. In order to be awarded a Certificate of Achievement, the government had to publish an easily readable and efficiently organized CAFR that satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement's Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated service of the entire staff of the finance department and the assistance of other departments. We wish to express our appreciation to all members of the departments who assisted and contributed to the preparation of this report. Credit also must be given to the mayor and the board of aldermen for their unfailing support for maintaining the highest standards of professionalism in the management of the City of Riverside's finances. Respectfully submitted, Donna Oliver Finance Director Boards and Commissions City of Riverside, Missouri Organizational Chart For the Year Ended June 30, 2016 Citizens of Riverside Kathleen Rose, Mayor and Board ofAldermen Greg Mils City Administrator & Public Safetv Director C Mark Ferguson Municipal Court Judee Tom Wooddell Public Works Director Michael Duffy Donna Oliver Finance Director Robin Littrell City Clerk Travis Hoover City of Riverside, Missouri Principal Officers June 30, 2016 Elected Officials Mayor Alderman, Ward 3 Alderman, Ward 2 Alderman, Ward 1 Alderman, Ward 3 Alderman, Ward 1 Alderman, Ward 2 Appointed Officials City Administrator/Director of Public Safety City Clerk Finance Director Municipal Court Judge Community Development Director Public Works Director Capital Projects Engineer 7 Kathleen Rose Frank Biondo Chet Pruett Al Bowman Art Homer Ron Super Aaron Thatcher Greg Mills Robin Littrell Donna Oliver Mark Ferguson Michael Duffy Tom Wooddell Travis Hoover uJ Government Finance Officers Association Certificate of Achievement for Excellence in Financial escnted to City of Riverside Alissouri For its Comprehensive dual Financial ftepci.-t for the Fiscal Year Ended June 3►0, 2015 Executive Director/CE0 i independent Auditoes Report RSM US LLP To the Honorable Mayor and 46 W#PW-. 1W wal 11-A, f. 14*. - City of Riverside, Missouri Riverside, Missouri Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Riverside, Missouri (the City), as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the desian im ementation and maintenance of internal control relevant to the �garation and fair presentation of W (ACITA114:241 i _ _ 1111r110"rUW1r_1 r� IV; I VA I VIZA I M I In Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements, The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those RM M presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects� the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Riverside, Missouri, as of June 30, 2016, and the respective changes in financial position, thereof and the respective budgetary comparision for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. THE POWER OF BEING UNDERSTOOD ALTDil'! TAX I CONSULI �NG 9 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages 11 through 19, the OPEB schedule of funding progress on page 54 and the pension information on pages 55 and 56 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Riverside, Missouri's basic financial statements. The combining and individual nonmajor fund financial statements and other schedules, listed in the table of contents as supplementary information, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole. The accompanying introductory, statistical sections and other schedules, as listed in the table of contents have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. AS* vs ZAP Kansas City, Missouri December 12, 2016 iN CITY OF RIVERSIDE, MISSOURI 2950 N.W. Vivion Road Riverside, MO 64150 Management's Discussion and Anal Our discussion and analysis of the City of Riverside's (the City) financial performance provides an overview of the City's financial activities for the fiscal year ended June 30, 2016. Please read it in conjunction with the City's letter of transmittal and the financial statements that begin on page 21. FINANCIAL HIGHLIGHTS • The City's net position at end of the fiscal year was $100,574,780. Of this amount, ($92,040) is unrestricted net position (deficit) and may be used to meet the government's ongoing obligations to citizens and creditors. • The total net position of the City increased by 6.3% or $5,989,879. Analysis is included in the overview of the financial statements. • As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $17,143,844 an increase of $3,754,578 over the previous year. Approximately $5,953,625 of this amount is available for spending at the government's discretion. • The unassigned fund balance for the General Fund was $5,953,625 compared to $9,277,572 in general fund expenditures. • The City of Riverside total debt (excluding compensated absences) decreased by ($3,870,826) or (12%). OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Report Components This annual report consists of five parts as follows: Government -wide financial statements: The government -wide financial statements report information about the City as a whole using accounting methods similar to those used by private -sector companies. The statement of net position includes all of the City's assets and liabilities and deferred inflows and outflows. All of the current year's revenues and expenses are reported in the statement of activities regardless of when cash is received or paid. The two government -wide statements report the City's net position and how it has changed. Net position — the difference between the City's assets and deferred outflows of resources and liabilities and deferred inflows of resources -is one way to measure the City's overall financial health or position. Over time, increases or decreases in net position can be monitored to determine whether the City's financial position is improving or deteriorating. The government -wide financial statements report functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from those that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City include general administration, public safety, public works and parks and recreation. The City does not engage in business -type activities. Fund Financial Statements: A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure compliance with finance -related legal requirements. The City utilizes two types of funds: governmental and fiduciary. Governmental Funds: Governmental funds are used to account for essentially the same functions as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, the reader may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. 12 The basic governmental fund financial statements can be found on pages 23-27 of this report. Fiduciary Funds: Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City's own programs. The basic fiduciary fund financial statements can be found on page 28 of this report. Notes to the Financial Statements: The notes to the financial statements are an integral part of the government -wide and fund financial statements and provide expanded explanation and detail regarding the information reported in the statements. The notes to basic financial statements can be found on pages 30-53 of this report. Other Information: The combining statements referred to earlier in connection with nonmajor funds and combining and individual fund statements and schedules can be found on pages 57-61 of this report. Government -Wide Financial Analysis As noted earlier, net position may serve over time as one useful indicator of a government's financial condition. In the case of the City of Riverside, the net position increased by $5,989,879. Following is a condensed version of the government -wide statement of net position comparing fiscal year 2016 and 2015. City of Riverside Net Position Current and other assets Capital assets Total assets Deferred outflows of resources Long-term liabilities outstanding Other liabilities Total liabilities Deferred inflows of resources Net position Net investment in capital assets Restricted Unrestricted Total net position 13 2016 $ 18,517,083 118,688,115 137,205,198 2015 (as restated) $ 16,229,396 120,229,106 136,458,502 1,680,657 967,329 34,704,523 908,215 35,612,738 36,947,467 2,117,925 39,065,392 2,698,337 3,775,538 96,108,750 4,558,070 (92,040) $100,574,780 95,152,969 1,369,477 (1,937,545) $ 94,584,901 The total net position of the City increased by $5,989,879. All components of net position increased during the year. Invested in capital assets (e.g., land, buildings, machinery and equipment), restricted as to the purpose which it can be used, and unrestricted increased by $955,781, $3,188,593 and $1,845,505, respectively. City of Riverside Changes in Net Position Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Sales tax Other taxes Grants and contributions not restricted for specific programs Tax increment financing revenue Gaming revenue Real estate income — gaming Investment earnings Gain on land lease Other Total revenues Expenses: Administrative and support Municipal court Public safety Public works Parks and recreation Community dev. & engineering Interest on long-term debt Total expenses Increase in net position 2016 $ 899,930 25,742 847,362 1,697,356 1,030,965 348,521 6,654,901 6,569,566 4,394,870 87,952 1,300,452 141,443 23,999,060 3,552,846 173,961 5,554,772 5,598,064 779,143 684,005 1,666,390 18,009,181 $5,989,879 2015 (as restated) % Change $ 778,891 13,822 46,767 1,378,151 900,804 371,948 5,123,842 6,303,001 4,182,418 89,580 1,094,726 111,632 20,395,582 3,536,140 178,317 5,155,608 5,191,014 745,998 644,951 1,982,428 17,434,456 $2,961,126 16% 86% 1712% 23% 14% (6%) 30% 4% 5% (2%) 19% 27% 18% 0% (5%) 4% 7% 4% 2% (16%) 2% Charges for services increased this year due to a contribution from a private entity for expenses within the Horizons business park and from developer contributed infrastructure. Operating grants and contributions increased due to the receipt of more grants for police services. 14 In fiscal year 2016, capital grants and contributions increased due to funding from a developer for infrastructure within the Horizons Business Park. Sales taxes increased by 23% due to the addition of several businesses, increased sales and an increase in utility rates. Tax increment financing revenues increased by $1,531,059 or 30% due to the construction new buildings and creation of new jobs within the Horizons business park. Gain on land lease increased by 19%. Due to the development within the Horizons busins park, the City entered into multiple sales -type agreements with private businesses which h resul ted in recognition of gains on land leases. I Beginning Year Ending Year Current Year Gain Prior Year Gain owl] 00,452 1,094,726 Due to the reduction of outstanding long to debt, interest on long-term debt decreased by (36)%. 1M. OEM TMIT, TIT17"FEW MM M MiGaming-Regaular MGam ing-LandLease OTIFRevenue UTaxes 00ther M 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 ril UNTMIM Admin. Mun. Pub. Safety Pub. Parks & Com. Dev. Interest on Court or Rec long-term debt in Expenses 0 Program Revenues Financial Analysis of the Government's Funds As noted earlier, the City of Riverside uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds- The focus of the City of Riverside's governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City of Riverside's financing requirements. In (i articular, unreserved fund balance may serve as a useful measure of a government's ner resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of Riverside's governmental funds reported combined ending fund balances of $17,143,844 an increase of $3,754,578 in comparison with the prior year. Approximately 35% or $5,953,625 constitutes unassigned fund balance, which is available for spending at the government's discretion. The remainder of fund balance is restricted to indicate that it is not available for new spending because it has already been committed to pay debt service ($6,331,575), to construct capital improvements ($3,562,686) to community development ($393,379), for law enforcement ($140,459) and for tourism ($461,546). The gene—ra.F-fu-n-Tl-s-Tffe—cfi-i-eT-jp—erating tund 0.. ffe_Uijy�o -verside. At the end of the current fiscal year, the fund balance of the general fund was $5,953,625. As a measure of the general fund's liquidity, it may be useful to compare fund balance to total fund expenditures. Fund balance represents 64% of total general fund expenditures. 11 1 110 _i F IM The fund balance of the capital improvement fund increased by $3,018,189 due to reduced expenditures within the Horizons business park and increased gaming revenue. The fund balance of the TIF debt service fund increased by $137,922 due to additional TIF revenues that were received but not yet expended. General Fund Budgetary Highlights General Fund Revenues: Overall actual general fund revenues of $7,789,020 were higher than budgeted revenues of $6,938,954 by $850,066 or 12.3%. Some elements of this difference are the following: License and fees were (117.1%) higher than budgeted due to increased construction activity and building permits. Fines and forfeitures were under budget by (28.5%) due to decreased municipal court fines. In August 2015, the Missouri State legislature put into place regulations limiting court fines. Sales taxes were over budget by 20.0% due to the addition of several businesses, increased sales and an increase in utility rates. Franchise taxes were over budget by 15.0% due to an increase in utility rates. Real estate income from gaming increased 9.9% or $394,870 due to increased revenues at the Argosy Casino. See note 6 for an explanation on how this revenue is calculated. General Fund Expenditures: The legally adopted budget for the General Fund was not amended by the Board of Aldermen during the current fiscal year. In the general government department, the elected officials division actual expenditures were 36.1% under budget as a result of fewer than anticipated meetings. In the public safety department, the public safety administration division actual expenditures were under budget by 19.7% due to lower than expected fuel costs and equipment maintenance. In the public works department, the public works division actual expenditures were under budget by 11.6% due to seasonal employee vacancies and lower than anticipated maintenance expenditures. The building maintenance division actual expenditures were under budget due to reduced custodial costs and lower than anticipated maintenance expenditures. In the parks and recreation department, the parks division was under budget by 34.1% due to lower than anticipated costs for right of way irrigation. The irrigation in Horizons was not completed as was planned during the budget. The community center department was 12.3% over budget due to increased citizen participation in the healthy citizen initiative. 17 Capital Assets The City of Riverside's investment in capital assets as of June 30, 2016, amounts to $118,688,115, (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements, machinery and equipment, park facilities, roads, highways and bridges. City of Riverside Capital Assets, (Net of Depreciation) Land Buildings Improvements Machinery and Equipment Infrastructure Construction in Progress Total 2016 $ 20,316,763 14,403,639 3,566,316 1,182,481 75,355,916 3,863,000 $118,688,115 2015 $ 20,450,715 14,787,596 3,646,401 1,503,987 74,629,148 5,211,259 $120,229,106 Additional information on the City of Riverside's capital assets can be found in Note 3 of this report. Long-term Debt At the end of the current fiscal year, the City of Riverside had $28,395,000 in outstanding tax increment financing debt which is secured by tax increment financing revenues generated. City of Riverside Outstanding Debt 2016 2015 Tax Increment Financing Bonds $28,395,000 $32,170,000 The City of Riverside's total debt decreased by ($3,775,000) or (11.7%) during the current fiscal year. Additional information on the City of Riverside's long-term debt can be found in Note 5 on page 43 of this report. Economic Factors and Next Year's Budgets and Rates • The City of Riverside updated the compensation plan by 2.0 percent for the pay for performance plan. • The unemployment rate for Platte County, which includes the City of Riverside, is currently 4.6% which is a slight decrease from a rate of 4.7% a year ago. In comparison, the state's unemployment rate was 4.5% and the national rate was 4.9%. 18 All of these factors were considered in preparing the City of Riverside's budget for the 2017 fiscal year. Requests and Information This financial report is designed to provide a general overview of the City of Riverside's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report should be addressed to the Finance Director at 2950 N.W. Vivion Road, Riverside, Missouri, 816-741-3993. 19 BASIC FINANCIAL STATEMENTS 20 City of Riverside, Missouri Statement of Net Position June 30, 2016 Net Position: Governmental Net investment in capital assets Activities Assets: Current assets: 3,562,686 Cash and investments $ 10,536,763 Taxes receivable 548,782 Due from other governments 504 Interest receivable 24,176 Gaming receivable 600,662 Other receivable 13,570 Total current assets 11,724,457 Noncurrent assets: Restricted cash and investments 6,792,626 Capital assets not being depreciated: Land 20,316,763 Construction in progress 3,863,000 Capital assets being depreciated: Buildings 19,026,865 Land improvements 4,078,591 Equipment 5,908,537 Infrastructure 90,036,959 Accumulated depreciation (24,542,600) Total noncurrent assets 125,480,741 Total assets 137,205,198 Deferred outflows of resources. Deferred amount on refunding 263,885 Pension related amounts 1,416,772 Total deferred outflows of resources 1,680,657 Total assets and deferred outflows of resources $ 138,885,855 Liabilities: Current liabilities: Accounts payable $ 694,916 Accrued wages 211,074 Deposits 2,225 Current portion of long-term obligations: Compensated absences 249,975 Accrued interest 207,447 TIF bonds payable, net 3,635,000 Total current liabilities 5,000,637 Noncurrent liabilities - Noncurrent portion of long -tern obligations: Compensated absences 123,122 OPEB liability 132,237 Developer liability 2,227,807 TIF bonds payable, net 25,390,580 Net pension liability 2,738,355 Total noncurrent liabilities 30,612,101 Total liabilities 35,612,738 Deferred Inflows of Resources: Deferred gain from sale - leaseback 2,502,722 Pension related amounts 195,615 Total deferred inflows of resources 2,698,337 Net Position: Net investment in capital assets 96,108,750 Restricted for: Capital improvements 3,562,686 Community development 393,379 Tourism 461,546 Law enforcement 140,459 Unrestricted (92,040) Total net position 100,574,780 Total liabilities, deferred outflows of resources and net position $ 138,885,855 See Accompanying Notes to the Basic Financial Statements. 21 City of Riverside, Missouri Statement of Activities For the Year Ended June 30, 2016 See Accompanying Notes to the Basic Financial Statements. 22 Program Revenue Charges for Operating Grants Capital Grants Net (Expense) Functions/Programs Expenses Services and Contributions and Contributions Revenue Primary Government Governmental Activities Administrative and support $ 3,552,846 $ 47,948 $ - $ - $ (3,504,898) Municipal court 173,961 - - - (173,961) Public safety administration 441,392 - - - (441,392) Police services 2,766,514 254,540 25,742 - (2,486,232) Operations support 614,941 - - - (614,941) Fire services 1,731,925 - - - (1,731,925) Public works 5,598,064 400,424 - 847,362 (4,350,278) Parks and recreation 779,143 68,643 - - (710,500) Community development 469,177 128,375 - - (340,802) Engineering 214,828 - - - (214,828) Interest on long-term debt and related to developer liability 1,666,390 - - - (1,666,390) Total governmental activities $ 18,009,181 $ 899,930 $ 25,742 $ 847,362 (16,236,147) General revenues Taxes Sales tax 1,697,356 Franchise tax 813,186 Tourism tax 217,779 Gaming revenue tax 6,569,566 Grants and contributions not restricted to specific programs 348,521 Investment earnings 87,952 Real estate income - gaming 4,394,870 Tax increment financing revenue 6,654,901 Gain from land lease 1,300,452 Miscellaneous 141,443 Total general revenues 22,226,026 Change in net position 5,989,879 Net position, beginning of year 94,584,901 Net position, end of year $ 100,574,780 See Accompanying Notes to the Basic Financial Statements. 22 City of Riverside, Missouri Balance Sheet Governmental Funds June 30, 2016 See Accompanying Notes to the Basic Financial Statements. 23 TIF Nonmajor Total General Capital Debt Governmental Governmental Fund Improvements Service Funds Funds Assets Cash and investments $ 5,805,721 $ 3,068,858 $ 377,057 $ 1,285,127 $ 10,536,763 Taxes receivable 526,512 - - 22,270 548,782 Due from other governments - - - 504 504 Interest receivable 14,005 - 10,171 - 24,176 Gaming receivable - 600,662 - - 600,662 Other receivable 13,570 - - - 13,570 Restricted cash and investments - 843,931 5,948,695 - 6,792,626 Due from other funds 504 - - - 504 Total Assets $ 6,360,312 $ 4,513,451 $ 6,335,923 $ 1,307,901 $ 18,517,587 Liabilities Accounts payable $ 193,388 $ 485,741 $ 4,348 $ 11,439 $ 694,916 Accrued wages 211,074 - - - 211,074 Deposits 2,225 - - - 2,225 Advance from developer - 465,024 - - 465,024 Due to other funds - - - 504 504 Total liabilities 406,687 950,765 4,348 11,943 1,373,743 Fund balance Restricted for: Debt service - - 6,331,575 - 6,331,575 Capital improvements - 3,562,686 - - 3,562,686 Community development - - - 393,379 393,379 Law enforcement - - - 140,459 140,459 Tourism - - - 461,546 461,546 Committed for, capital projects - - - 300,574 300,574 Unassigned 5,953,625 - - - 5,953,625 Total fund balance 5,953,625 3,562,686 6,331,575 1,295,958 17,143,844 Total liabilities and fund balance $ 6,360,312 $ 4,513,451 $ 6,335,923 $ 1,307,901 $ 18,517,587 See Accompanying Notes to the Basic Financial Statements. 23 City of Riverside, Missouri Reconciliation of the Governmental Fund Balances To the Net Position of Governmental Activities June 30, 2016 Total governmental fund balances Capital assets used in Government Activities are not current financial resources and, therefore, are not reported as assets in the Government Funds Balance Sheet Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. Long term liabilities at year end consist of the following: Accrued compensated absences $ OPEB liability Deferred gain from sale-leaseback Long-term portion of developer liability Accrued interest on long term debt TIF Bonds payable Net pension liability Deferred charge on refunding Bond premium (discount), net Pension related deferred outflows and inflows of resources are not due and payable in the current year and, therefore, are not reported in the governmental funds as follows: Deferred inflows of resources - pension related amounts Deferred outflows of resources - pension related amounts Net position of governmental activities (373,097) (132,237) (2,502,722) (1,762,783) (207,447) (28,395,000) (2,738,355) 263,885 (630,580) See Accompanying Notes to the Basic Financial Statement. 24 17,143,844 118,688,115 (36,478,336) (195,615) 1,416,772 $ 100,574,780 City of Riverside, Missouri Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds For the Year Ended June 30, 2016 See Accompanying Notes to the Basic Financial Statements. 25 TIF Nonmajor Capital Debt Governmental General Improvements Service Funds Total Revenues Taxes: Sales and use tax $ 1,697,356 $ - $ - $ - $ 1,697,356 Franchise tax 813,186 - - - 813,186 Tourism tax - - - 217,779 217,779 Gaming revenue tax - 6,569,566 - - 6,569,566 Intergovernmental revenue 348,521 457,772 - 25,742 832,035 Charges for services - 1,860 - - 1,860 Investment earnings 49,110 112 38,730 - 87,952 Real estate income - gaming 4,394,870 - - - 4,394,870 Licenses and fees 176,323 - - - 176,323 Fines and forfeitures 244,208 - - 10,332 254,540 Recreation fees 31,837 - - 36,806 68,643 Miscellaneous 33,609 - - 6,536 40,145 Tax increment financing revenue - - 6,549,491 105,410 6,654,901 Developer contribution - 1,057,605 - - 1,057,605 Total revenues 7,789,020 8,086,915 6,588,221 402,605 22,866,761 Expenditures Current: Administrative and support 1,660,232 - 1,709,799 186,534 3,556,565 Municipal court 170,866 - - - 170,866 Public safety administration 423,449 - - 729 424,178 Police services 2,165,510 - - 167,409 2,332,919 Operations support 588,216 - - - 588,216 Fire services 1,569,163 - - 173 1,569,336 Public works 1,411,597 - - 99,221 1,510,818 Parks and recreation 642,074 - - - 642,074 Community development 447,262 - - 22,414 469,676 Engineering 199,203 - - - 199,203 Capital outlay - 2,768,726 - - 2,768,726 Debt service: Principal - - 3,775,000 - 3,775,000 Interest - - 1,373,481 - 1,373,481 Total expenditures 9,277,572 2,768,726 6,858,280 476,480 19,381,058 Excess (deficiency) of revenue over expenditures (1,488,552) 5,318,189 (270,059) (73,875) 3,485,703 Other financing sources (uses) Proceeds from sale of capital assets - 268,875 - 268,875 Transfers in 2,300,000 - 139,106 304,631 2,743,737 Transfers out (443,737) (2,300,000) - - (2,743,737) Total other financing sources (uses) 1,856,263 (2,300,000) 407,981 304,631 268,875 Net change in fund balance 367,711 3,018,189 137,922 230,756 3,754,578 Fund balance, beginning of year 5,585,914 544,497 6,193,653 1,065,202 13,389,266 Fund balance, end of year $ 5,953,625 $ 3,562,686 $ 6,331,575 $ 1,295,958 $ 17,143,844 See Accompanying Notes to the Basic Financial Statements. 25 City of Riverside, Missouri Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds To the Statement of Activities For the Year Ended June 30, 2016 Amounts reported for governmental activities in the Statement of Activities are different because: Net change in fund balances - total governmental funds $ 3,754,578 Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay exceeded depreciation in the current period. Capital outlays $ 1,408,465 Proceeds on sale of capital assets (268,875) Gain on disposal of capital assets 134,135 Depreciation expense (2,814,716) (1,540,991) Revenues in the statement of activities that do not provide current financial resources are reported as deferred inflows of resources or are recognized as cash are received in the governmental funds. Lease revenue 1,165,529 The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. Long-term debt interest expense 23,304 Principal payments 3,775,000 Change in developer liability (804,626) Amortization of bond premium and discount 95,826 Amortization of deferred charge on refunding (65,971) 3,023,533 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. Change in compensated absences accrual (93,431) Change in OPEB accrual (19,081) Pension related amount, pension expense (300,258) Change in net position of governmental activities $ 5,989,879 See Accompanying Notes to the Basic Financial Statements. 26 Expenditures: General government: Elected officials City of Riverside, Missouri 59,098 35,551 Statement of Revenues, Expenditures and Changes in Fund Balances 1,505,737 1,505,737 General Fund 1,032 Human resources 131,000 Budget to Actual 119,976 11,024 Municipal court For the Year Ended June 30, 2016 189,796 170,866 18,930 Budgeted Amounts 1,885,631 1,885,631 1,831,098 54,533 Public safety Variance with Original Final Actual Final Budget Revenues 531,422 423,449 107,973 Licenses and fees $ 95,500 $ 95,500 $ 176,323 $ 80,823 Fines and forfeitures 311,500 311,500 244,208 (67,292) Recreation fees 20,500 20,500 31,837 11,337 Sales taxes 1,444,300 1,444,300 1,697,356 253.056 Franchise taxes 727,200 727,200 813,186 85,986 Intergovernmental revenue 318,460 318,460 348,521 30,061 Investment earnings 15,000 15,000 49,110 34,110 Real estate income - gaming 4,000,000 4,000,000 4,394,870 394,870 Miscellaneous revenue 10,000 10,000 33,609 23,609 Total revenues 6,942,460 6,942,460 7,789,020 846,560 Expenditures: General government: Elected officials 59,098 59,098 35,551 23,547 Administration 1,505,737 1,505,737 1,504,705 1,032 Human resources 131,000 131,000 119,976 11,024 Municipal court 189,796 189,796 170,866 18,930 Total general government 1,885,631 1,885,631 1,831,098 54,533 Public safety Public safety administration 531,422 531,422 423,449 107,973 Police services 2,286,043 2,286,043 2,165,510 120,533 Operations support 641,997 641,997 588,216 53,781 Fire services 1,638,722 1,638,722 1,569,163 69,559 Total public safety 5,098,184 5,098,184 4,746,338 351,846 Public works Public works 1,266,916 1,266,916 1,129,940 136,976 Building maintenance 334,000 334,000 281,657 52,343 Total public works 1,600,916 1,600,916 1,411,597 189,319 Parks & recreation Parks 460,100 460,100 212,678 247,422 Community center 387,108 387,108 429,396 (42,288) Total parks & recreation 847,208 847,208 642,074 205,134 Community development Community development 482,583 482,583 447,262 35,321 Engineering 217,847 217,847 199,203 18,644 Total community development 700,430 700,430 646,465 53,965 Total expenditures 10,132,369 10,132,369 9,277,572 854,797 Revenues(under)expenditures (3,189,909) (3,189,909) (1,488,552) 1,701,357 Other financing sources (uses) Transfers in 3,000,000 3,000,000 2,300,000 700,000 Transfers out (300,000) (300,000) (443,737) (143,737) Total other financing sources (uses) 2,700,000 2,700,000 1,856,263 556,263 Net change in fund balance $ (489,909) $ (489,909) 367,711 $ 2,257,620 Fund balance, beginning of year 5,585,914 Fund balance, end of year 5,953,0-5 See Accompanying Notes to the Basic Financial Statements 27 City of Riverside, Missouri Statement of Assets and Liabilities Agency Fund June 30, 2016 Municipal Court Bond Account Assets Cash and investments $ 14,934 Liabilities Due to others $ 14,934 See Accompanying Notes to the Basic Financial Statements. 28 NOTES TO BASIC FINANCIAL STATEMENTS 29 CITY OF RIVERSIDE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2016 Note 1— Reporting Entity, Basis of Presentation, Measurement Focus and Basis of Accounting and Summary of Significant Accounting Policies Reporting Entity The City of Riverside, Missouri (the "City"), was incorporated in 1951. The City operates under a Board of Aldermen -City Administrator form of government. The City's major operations include police and fire protection, parks and recreation, public works and general administrative services. The City's reporting entity consists of the primary government, as well as its blended component units, which are legally separate organizations for which the elected officials of the primary government are financially accountable. Financial accountability is defined as appointment of a voting majority of the component unit's board, and either (a) the ability to impose will by the primary government, or (b) the possibility that the component unit will provide a financial benefit or impose a financial burden on the primary government. The accompanying financial statements present the City (the primary government) and its component units. The financial data of the component units are included in the City's reporting entity because of the significance of their operational or financial relationships with the City. The component units have a June 30, 2016 year-end. Blended component units: The Riverside Industrial Development Authority serves all the citizens of the government and is governed by a 5 -member board which is appointed by the Board of Aldermen. The Authority was established to finance infrastructure projects within blighted areas in the City. The services provided by the Authority are provided exclusively to the City or for the benefit of the City. The Tax Increment Financing Commission serves all the citizens of the government and is governed by a self-perpetuating 11 -member board of which 6 are appointed by the Board of Aldermen. The Commission was established to finance infrastructure projects within blighted areas in the City. The services provided by the Commission are provided exclusively to the City or for the benefit of the City. The Riverside Industrial Development Authority and the Tax Increment Financing Commission are reported within the Tax Increment Financing Debt Service Fund. Basis of Presentation Government -wide and fund financial statements: The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues and other non-exchange revenues. 30 The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and the fiduciary fund, even though the latter is excluded from the government -wide financial statements. Fund accounting: The accounts of the City are organized on the basis of funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self -balancing accounts which comprise its assets, liabilities, fund balance, revenues and expenditures, as appropriate. The City has the following fund types: Governmental Fund Types: Governmental fund types are those funds through which most governmental functions typically are financed. Governmental fund reporting focuses on the sources, uses and balances of current financial resources. Expendable assets are assigned to the various governmental funds according to the purposes for which they may or must be used; current liabilities are assigned to the fund from which they are paid; and the difference between governmental fund assets and liabilities, the fund equity, is referred to as "fund balance." The measurement focus is upon determination of changes in financial position, rather than upon net income determination. The City reports the following major governmental funds: General Fund: The General Fund is the City's primary operating fund. It accounts for all financial resources for the general government, except those required to be accounted for in another fund. Capital Improvements Fund: A Capital Projects Fund, accounts for real estate gaming income and other charges for services that are restricted for capital improvement projects. Tax Increment Financing Debt Service Fund: A Debt Service Fund, accounts for the resources accumulated and payments made for principal and interest on long-term debt. 31 The other governmental funds of the City are considered nonmajor and are as follows: Special Revenue Funds: Account for revenues and expenditures related to programs that are restricted in nature for specific purposes. The nonmajor special revenue funds account for the activities of the DUI Fund, Tourism Tax Fund, Federal & State Grants Fund, Officer Training Fund, Inmate Security Fund, and Fire -Police Athletic League Fund. Capital Projects Fund: Account for resources that are restricted for the construction or acquisition of designated capital assets or specific projects. The nonmajor capital projects funds account for the activities of the Capital Equipment Fund and Community Development Fund. Fiduciary Fund Types: Fiduciary fund types are used to account for assets held by a governmental unit in a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. The City has the following fiduciary fund type: Agency Fund: Accounts for resources received and held by the City as an agent and are to be expended as directed by the party for which the City is acting as an agent. The City's Agency Fund accounts for municipal court bonds held for individuals awaiting court dates, monies collected from fine assessment payable to the City. Measurement Focus and Basis of Accounting The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the fiduciary fund financial statements. Agency funds have no measurement focus. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, pensions and claims and judgments are recorded only when payment is due. Sales taxes, franchise taxes, gaming revenue tax, gaming lease revenue and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are generally recognized as revenue when cash is received by the City because they are generally not measurable until actually received. As a general rule the effect of inter -fund activity has been eliminated from the government - wide financial statements. Internal services provided and used (charges based on actual use) are not eliminated in the process of consolidation. 32 Summary of Significant Accounting Policies 1. Cash and Investments The City maintains a cash and investment pool that is available for use by all funds. Certain resources set aside are classified as restricted assets on the balance sheet because their use is limited by applicable bond requirements. The bond reserve account is used to report resources set aside to subsidize potential deficiencies that could adversely affect debt service payments. The amount available in the Debt Service Fund and the Capital Improvements Fund, capital projects fund is used to report resources accumulated for future debt service payments and construction. Investments in the U.S. Government Agencies are recorded at fair vlue. Investments in certificates of deposit and money market funds are recorded at amortized cost. The City's investment in the external investment pool (MOSIP) is not SEC -registered and is regulated by the State of Missouri. This external investment pool is reported at amortized cost pursuant to the criteria set forth in GASB Statement No. 79. Investment valuation and income recognition: Investments are recorded at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement, not an entity -specific measurement. For some assets and liabilities, observable market transactions or market information might be available; for others, it might not be available. However, the objective of a fair value measurement in both cases is the same—that is, to determine the price at which an orderly transaction to sell the asset or to transfer the liability would take place between the market and participants at the measurement date under current market conditions. Fair value is an exit price at the measurement date from the perspective of a market participant that controls the asset or is obligated for the liability. Purchases and sales of securities are recorded on a trade -date basis. See Note 2 for additional information regarding fair value measures. 2. Restricted Assets Certain funds have been set aside, in accordance with debt agreements, to cover debt payments in the event that the TIF Commission or the Riverside Industrial Development Authority were to default on their obligations on these liabilities. These resources have been shown as restricted. Cash and cash equivalents held in partnership trusts associated with agreements with developers is also shown as restricted in the TIF Debt Service Fund. 33 3. Capital Assets In the government -wide financial statements, capital assets are accounted for as assets in the Statement of Net Position. All capital assets are valued at historical cost or estimated historical cost if actual is unavailable, except for donated capital assets, which are recorded at acquisition value at the date of donation. Depreciation of all exhaustible capital assets is recorded as an expense in the Statement of Activities, with accumulated depreciation reflected in the Statement of Net Position. Depreciation is provided over the assets' estimated useful lives using the straight-line method of depreciation. The City utilizes a capitalization threshold of $10,000 for purposes of reporting capital assets. The range of estimated useful lives by type of asset is as follows: Buildings 10-50 years Improvements Other than Buildings 10-25 years Machinery, Furniture and Equipment 5-20 years Infrastructure 50 years 4. Deferred Outflows of Resources Deferred outflows of resources: In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has two items that qualify for reporting in this category. They are the deferred charge on refunding and deferred pension related amounts reported in the government -wide statement of net position. A deferred charge on refunding results from the difference in the carrying value of the refunded debt and its requisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The pension related deferred outflow consists of the unamortized portion of the net difference between projected and actual experience on plan assumptions and plan investments and change in assumptions. 5. Deferred Inflows of Resources In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has two items that qualify for reporting in this category. They are the deferred gain from sale- leaseback transactions and deferred pension related amounts reported in the government -wide statement of net position. A deferred gain from a sale-leaseback transaction results from the difference between the acquisition cost of property and the amount paid by the lessee. The amount is deferred and amortized over the term of the lease. See Note 8E for information pertaining to the deferred gain from sale-leaseback reported on the City's statement of net position. The pension related deferred inflow consists of the unamortized portion of the difference between projected and actual experience on plan assumptions. 34 6. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave since the City does not have a policy to pay any amounts when employees separate from service with the City. All vacation pay is accrued when incurred in the government -wide statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. 7. Interfund Transactions Interfund transactions are defined as transactions among City funds that would be treated as revenues and expenditures if they involved organizations external to City government and are accounted for as revenues and expenditures in the funds involved. Interfund services provided and used are not eliminated in the process of consolidation. Transactions which constitute reimbursements to a fund for expenditures initially made from it which are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the reimbursed fund. Transactions, which constitute the transfer of resources from a fund receiving revenues to a fund through which the revenues are to be expended, are separately reported in the respective funds' operating statements. Activity between funds that are representative of lending/borrowing arrangements at the end of the fiscal year are referred to as "due to/from other funds." 8. Long -Term Obligations In the government -wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts are deferred and amortized over the life of the debt using a method which approximates the effective interest method. Bond issuance costs are expensed as incurred. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuance are reported as other financing sources while discounts on debt issuance are reported as other financing uses. Bond issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 9. Pensions For the purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Missouri Local Government Employees Retirement System (LAGERS) and additions to/deductions from LAGERS fiduciary net position have been determined on the same basis as they are reported by LAGERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 35 10. Advance From Developer The City and a developer contributed cash to a partnership escrow account which is recorded as restricted cash and cash equivalents in the Capital Improvements Fund. The escrow account is used to fund City projects that will be sold to the developer upon completion. The advance from developer liability represents the unspent portion of funds contributed by the developer. As cash payments are made from escrow the City's portion of the expenditures is recorded as capital outlay and the developer's portion of the payment is recognized as developer contributions revenue in the statement of revenues, expenditures and changes in fund balance as all revenue recognition criteria have been met. 11. Developer Liability The City is currently constructing office buildings in connection with developer agreements. The agreements require the developer to provide an advance of cash for the project and upon sale of the property the advance will be returned to the developer with an additional 15% return on investment. The advance and an estimate of the return on investment is recorded as a developer liability on the statement of net position, in addition to the contributed escrow accounts already reported in the Capital Improvements Fund. 12. Fund Balance GASB Statement No. 54, Fund Balance Reporting and Government Fund Type Definition establishes criteria for reclassifying fund balances into specifically defined classifications and clarifies definitions for governmental fund types. In the governmental fund financial statements, fund balances are classified as follows: Nonspendable: Amounts which cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact. Restricted: Amounts restricted to specific purposes when constraints placed on the use of the resources are either externally imposed by creditors, grantors or state or federal laws or imposed by law through constitutional provisions or enabling legislation. Committed: Amounts which can be used only for specific purposes pursuant to constraints formally imposed by the Board of Alderman through ordinance approved prior to year-end. Those committed amounts cannot be used for any other purpose unless the Board of Alderman removes or changes the specified use by taking the same action it employed to commit those amounts. Assigned: Amounts constrained by the City's intent to use them for a specific purpose. The City's fund balance policy delegated the authority to assign fund balance to the City Manager and Finance Director. Unassigned: All amounts not included in other spendable classifications. The General Fund is the only fund that would report a positive amount in unassigned fund balance. When an expenditure is incurred in governmental funds which can be paid using either restricted or unrestricted resources, the City policy is to pay the expenditure from restricted fund balance and then from less -restrictive classifications — committed, assigned and then unassigned fund balances. 36 13. Net Position Net position represents the difference between assets and deferred outflows and liabilities and deferred inflows of resources. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on its use through enabling legislation or through external restrictions imposed by creditors, grantors or laws and regulations of other governments. Net position restricted through enabling legislation consist of $3,562,686 for capital improvements, $140,459 for law enforcement, $393,379 for community development which represents downtown neighborhood improvements and $461,546 for tourism. The City first applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position is available. 14. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States used by the City requires management to make estimates and assumptions that affect certain reported amounts in the financial statements and disclosures; accordingly, actual results could differ from those estimates. 15. Budgetary Information The Board of Aldermen annually adopts budgets for the following funds: General Fund Tourism Tax Fund — Nonmaj or Special Revenue Fund Capital Improvements Fund — Major Capital Projects Fund Community Development Fund — Nonmajor Capital Projects Fund Capital Equipment Fund—Nonmajor Capital Projects Fund Tax Increment Financing Debt Service Fund The City does not adopt a budget for the DUI Fund, Federal & State Grants Fund, Officer Training Fund, the Inmate Security Fund and the Fire -Police Athletic League Fund. All appropriations are legally controlled at the fund level for the individual funds. On June 2, 2015, the Board of Aldermen formally approved the original adopted budget for fiscal year 2016. The City follows these procedures in establishing the budgetary data reflected in the financial statements: • The City Administrator submits to the Board of Aldermen a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed operating expenditures, capital expenditures and the means for financing them. • Public hearings are conducted to obtain comments from all interested parties. 37 • The budget for the coming year is formally adopted on or before the last day of the current fiscal year. • The City Administrator is authorized to make changes within departments, between departments and between functions within each fund. Changes or transfers at the fund level require approval by the Board of Aldermen. Under Missouri law, expenditures may not legally exceed budgeted appropriations at the fund level. If expenditures for a fund exceed the budget, either the budget must be amended or the Board of Aldermen must pass a resolution authorizing the expenditures in excess of the budget. The budget was not amended during the fiscal year. The budgets are integrated into the accounting system, and the budgetary data, as presented in the financial statements for all funds with annual budgets, compare the expenditures with the amended budgets. All budgets are presented in the same format as the actual statements. Note 2 — Deposits and Investments Fair value measurements: During the fiscal year ending June 30, 2016, the City adopted GASB Statement No. 72, Fair Value Measurement and Application, which provides guidance for determining a fair value measurement for financial reporting purposes. The City categorizes its assets and liabilities measured at fair value within the hierarchy established by generally accepted accounting principles. Assets and liabilities valued at fair value are categorized based on inputs to valuation techniques as follows: Level I input: Quoted prices for identical assets or liabilities in an active market that an entity has the ability to access. Level 2 input: Inputs—other than quoted prices included within Level 1—that are observable for an asset or liability, either directly or indirectly. Level 3 input: Inputs that are unobservable for the asset or liability which are typically based upon the Plan's own assumptions as there is little, if any, related market activity. Hierarchy: The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. Inputs: If the fair value of an asset or a liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement. 0.11 As of June 30, 2016, the City had the following investments: Investments at Fair Value U.S. Government Sponsored Enterprise Notes Investments at Amortized Cost Ameritrade Money Market Fund Local government investment pool-MOSIP Certificate of Deposits Federated Money Market Fund Total Fair Value Weighted Average Fair Value Maturity Hierarchy Fair Value Years Level $9,700,854 2.99 2 7,268 n/a 641 n/a 2,900,000 0.75 2,842,600 n/a $15,451,363 Interest Rate Risk. In accordance with its investment policy, the City manages its exposure to declines in fair values by limiting the final maturity date of all operating investments to 5 years or less from the date of purchase. Investments for bond proceeds and debt service reserve accounts may be extended to match the anticipated cash flow needs. Credit Risk/Concentration of Credit Risk. Missouri state statutes authorize the City, with certain restrictions, to investments which are: a. Obligations of the United States government, the State of Missouri, this city, or; b. In bonds, bills, notes, debentures or other obligations guaranteed as to payment of principal and interest by the government of the United States or any agency or instrumentality thereof, the State of Missouri or this city, or; c. In revenue bonds of the City, or; d. In certificates of deposit, savings accounts as defined in Chapter 369, Revised Missouri Statutes or in interest bearing time deposits when such funds are held in United States banks, state banks, savings and loan associations operating under Chapter 369, Revised Missouri Statutes, or savings and loan associations authorized by the United States government so long as such deposits, savings accounts, and interest bearing deposits are secured by one or more of the types of securities described in subparagraphs (a), (b), or (c) of this section. e. Banker's acceptances issued by domestic commercial banks possessing the highest rating issued by a nationally recognized rating agency, or; f. Commercial paper issued by domestic corporations which has received the highest rating issued by a nationally recognized rating agency. g. Investments permitted by the Board of Aldermen which are authorized in the model investment policy prepared by the State of Missouri for political subdivisions. kl� Generally, credit risk is the risk that the issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City's investment policy limits the percentage of the portfolio that can be in various investment classes. The investment classes and their respective limits are shown below. Investment Class Limit Bankers Acceptances 10% Collateralized Certificate of Deposit 100% U.S. Treasuries 100% U.S. Agencies 80% Collateralized Repurchase Agreements 50% The table below illustrates the City's exposure to credit risk and concentration of credit risk: Investment Type Federal Home Loan Bank Federal Home Loan Mortgage Corporation Federal National Mortgage Association Federal Farm Credit Bank Federated Treasury Obligation Fund Money Market Certificates of Deposit Missouri Securities Investment Program Money Market Percent of Standard & Poor's Total Credit Rating Investments AA+ 9.7% AA+ 15.7% AA+ 32.5% AA+ 4.9% AAA N/A N/A 18.8% AAA N/A Investments in the Missouri Securities Investment Program and the Federated Treasury Obligation Fund are not subject to concentration of credit risk. Custodial Credit Risk The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the City will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the City will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. The City's policy is to collateralize the demand deposits and repurchase agreements with securities held by the financial institution's agent and in the City's name. At June 30, 2016, the City's deposits were insured by Federal depository insurance and uninsured deposits were fully collateralized by securities held in the City's name by their financial institution's agent. The City's securities were registered and held by the City's financial institution in the City's name. As of June 30, 2016, the City's bank balance of deposits with financial institutions of $1,923,041 and the City's investments were not exposed to custodial credit risk. ,K Note 3 — Capital Assets The following is a summary of changes in capital assets for the year ended June 30, 2016: Capital assets not being depreciated: Land Construction in progress Total capital assets not being depreciated Capital assets being depreciated: Buildings Improvements Machinery and equipment Infrastructure Total capital assets being depreciated Less accumulated depreciation for: Buildings Improvements Machinery and equipment Infrastructure Total accumulated depreciation 2015 2016 Balance Additions Deletions Balance $20,450,715 $ - $(133,952) $20,316,763 5,211,259 1,179,248 (2,527,507) 3,863,000 25,661,974 1,179,248 (2,661,459) 24,179,763 19,026,865 - 4,078,591 - 5,816,473 229,217 87,509,452 2,527,507 19,026,865 4,078,591 (137,153) 5,908,537 90,036,959 116,431,381 2,756,724 (137,153) 119,050,952 379,308 Fire Services (4,239,270) (383,956) - (4,623,226) (432,190) (80,085) - (512,275) (4,312,485) (549,936) 136,365 (4,726,056) (12,880,304) (1,800,739) - (14,681,043) (21,864,249) (2,814,716) 136,365 (24,542,600) Total capital assets, being depreciated, net 94,567,132 (57,992) (788) 94,508,352 Governmental activities capital assets, net $120,229,106 $1,121,256 $(2,662,247) $118,688,115 Depreciation expense was charged to functions/programs of the City as follows: Administrative and support $49,852 Police Services 379,308 Fire Services 72,844 Public Works 2,177,041 Parks and Recreation 132,746 Community Development 2,925 Total Depreciation Expense 2 814 716 41 Construction Commitments A summary of the City's commitments on uncompleted construction contracts and developer agreements and the amount, which is expected to be funded by the City as follows: Contract To Be Capital Improvements Fund Amount Completed Completed Horizons Phase I Construction $10,698,691 $9,950,375 $748,316 41St & Helena 864,500 842,887 21,613 Total $11,563,191 $10,793,262 $769,929 Note 4 — Interfund Balances and Transfers Interfund balances at June 30, 2016 consisted of: General fund Nonmajor governmental funds Total Due From $504 $504 Transfers for the year ended June 30, 2016 consisted of: Transfers In General fund $ 2,300,000 Capital improvements fund - TIF debt service fund 139,106 Nonmajor governmental funds 304,631 Total $2,743,737 Due To 504 $504 Transfers Out $ 443,737 2,300,000 $2,743,737 Transfers are used to move unrestricted revenues in the general fund and gaming revenues in the Capital Improvements Fund to finance various programs that the City must account for in other funds in accordance with budgetary authorizations, including for debt service subsidies or matching funds for various grant programs and to fund capital expenditures. 42 Note 5 — Long -Term Debt Long-term liability balances and activity for the year ended June 30, 2016 were as follows: Balance June 30, 2015 Additions Retirements Tax Increment Balance Amounts Due June 30, Within One 2016 Year Financing Bonds $32,170,000 $ - $3,775,000 $28,395,000 $3,635,000 Premium 726,406 - 95,826 630,580 - (discount) on Debt $2,385,000 2011 Series 2014 Tax bonds, net Increment Financing Debt $7,640,000 2014 Net pension 1,747,126 991,229 - 2,738,355 - liability OPEB Liability 113,156 20,081 1,000 132,237 - Compensated absences 279,666 373,097 279,666 373,097 249,975 Total $35,036,354 $1,384,407 $4,151,492 $32,269,269 $3,884,975 Compensated absences, net pension liability and OPEB liability are usually liquidated by the General Fund. Tax increment financing bonds payable as of June 30, 2016 is comprised of the following individual issues: Fiscal Year Outstanding Balance Issued Maturity Date Interest Rates June 30, 2016 Series 2007A Tax Increment Financing Debt $30,265,000 2007 Series 2007B Tax Increment Financing Debt $10,000,000 2007 Series 2011 Tax Increment Financing Debt $2,385,000 2011 Series 2014 Tax Increment Financing Debt $7,640,000 2014 Total 5/1/08 — 5/1/26 4.5% to 5.0% 5/1/14 — 5/1/26 5/1/12-5/1/20 4.5% 2.0% to 4.0% $16,750,000 5,415,000 850,000 5/1/15 — 5/1/20 5.0% to 5.25% 5,380,000 $28,395,000 43 Annual debt service requirements to maturity for tax increment financing bonds are as follows: Fiscal Year Principal Interest 2017 $3,635,000 $1,244,681 2018 3,780,000 1,111,156 2019 3,925,000 970,319 2020 3,735,000 809,168 2021 2,335,000 639,738 2022-2026 10,985,000 1,433,023 Total $28,395,000 $ 6,208,085 The Series 2007 A and B Tax Increment Financing Bonds are collateralized by land owned by the City of Riverside. During 2007, the Riverside Industrial Development Authority, a blended component unit of the City, issued $40,265,000 of Tax Increment Financing Revenue Bonds to finance construction of infrastructure within the Horizons Business Park. These bonds are payable solely from property tax increment received with respect to the financial projects and are collateralized by land owned by the City. Incremental property taxes were projected to produce $64,706,572 or 100% of the debt service requirements over the life of the bonds. These bonds are not direct obligations of the City. Total principal and interest remaining on the bonds is $27,895,185 payable through 2026. For the current year, principal and interest paid and total incremental tax revenues were $3,623,513 and $4,064,293, respectively. During 2011, the Tax Increment Financing Commission, a blended component unit of the City, issued $2,385,000 of Tax Increment Financing Revenue Bonds for a current refunding of the City's Series 1998, 1999 and 2002 Tax Increment Financing Revenue Bonds. Total principal and interest remaining on the bonds is $926,050 payable through 2020. During 2014, the Riverside Industrial Development Authority, a blended component unit of the City, issued $7,640,000 of Tax Increment Financing Revenue Bonds for an advance refunding of the City's Series 2004 Tax Increment Financing Revenue Bonds. Total principal and interest remaining on the bonds is $5,781,850 payable through 2020. Conduit Debt Obligations The City has issued Missouri recovery facility revenue bonds to provide financial assistance to a private business for economic development purposes. The bonds are secured by properties financed as well as letters of credit and are payable solely from payments received from the private businesses involved. Ownership of the acquired facilities is in the name of the private business served by the bond issuance. Neither the City nor any political subdivision thereof is obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying basic financial statements. As of June 30, 2016, there was one issue of Missouri recovery zone facility revenue bonds outstanding with an aggregate original issue amount of $20,000,000, and a principal balance outstanding of $11,250,000. Note 6 — Real Estate Income — Gaming The City has an agreement with Penn Gaming to operate a riverboat casino on land owned by the City. Under the agreement, Penn Gaming agreed to pay the City a percentage of the casino's adjusted gross receipts. Adjusted Gross Receipts % Payable to City $0 to $50,000,000 3% $50,000,0000 to $100,000,000 4% Over $100,000,000 1 %z% The agreement expires in fiscal year 2020, with five remaining five-year options to extend the terms of the lease. The amount of revenue recorded on the statement of revenues, expenditures and changes in fund balance in the General Fund for the fiscal year ended June 30, 2016 is $4,394,870. Note 7 — Other Post Employment Benefits Plan Description: The City provides for retiree Medical and Dental coverage to qualifying former employees through Midwest Public Risk (MPR), a public -entity risk pool. MPR functions as an agent multiple -employer plan. To be eligible, employees must be full-time with at least ten years of service with an MPR employer. Retirees and their spouses may obtain coverage until Medicare eligibility by paying required premium rates. Upon retiree death or attainment of age 65 spouses may continue coverage for up to three years not to exceed to their own age 65. The City maintains a trust arrangement with MPR to collect premiums and pay claims/administrative costs. This trust arrangement does not qualify as an "OPEB Plan" and is not treated as holding assets in order to offset OPEB liabilities. However, GASB does require the "Plan" to determine the valuation interest rate (or discount rate) based on expected return of the MPR Health & Dental Fund since it is used to pay retiree claims. The plan is not accounted for as a trust fund since an irrevocable trust has not been established. There is no stand alone financial report for the plan. Funding_ policy: The City does not pay retiree benefits directly; they are paid implicitly over time through employer subsidization of active premiums that would be lower if retirees were not part of the experience group. Retirees who elect to continue coverage in the medical and dental plans offered through MPR are required to pay a contribution until the employee becomes eligible for Medicare. Since the retirees pay the premiums each year, the City's share of any premium cost is determined on the basis of a blended rate or implicit rate subsidy calculation. The plan is financed on a pay-as-you-go basis. The benefits and benefit levels are governed by City policy and the MPR trust agreement. As of June 30, 2016, there was 1 City retiree participating in the plan. 45 Annual OPEB Cost and Net OPEB Obli ag tion: The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance to the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years. The following table shows the components of the City's annual OPEB cost for the year, the amount actuarially contributed to the plan and changes in the City's annual OPEB obligation: Annual required contribution $21,637 Interest on net OPEB obligation 5,092 Adjustment to annual required contribution (6,648) Annual OPEB cost (expense) 20,081 Contributions and payments made (1,000) Increase in net OPEB obligation 19,081 Net OPEB obligation — July 1, 2015 113,156 Net OPEB obligation — June 30, 2016 $132,237 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligations follows: Fiscal Year Ending Annual OPEB Cost Annual OPEB Cost Contributed Net OPEB Obligation June 30, 2014 21,916 0.0% 90,206 June 30, 2015 22,950 0.0% 113,156 June 30, 2016 20,081 5.0% 132,237 Funded status and funding progress: As of July 1, 2015, the most recent actuarial valuation date, the plan was 0 percent funded. The actuarial accrued liability for benefits was $115,281 and the actuarial value of assets is none, resulting in an unfunded actuarial accrued liability (UAAL) of $115,281. The covered payroll (annual payroll of active employees covered by the plan) was $3,736,067 and the ratio of the UAAL to the covered payroll was 3.1 percent. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the health care cost trend. Amounts determined regarding the funded status of the plan and annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Actuarial methods and assum tp ions: Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and included in the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. 46 In the July 1, 2015 actuarial valuation, projected unit credit actuarial cost method was used. The actuarial assumptions included a 4.5 percent investment rate of return (net of administrative expenses), projected medical cost trend rate of 7.0 percent initially, grading down to 5 percent over 6 years. The City's unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open group. The remaining amortization period at July 1, 2015, was 30 years. Note 8 — Other Information A. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. To protect itself against these risks of loss, the City is a member of Midwest Public Risk (MPR) and MOPERM, not-for-profit corporations consisting of governmental entities formed to acquire insurance for its members. MPR and MOPERM operate as a purchasing pool and are not joint venture activities of the City. The City has no control over budgeting, financing, management selection, or the governing bodies. MPR and MOPERM provide both conventional and self-insurance coverage for their members, including medical, dental, property, casualty, general liability, and workers' compensation. The City participates in property casualty, general liability and workers' compensation insurance coverage. MPR and MOPERM manage the cash and investment pool, funded by insurance premiums, on behalf of its members. MPR's and MOPERM's investment pools consist of interest- bearing deposits, U.S. Treasury strips, U.S. Governmental agency obligations, and collateralized mortgage obligations. In the event that a deficit occurs with respect to any fiscal year of MPR or MOPERM for which the City was a participant at any time during such year, and in the event that MARCIT or MOPERM determines that an assessment is required in order to provide additional funds for the obligations of the insurance company for such year, and further, in the event that the City was covered by the types of benefits requiring the assessment during the time period in which the assessment arose, the City is obligated to pay its pro rata share of any such assessment whether or not the City is a member of MPR or MOPERM at the time of such assessment. Management of the City is not aware of any deficit situation in either risk pool that would require an accrual of a liability as of June 30, 2016. There has been no significant change in insurance coverage from the previous fiscal year. Settled claims have not exceeded insurance coverage in any of the past three years. 47 Risk of Loss Type of Loss Method Managed Retained a. Torts, errors and omissions Purchased commercial insurance None health and life b. Workers Compensation- Eniployee injuries c. Physical property loss al natural disasters RM I= Management believes such coverage is sufficient to preclude any significant uninsured losses to the City. Settled claims have not exceeded this insurance coverage in any of the past three fiscal years. WZ—AT Plan Description: The City's defined benefit pension -plan provides certain retirement, disability and death benefits to plan members and beneficiaries. The City participates in the Missouri Local Government Employees Retirement System (LAGERS). LAGERS is an agent multiple - employer., statewide public employee pension plan established in 1967 and administered in Iccordance with RSMo. 70,600-70,755. As such, it is LAGERS responsibility to administer the law in accordance with the expressed intent of the General Assembly. The plan is qualified under the Internal Revenue Code Section 401(a) and is tax exempt. The responsibility for the operations and administration of LAGERS is vested in the LAGERS Board of Trustees consisting of seven persons. LAGERS issues a publicly available financial report that includes financial statements and required supplementary information. This report may be obtained by accessing the LAGERS website at \A,-Nvw.mo1-4 �Ier - Benefits provided - LAGERS provides retirement,, death and disability benefits. Benefit provisions are adopted by the governing body of the employer, within the options available in the state statutes governing LAGERS. All benefits vest after 5 years of credited service. Employees who retire on or after age 60 (55 for police and fire) with 5 or more years of service are entitled to an allowance for life based upon the benefit program information provided below. Employees riin retire with an earlp retirement benefit with a miummin of 5 -pears xf *y6tW*zMTOft4WW after attaining age 55 (50 for police and fire) and receive a reduced allowance. City of Riverside Valuation Benefit Multiplier: 2.0% Final Average Salary 5 Years Member Contributions 0% Benefit terins provide for annual post retirement adjustments to each member's retirement allowance subsequent to the member's retirement date. The annual adjustment is based on the increase in the Consumer Price Index and is limited to 4% each year, go Employees covered by benefit terms: At June 30, 2016, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 29 Inactive employees entitled to but not yet receiving benefits 26 Active employees 75 Total 130 Contributions: The employer is required to contribute amounts at least equal to the actuarially determined rate, as established by LAGERS. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amoun to finance an unfunded accrued liability. Employees of the City do not contribute to the pension plan. The City's employer contribution rates are 15.9% (General), 22.2% (Police), and 14.5% (Fire) of annual covered payroll. Net Pension Liability: The City's net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of February 29, 2016 and rolled forward to the measurement date using standard update procedures. Actuarial assumptions: The total pension liability in the February 28, 2016 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 3.25% wage inflation; 2.50% price inflation Salary Increase 3.25% to 6.55% including wage inflation Investment rate of return 7.25%, net of investment and administration expenses Mortality rates were based on RP -2014 Healthy Annuitant Mortality table for males and females for healthy retirees, the RP -2014 Disabled Mortality table for males and females for disabled retirees and the RP -2014 Employees Mortality table for males and females for preretirement employees. The tables were set back 10 years and adjusted for the MP -2015 improvement scale. The actuarial assumptions used in the February 29, 2016 valuation were based upon experience observed during the most recent 5 -year period study for the period March 1, 2010 through February 28, 2015. The long-term expected rate of return on pension plan investments was determined using a model method in which the best -estimate ranges of expected future real rates of return (expected returns, net of investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset Class Equity Fixed Income Real Assets Strategic Assets Target Allocation 43.00% 26.00% 21.00% 10.00% Long -Term Expected Real Rate of Return 5.00% 3.00% 3.25% 5.60% Discount rate: The discount rate used to measure the total pension liability is 7.25%. The projection of cash flows used to determine the discount rate assumes that employer and employee contributions will be made at the rates agreed upon for employees and the actuarially determined rates for employers. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to pay all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payment to determine the total pension liability. Balances at 6/30/2015 Changes for the year: Service Cost Interest Difference between expected & actual experience Change in assumptions Contributions — employer Net investment income Benefit payments, including refunds Administrative expense Other changes Net changes Balances at 6/30/16 Increase (Decrease Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) — (b) $ 10,852,609 $9,105,483 $1,747,126 480,583 795,380 (51,982) 393,633 (240,061) 1,377,603 $12,230,212 700,760 10,866 (240,061) (9,845) (75,346) 386,374 $9,491,857 480,583 795,380 (51,932) 393,633 (700,760) (10,866) 9,845 75,346 991,229 $2,738,355 Sensitivity of the net pension liability to changes in the discount rate: The following presents the Net Pension Liability of the City, calculated using the discount rate of 7.25%, as well as what the City's Net Pension Liability would be using a discount rate that is 1 percentage point lower (6.25%) or one percentage point higher (8.25%) than the current rate. 1% Decrease 6.25% $4,969,916 Current Single Discount Rate Assumption 7.25% $2,738,355 50 1% Increase 8.25% $949,126 Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions: For the year ended June 30, 2016, the City recognized pension expense of $1,001,018. The City reported deferred outflows and inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences in experience $269,386 Excess (deficit) investment returns 809,354 Change in assumptions 338,032 Total $1,416,772 ($195,615) ($195,615) Amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 30: 2017 $313,385 2018 313,385 2019 313,387 2020 220,309 2021 60,067 Thereafter 624 Total $1,221,157 The deferred outflows of resources related to the difference between expected and actual investment earnings is being amortized over a closed five-year period. The remaining deferred outflows and inflows of resources are being amortized over a closed period equal to the average of the expected service lives of all employees as of the beginning of each measurement period. Payable to the Pension Plan: The City reported a payable of $53,068 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2016. C. Commitments and Contingencies There are no claims for lawsuits to which the City is a part as a result of certain injuries and various other matters and complaints arising in the ordinary course of City activities. The City's management and legal counsel anticipate that any unknown potential claims, if any, against the City not covered by insurance would not have a material effect on the financial position of the City. 51 D. Federal and State Grants In the current and prior years the City has participated in a number of federal and state programs that were fully or partially funded by grants received from other governmental units. Expenditures financed by grants are subject to audit by the appropriate grantor government. If expenditures are disallowed due to noncompliance with grant program regulations, the City may be required to reimburse the grantor government. As of June 30, 2016 certain grant expenditures have not been audited by grantor governments, but the City believes that disallowed expenditures, if any, based on subsequent audits will not have a material effect on any of the individual governmental funds or the overall financial position of the City. E. Lease During fiscal year 2011, the City entered into a sales -type lease agreement with a private business (the lessee) which expires in fiscal year 2021. In connection with the agreement, the City purchased land for an approximate cost of $630,012. The lessee will pay the City $1,655,280 in order to lease the land; the title of the land will not transfer to the third party until the end of the lease term (December 2020). The lessee paid the City $762,300 during fiscal year 2011. The remaining balance of $892,980 was received in fiscal year 2012. In accordance with GASB Statement No. 62, this transaction resulted in a gain on a sales -type lease of $1,025,268 (difference between the cost of the land and the amount paid by the lessee). Because the title to the land will not be transferred to the lessee until the end of the lease term, this gain was recorded as a deferred inflow of resources - deferred gain on the City's government -wide statement of net position and is being recognized as revenue on a straight-line basis over the life of the lease. The amount of revenue recorded on the City's government -wide statement of activities for fiscal year ending June 30, 2016 is $102,526. The balance of the deferred gain on sales- leaseback as of June 30, 2016 is $1,091,382. During fiscal year 2015, the City entered into a sales -type lease agreement with a private business (the lessee) which expires in fiscal year 2017. In connection with the agreement, the City purchased land for an approximate cost of $553,434. The lessee paid the City $2,659,438 in order to lease the land; the title of the land will not transfer to the third parry until the end of the lease term (June 2017). In accordance with GASB Statement No. 62, this transaction resulted in a gain on a sales -type lease. Because the title to the land will not be transferred to the lessee until the end of the lease term, this gain was recorded as a deferred inflow of resources - deferred gain on the City's government -wide statement of net position and is being recognized as revenue on a straight-line basis over the life of the lease. The amount of revenue recorded on the City's government -wide statement of activities for fiscal year ending June 30, 2016 is $1,063,003. The balance of the deferred gain on sales- leaseback as of June 30, 2016 is $1,411,340. 52 Note 9 — Governmental Accounting Standards Board Statements GASB has issued several statements not yet required to be implemented by the City. The City's management has not yet determined the effect these Statements will have on the City's financial statements. However, the City plans to implement all standards by required dates. The Statements which may impact the City are as follows: GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, issued in June 2015, will be effective for the City beginning with its fiscal year ending June 30, 2018. The Statement replaces the requirements of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions and requires governments to report a liability on the face of the financial statements for the OPEB they provide and outlines the reporting requirements by governments for defined benefit OPEB plans administered through a trust, cost-sharing OPEB plans administered through a trust and OPEB not provided through a trust. The Statement also requires governments to present more extensive note disclosures and required supplementary information about their OPEB liabilities. Some governments are legally responsible to make contributions directly to an OPEB plan or make benefit payments directly as OPEB comes due for employees of other governments. In certain circumstances, called special funding situations, the Statement requires these governments to recognize in their financial statements a share of the other government's net OPEB liability. GASB Statement No. 77, Tax Abatement Disclosures, issued August 2015, will be effective for the City beginning with its fiscal year ending June 30, 2017. This statement requires governments to disclose information about their own tax abatements separately from information about tax abatements that are entered into by other governments and reduce the reporting government's tax revenues. The disclosures about the government's own tax abatement agreements includes the purpose of the tax abatement program, the tax being abated, the amount of tax being abated, the provisions of recapturing abated taxes, the types of commitments made by tax abatement recipients, and other commitments made by government in tax abatement agreements. The disclosures about tax abatements that are entered into by other governments and reduce the reporting government's tax revenues includes the name of the government entering into the abatement agreement, the tax being abated, and the amount of the reporting government's tax being abated. GASB Statement No. 82, Pension Issues, issued April 2016, will be effective for the City, beginning with its fiscal year ending June 30, 2017. Statement No. 82 is designed to improve consistency in the application of the pension standards by clarifying or amending related areas of existing guidance with respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions, and No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. Specifically, this Statement addresses issues regarding (1) the presentation of payroll -related measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan member) contribution requirements. 53 City of Riverside, Missouri Required Supplementary Information Other Post Employment Benefit Plan Schedule of Funding Progress The information presented in the required supplementary schedule was determined as part of the actuarial valuation date as of July 1. 2015. Additional information follows: a. The actuarial method used to determine the ARC is the projected unit credit actuarial cost method. b. There are no plan assets. c. The actuarial assumptions included: (1) 4.5 percent investment rate of return and (b) a projected 7.0 percent cost trend for medical claims and prescriptions; reduced by decrements to an ultimate rate of 5 percent in 6 years. d. The amortization method is level percentage of pay over 30 years based on an open group. 54 (b -a) (b) Unfunded [(b-a)/c] (a) Actuarial (Over (c) UAAL as a Fiscal Actuarial Actuarial Accrued funded) (alb) Annual Percentage Year Valuation Value Liability AAL Funded Covered of Covered Ended Date of Assets (AAL) (UAAL) Ratio Payroll Payroll 2014 7/1/2013 $ - $ 114,404 $ 114,404 - % $ 3,691,345 3.1% 2015 7/1/2013 - 114,404 114,404 - % 3,691,345 3.1% 2016 7/1/2015 - 115,281 115,281 - % 3,736,067 3.1% The information presented in the required supplementary schedule was determined as part of the actuarial valuation date as of July 1. 2015. Additional information follows: a. The actuarial method used to determine the ARC is the projected unit credit actuarial cost method. b. There are no plan assets. c. The actuarial assumptions included: (1) 4.5 percent investment rate of return and (b) a projected 7.0 percent cost trend for medical claims and prescriptions; reduced by decrements to an ultimate rate of 5 percent in 6 years. d. The amortization method is level percentage of pay over 30 years based on an open group. 54 City of Riverside, Missouri Missouri Local Government Employees Retirement System Required Supplementary Information Schedule of Changes in Net Pension Liability and Related Ratios Last 10 Fiscal Years Fiscal year ending June 30, Total Pension Liability Service Cost Interest on the Total Pension Liability Benefit Changes Difference between expected and actual experience Assumption Changes Benefit Payments Refunds Net Change in Total Pension Liability Total Pension Liability beginning Total Pension Liability ending Plan Fiduciary Net Position Contributions -employer Contributions -employee Pension Plan Net Investment income Benefit Payments Refunds Pension Plan Administrative expense Other Net Change in Plan Fiduciary Net Position Plan Fiduciary Net Position beginning Plan Fiduciary Net Position ending Employer Net Pension Liability Plan Fiduciary Net Position as a percentage of the Total Pension Liability Covered Employee Payroll Employer's Net Pension Liability as a percentage of covered employee payroll 2016 2015 $ 480,583 $ 465,251 795,380 715,173 (51,932) 195,168 393,633 - (240,061) (312,317) 9,105,483 8,518,612 1,377,603 1,063,275 10,852,609 9,789,334 $ 12,230,212 $ 10,852,609 $ 700,760 $ 713,467 10,866 167,165 (240,061) (312,317) (9,845) (9,599) (75,346) 28,155 386,374 586,871 9,105,483 8,518,612 $ 9,491,857 $ 9,105,483 $ 2,738,355 $ 1,747,126 97.20% 104.09% $ 4,106,637 $ 3,814,750 66.68% 45.80% Notes to schedule: GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 10 -year trend is compiled, the City will present information for those years for which information is available. 55 (THIS PAGE LEFT BLANK INTENTIONALLY) City of Riverside, Missouri Missouri Local Government Employees Retirement System Required Supplementary Information SCHEDULE OF CONTRIBUTIONS Last 10 Fiscal Years 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Actuarially determined contribution $700,103 $717,000 $703,828 $649,559 $626,517 $605,177 $530,374 $344,093 $293,701 $214,625 Contributions in relation to the actuarially, determined contribution 700,103 712,502 676,577 642,214 626,517 605,177 530,374 343,732 293,701 214,521 Contribution deficiency (excess) $0 $4,498 $27,251 $7,345 $0 $0 $0 $361 $0 $104 Covered -employee payroll $4,039,173 $3,926,513 $3,868,205 $3,692,007 $3,724,212 $3,585,177 $3,360,791 $2,853,226 $2,393,671 $2,001,069 Contributions as a percentage of covered - employee payroll 17.33% 18.15% 17.49% 17.39% 16.82% 16.88% 15.78% 12.05% 12.27% 10.72% Note: For a complete description of the actuarial assumptions used in the annual valuations, please refer to Footnote 8.8. or please contact the LAGERS office in Jefferson City. 56 City of Riverside, Missouri Combining Balance Sheet Nonmajor Governmental Funds June 30, 2016 Assets Cash and investments Taxes receivable Due from other governments Total assets Liabilities Accounts payable Due to other funds Total liabilities Fund balances Restricted for: Law enforcement Tourism Community development Committed for, capital projects Total fund balance Total liabilities and fund balances DUI Fund Special Revenue Tourism Federal & State Tax Grants $ 34,695 $ 439,276 $ - - 22,270 - - - 504 $ 34,695 $ 461,546 $ 504 504 504 34,695 - - - 461,546 - 34,695 461,546 - $ 34,695 $ 461,546 $ 504 57 Special Revenue Capital Project Total Nonmajor Officer Inmate Fire -Police Capital Community Governmental Training Security Athletic League Equipment Development Funds $ 11,561 $ 28,268 $ 67,318 $ 310,630 $ 393,379 $ 1,285,127 - - - - - 22,270 - - - - - 504 11,561 $ 28,268 $ 67,318 $ 310,630 $ 393,379 $ 1,307,901 $ 262 $ 262 $ 1,121 $ 10,056 $ - $ 11,439 - - - 504 1,121 10,056 - 11,943 11,299 28,268 66,197 - - 140,459 - - - _ - 461,546 - 393,379 393,379 - - - 300,574 - 300,574 11,299 28,268 66,197 300,574 393,379 1,295,958 $ 11,561 $ 28,268 $ 67,318 $ 310,630 $ 393,379 $ 1,307,901 58 City of Riverside, Missouri Combining Statement of Revenues, Expenditures and Changes in Fund Balance Nonmajor Governmental Funds For the Year Ended June 30, 2016 Revenue: Taxes, tourism tax Intergovernmental revenue Fines and forfeitures Recreation fees Miscellaneous revenue Tax increment financing revenue Total revenue Expenditures: Current: Administrative and support Public safety administration Police services Fire services Public works Community Development Total expenditures Excess of revenue over/(under) expenditures Other financing sources/(uses) Transfers in Total other financing sources Net change in fund balance Fund balance, beginning of year Fund balance, end of year Special Revenue DUI Tourism Federal & State Fund Tax Grants $ - $ 217,779 $ - - 25,742 2,043 - - - 450 - 2,043 218,229 25,742 160,270 - 225 - 10,575 17,843 225 160,270 28,418 1,818 57,959 (2,676) 2,676 2,676 1,818 57,959 - 32,877 403,587 - $ 34,695 $ 461,546 $ - 59 Special Revenue Capital Project 26,264 729 12,162 - 35,757 108,690 - - - 173 81,378 - - - 22,414 12,162 - 35,757 239,648 (7,157) 3,284 7,135 (239,648) - 186,534 - 729 - 167,409 - 173 - 99,221 - 22,414 - 476,480 105,410 (73,875) 300,000 1,955 304,631 - - 300,000 1,955 304,631 (7,157) 3,284 7,135 60,352 107,365 230,756 18,456 24,984 59,062 240,222 286,014 1,065,202 $ 11,299 $ 28,268 $ 66,197 $ 300,574 $ 393,379 $ 1,295,958 Total Nonmajor Officer Inmate Fire -Police Capital Community Governmental Training Security Athletic League Equipment Development Funds $ - $ - $ - $ - $ - $ 217,779 - - - - - 25,742 5,005 3,284 - - - 10,332 - - 36,356 - - 36,806 - - 6,536 - - 6,536 - - - - 105,410 105,410 5,005 3,284 42,892 - 105,410 402,605 26,264 729 12,162 - 35,757 108,690 - - - 173 81,378 - - - 22,414 12,162 - 35,757 239,648 (7,157) 3,284 7,135 (239,648) - 186,534 - 729 - 167,409 - 173 - 99,221 - 22,414 - 476,480 105,410 (73,875) 300,000 1,955 304,631 - - 300,000 1,955 304,631 (7,157) 3,284 7,135 60,352 107,365 230,756 18,456 24,984 59,062 240,222 286,014 1,065,202 $ 11,299 $ 28,268 $ 66,197 $ 300,574 $ 393,379 $ 1,295,958 (THIS PAGE LEFT BLANK INTENTIONALLY) City of Riverside, Missouri Combining Schedule of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds Budget to Actual For the Year Ended June 30, 2016 Revenues: Taxes, tourism tax Recreation fees Total revenues Expenditures: Current: Administrative and support Revenues over expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year ril Tourism Tax Fund Budget Actual $ 175,000 $ 217,779 - 450 175,000 218,229 175,000 160,270 57,959 $ - 57,959 403,587 $ 461,546 City of Riverside, Missouri Combining Schedule of Revenues, Expenditures and Changes in Fund Balances Capital Project Funds Budget to Actual For the Year Ended June 30, 2016 62 Capital Improvements Fund Community Development Fund Budget Actual Budget Actual Revenues: Gaming revenue $ 5,842,500 $ 6,569,566 $ - $ - Charges for services - 1,860 - - Investment earnings 400 112 400 - Intergovernmental revenue 1,200,000 457,772 - - Tax increment financing revenue - - 101,500 105,410 Developer contributions - 1,057,605 - - Total revenues 7,042,900 8,086,915 101,900 105,410 Expenditures: Current: Administrative and support - - - - Public safety administration - - - - Police services - - - - Fire services - - - - Public works - - - - Community development Capital outlay 4,724,700 2,768,726 650,000 - Total expenditures 4,724,700 2,768,726 650,000 - Revenues (under) expenditures 2,318,200 5,318,189 (548,100) 105,410 Other financing sources: Transfers in - - - 1,955 Transfers out (3,000,000) (2,300,000) - - Bond proceeds - - 1,100,000 - Total other financing sources (uses) (3,000,000) (2,300,000) 1,100,000 1,955 Net change in fund balance $ (681,800) 3,018,189 $ 551,900 107,365 Fund balance, beginning of year 544,497 286,014 Fund balance, end of year $ 3,562,686 $ 393,379 62 Capital Equipment Fund Budget Actual 31,500 26,264 - 729 115,000 108,690 - 173 106,000 81,378 30,000 22,414 282,500 239,648 (282,500) (239,648) 300,000 300,000 300,000 300,000 $ 17,500 60,352 240,222 $ 300,574 (THIS PAGE LEFT BLANK INTENTIONALLY) City of Riverside, Missouri Schedule of Revenues, Expenditures and Changes in Fund Balances Tax Increment Financing Debt Service Fund Budget to Actual For the Year Ended June 30, 2016 Revenues: Investment earnings Tax increment financing revenue Total revenues Expenditures: Current: Administrative and support Debt service: Principal Interest Total expenditures Revenues (under) expenditures Other financing sources (uses), Proceeds from sale - leaseback Transfers in Total other financing sources (uses) Changes in fund balance Fund balance, beginning of year Fund balance, end of year Budget $ 50,000 5,965,000 6,015,000 1,618,000 3,775,000 1,497,000 6,890,000 (875,000) $ (875,000) Actual $ 38,730 6,549,491 6,588,221 1,709,799 3,775,000 1,373,481 6,858,280 (270,059) 268,875 139,106 407,981 137,922 6,193,653 $ 6,331,575 City of Riverside, Missouri Statement of Changes in Assets and Liabilities - Agency Fund For the Year Ended June 30, 2016 Municipal Court Bond Account Assets: Cash and investments Liabilities: Due to others Balance Balance June 30, 2015 Additions Deletions June 30, 2016 $ 20,629 $ 50,479 $ 56,174 $ 14,934 $ 20,629 $ 50,479 $ 56,174 $ 65 14,934 Statistical Section This part of the City of Riverside's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. Contents Page Financial Trends 67-74 These schedules contain trend information to help the reader understand how the government's financial performance and well- being have changed over time. Revenue Capacity 75-79 These schedules contain information to help the reader assess the government's most significant local revenue source, the gaming revenue. Debt Capacity 80-81 These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. Demographic and Economic Information 82-83 These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. Operating Information 84-86 These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. City of Riverside, Missouri Net Position Last Ten Fiscal Years (Accrual Basis of Accounting) (unaudited) Note: The City adopted GASB Statement No. 68 in fiscal year 2015. Although beginning net position on the basic financial statements was restated, this schedule has not been adjusted for years prior to 2015. Note 2: Beginning with year 2014, the City reclassified the presentation of certain amounts previously presented as restricted. This schedule has not been adjusted for years prior to 2014. 67 Fiscal Year 2016 2015 2014 2013 Governmental Activities Net investment in capital assets $ 95,665,293 $ 95,152,969 $ 93,573,067 $ 97,455,751 Restricted 4,940,502 1,369,477 803,511 8,978,799 Unrestricted 590,015 (1,937,545) (1,482,081) (7,486,325) Total governmental activities net position $ 101,195,810 $ 94,584,901 $ 92,894,497 $ 98,948,225 Note: The City adopted GASB Statement No. 68 in fiscal year 2015. Although beginning net position on the basic financial statements was restated, this schedule has not been adjusted for years prior to 2015. Note 2: Beginning with year 2014, the City reclassified the presentation of certain amounts previously presented as restricted. This schedule has not been adjusted for years prior to 2014. 67 Fiscal Year 2012 2011 2010 2009 2008 2007 $ 87,447,540 $ 80,614,617 $ 61,176,406 $ 53,635,284 $ 48,718,762 $ 41,078,438 11,601,649 7,372,933 6,038,985 6,518,739 7,597,468 10,829,277 (440,616) 9,318,551 22,635,921 25,348,214 21,798,661 18,414,707 $ 98,608,573 $ 97,306,101 $ 89,851,312 $ 85,502,237 $ 78,114,891 $ 70,322,422 68 City of Riverside, Missouri Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (unaudited) Expenses Governmental activities Administrative and support Municipal court Public safety administration* Police services Operations support Fire services Public works Parks and recreation Community development Engineering* * Interest on long-term debt Total governmental activities expenses Program revenues Governmental activities Charges for services: Administrative and support Police services Public works Parks and recreation Community development Operating grants and contributions: Police services Public works Capital grants and contributions Total governmental activities program revenues Net (expense)/revenue governmental activities General revenue and other changes in net position Governmental activities Taxes Sales taxes Franchise taxes Tourism taxes Tax increment financing Unrestricted grants and contributions Interest on accounts Real estate income - gaming Gaming revenue Gain on purchase of bonds Gain on land lease Gain on sale of capital position Miscellaneous Total governmental activities Change in net position Governmental activities Fiscal Year 2016 2015 2014 2013 $ 3,519,978 $ 3,536,140 $ 3,361,653 $ 3,291,806 170,276 178,317 175,443 168,189 430,164 435,851 512,170 645,375 2,651,575 2,551,494 2,560,182 2,543,564 591,337 585,905 549,291 606,699 1,677,323 1,582,358 1,563,803 1,418,114 5,251,959 5,191,014 14,302,013 9,024,716 773,345 745,998 773,333 725,478 449,579 442,382 368,024 499,425 206,224 202,569 201,177 - 1,666,391 1,982,428 2,395,524 2,481,272 17,388,151 17,434,456 26,762,613 21,404,638 47,948 45,850 42,498 41,535 254,540 289,082 366,880 356,142 400,424 278,171 - 186,168 68,643 62,537 68,084 77,587 128,375 103,251 57,701 58,196 25,742 13,822 6,455 8,906 457,772 46,767 1,165,046 3,512,010 1,383,444 839,480 1,706,664 4,240,544 ######### (16,594,976) (25,055,949) (17,164,094) 1,697,356 1,378,151 1,445,549 1,397,363 813,186 716,542 714,460 651,528 217,779 184,262 166,584 169,910 6,654,901 5,123,842 3,883,538 3,335,920 348,521 371,948 254,291 238,557 87,952 89,580 47,676 51,762 4,394,870 4,182,418 4,060,295 4,155,181 6,569,566 6,303,001 6,399,850 7,133,275 1,300,452 1,094,726 1,843,665 1,153,512 141,443 111,632 186,313 26,529 22,226,026 19,556,102 19,002,221 18,313,537 $ 6,221,319 $ 2,961,126 $ (6,053,728) $ 1,149,443 *In fiscal year 2009, the public safety administration division was separated out of the police services division. **In fiscal year 2014, the engineering division was separated out of the community services division. Note: The City adopted GASB Statement No. 68 in fiscal year 2015. Although beginning net position on the basic financial statements was restated, this schedule has not been adjusted for years prior to 2015 Fiscal Year 2012 2011 2010 2009 2008 2007 $ 3,340,602 $ 3,167,034 $ 2,878,084 $ 2,439,544 $ 2,150,847 $ 2,694,557 163,037 151,884 144,889 139,254 128,042 145,539 555,516 474,639 462,810 460,205 - - 2,331,412 2,132,814 2,119,296 2,081,567 2,455,356 2,432,659 700,555 633,732 563,120 532,437 322,307 314,216 1,247,599 1,256,523 1,175,275 653,289 563,689 337,003 9,347,065 5,585,388 7,064,953 6,079,598 6,521,927 10,322,100 776,223 595,934 514,852 394,585 467,388 434,439 560,864 613,821 438,747 569,776 613,444 220,725 2,673,512 2,393,978 2,532,675 2,657,463 2,759,984 1,407,112 21,696,3 85 17,005,747 17,894,701 16,007,718 15,982,984 18,308,350 40,154 41,426 39,500 48,735 57,344 54,434 269,042 272,520 336,073 250,397 188,911 227,052 347,037 4,004,893 1,761,757 1,661,146 - - 66,564 54,281 57,851 34,102 22,279 24,370 47,773 25,695 26,265 42,540 48,474 43,235 32,747 12,122 14,710 19,403 29,303 45,604 - - - - 9,113 32,377 2,279,000 510,410 443,985 - 1,030,000 - 3,082,317 4,921,347 2,680,141 2,056,323 1,385,424 427,072 (18,614,068) (12,084,400) (15,214,560) (13,951,395) (14,597,560) (17,881,278) 1,358,640 1,256,558 1,207,371 1,162,363 1,264,328 1,301,457 587,217 583,266 605,841 505,060 614,565 437,693 173,663 176,958 175,603 178,053 182,475 52,028 2,615,532 2,531,727 2,322,386 2,422,337 2,190,264 1,922,001 287,393 297,315 288,481 290,614 271,772 292,251 187,308 274,702 413,453 1,624,693 3,554,557 2,244,178 4,424,307 4,972,759 4,876,918 5,079,236 5,049,125 4,913,928 8,528,022 9,333,622 9,550,347 9,718,310 9,170,049 8,550,830 - 120,000 20,000 341,800 - - 325,557 51,263 - - - - 1,410,165 18,736 44,782 103,235 16,275 92,894 25,310 19,916,540 19,642,952 19,563,635 21,338,741 22,390,029 19,739,676 $ 1,302,472 $ 7,558,552 $ 4,349,075 $ 7,387,346 $ 7,792,469 $ 1,858,398 70 City of Riverside, Missouri Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (unaudited) Total all other governmental funds $ 11,197,651 $ 7,803,352 $ 6,923,593 $ 9,034,040 $ 11,755,164 71 Fiscal Year 2016 2015 2014 2013 2012 General fund Unassigned $ 6,328,625 $ 5,585,914 $ 5,564,281 $ 7,391,475 $ 12,642,233 Total general fund $ 6,328,625 $ 5,585,914 $ 5,564,281 $ 7,391,475 $ 12,642,233 All other governmental funds Restricted for: Debt service $ 5,956,575 $ 6,193,653 $ 5,945,362 $ 6,466,375 $ 5,327,671 Capital improvements 3,945,118 544,497 98,722 1,867,992 4,200,664 Community development 393,379 286,014 184,514 145,884 1,618,153 Law enforcement 140,459 135,379 128,051 106,265 76,991 Tourism 461,546 403,587 392,224 392,283 378,170 Committed for, capital projects 300,574 240,222 174,720 55,241 153,515 Total all other governmental funds $ 11,197,651 $ 7,803,352 $ 6,923,593 $ 9,034,040 $ 11,755,164 71 Fiscal Year 2011 2010 2009 2008 2007 $ 22,822,235 $ 25,730,000 $ 28,304,417 $ 34,169,319 $ 33,106,575 $ 22,822,235 $ 25,730,000 $ 28,304,417 $ 34,169,319 $ 33,106,575 $ 5,712,998 $ 5,819,205 $ 6,318,578 $ 5,783,385 $ 5,309,363 284,563 7,165,710 14,452,483 25,249,399 37,847,937 985,069 3,439,590 4,057,846 2,819,163 2,999,512 68,250 59,645 77,775 80,031 14,062 322,053 296,299 315,274 262,967 75,968 106,335 329,317 647,410 413,319 149,187 $ 7,479,268 $ 17,109,766 $ 25,869,366 $ 34,608,264 $ 46,396,029 72 City of Riverside, Missouri Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (unaudited) Fiscal Year 2016 2015 2014 2013 2012 Revenues Taxes $ 2,728,321 $ 2,278,955 $ 2,326,593 $ 2,218,801 $ 2,119,520 Intergovernmental revenue 832,035 432,537 1,080,549 3,496,318 1,399,140 Charges for services 1,860 28,173 345,243 186,168 347,037 Investment earnings 87,952 89,580 47,676 51,762 187,308 Real estate income - gaming 4,394,870 4,182,418 4,060,295 4,155,181 4,424,307 Gaming revenue 6,569,566 6,303,001 6,399,850 7,133,275 8,528,022 Licenses and fees 176,323 149,101 100,199 99,731 87,927 Fines and forfeitures 254,540 289,082 366,880 356,142 269,042 Recreation fees 68,643 62,537 68,084 77,587 66,546 Miscellaneous 40,145 12,194 138,950 26,429 18,736 TIF revenue 6,654,901 5,123,842 3,883,538 3,432,013 2,519,439 Developer contribution 1,057,605 1,717,957 1,396,227 2,540,649 1,757,460 Proceeds from sale-leaseback 268,875 494,745 367,115 405,087 1,681,691 Total revenues 23,135,636 21,164,122 20,581,199 24,179,143 23,406,175 Expenditures Administrative and support 3,556,565 3,505,623 3,296,734 3,166,187 3,203,812 Municipal court 170,866 177,974 172,938 166,973 161,947 Public safety administration** 424,178 439,051 512,201 617,544 590,283 Police services 2,332,919 2,242,909 2,282,508 2,241,434 2,060,787 Operations support 588,216 594,077 545,778 594,086 674,363 Fire services 1,569,336 1,563,418 1,497,050 1,331,481 1,182,911 Public works 1,510,818 1,400,168 1,469,270 1,548,537 1,202,728 Parks and recreation 642,074 585,065 617,043 598,104 661,711 Community development 469,676 440,189 366,814 488,233 553,536 Engineering* 199,203 198,042 194,649 - - Capital outlay 2,386,294 4,455,505 7,808,465 16,861,669 14,402,799 Principal 3,775,000 3,190,000 3,665,000 3,395,000 5,060,000 Interest 1,373,481 1,470,709 1,870,256 2,012,606 2,161,639 Bond issuance costs - 106,758 - 79,419 Total expenditures 18,998,626 20,262,730 24,405,464 33,021,854 31,995,935 Excess of revenues over (under) expenditures 4,137,010 901,392 (3,824,265) (8,842,711) (8,589,760) Other financing sources (uses) Transfers in 3,118,737 3,504,604 4,504,978 5,908,490 11,042,374 Transfers out (3,118,737) (3,504,604) (4,504,978) (5,908,490) (11,042,374) Issuance of TIF bonds - - 7,640,000 - 2.385,000 Payment to refunded bond escrow agent - - (8,065,827) - - Sale of capital assets - - - 870,829 282,826 Premium on bonds issuance - - 312,451 - 17,810 Discount on bonds issuance - - - - - Total other financing sources (uses) - - (113,376) 870,829 2,685,636 Net change in fund balances $ 4,137,010 $ 901,392 $ (3,937,641) $ (7,971,882) $ (5,904,124) Debt service as a percentage of noncapital expenditures 29% 27% 30% 25% 31% *In fiscal year 2014, the engineering division was separated out of the community development division. **In fiscal year 2009, the public safety administration division was separated out of the police services division 73 Fiscal Year 2011 2010 2009 2008 2007 $ 2,152,052 $ 1,853,545 $ 1,845,476 $ 2,061,368 $ 1,791,178 809,437 316,176 310,017 310,188 370,232 4,060,752 1,705,898 1,661,146 - - 274,702 413,453 1,624,693 3,554,557 2,244,178 4,972,759 4,876,918 5,079,236 5,049,125 4,913,928 9,333,622 9,550,347 9,718,310 9,170,049 8,550,830 67,121 65,765 91,275 105,818 97,669 272,520 336,073 250,397 188,911 227,052 54,281 57,851 34,102 22,279 24,370 44,782 103,235 16,275 92,894 25,310 2,531,727 2,322,386 2,422,337 2,190,264 1,922,001 762,300 - - - - 25,336,055 21,601,647 23,053,264 22,745,453 20,166,748 3,101,376 2,845,019 2,329,588 2,106,530 2,595,393 151,678 143,329 138,671 127,247 145,525 500,781 468,776 447,162 - - 2,083,386 2,059,677 1,957,651 2,370,824 2,156,671 607,814 574,827 504,515 369,433 296,153 1,173,397 1,140,734 590,159 501,427 387,864 1,225,402 1,271,986 1,045,468 796,276 832,589 592,584 506,783 406,136 382,808 307,784 467,172 448,632 575,992 610,839 218,351 21,080,414 18,557,731 23,436,065 18,862,799 16,678,172 4,340,000 2,275,000 3,548,200 1,880,000 940,000 2,420,314 2,539,407 2,677,457 2,762,291 937,915 - - - - 996,670 37,874,318 32,831,901 37,657,064 30,770,474 26,493,087 (13,300,563) (11,230,254) (14,603,800) (8,025,021) (6,326,339) 5,844,652 4,736,748 7,269,467 2,043,799 10,083,923 (5,844,652) (4,736,748) (7,269,467) (2,043,799) (10,083,923) 40,265,000 - 846,479 (62,500) 762,300 - - - 41,048,979 $(12,538,263) $ (11,230,254) $(14,603,800) $ (8,025,021) $ 34,722,640 35% 27% 34% 28% 11% 74 Fiscal Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 City of Riverside, Missouri Tax Revenues by Source Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (unaudited) Sales Tax 1,301,457 1,264,328 1,162,363 1,207,371 1,256,558 1,358,640 1,397,363 1,445,549 1,378,151 1,697,356 75 Franchise Tax 437,693 614,565 505,060 470,571 583,266 587,217 651,528 714,460 716,542 813,186 Tourism Tax 52,028 182,475 178,053 175,603 176,958 173,663 169,910 166,584 184,262 217,779 Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 City of Riverside, Missouri Direct and Overlapping Sales Tax Rates Last Ten Fiscal Years (unaudited) City 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 * Source: Missouri Department of Revenue County* 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 State* 4.225 4.225 4.225 4.225 4.225 4.225 4.225 4.225 4.225 4.225 Total 6.600 6.600 6.600 6.600 6.600 6.600 6.600 6.600 6.600 6.600 Fiscal Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 City of Riverside, Missouri Gaming Revenue and Real Estate Income Last Ten Fiscal Years (Modified Accrual Basis of Accounting)* (unaudited) Gaming Revenue 8,550,830 9,170,049 9,718,310 9,550,347 9,333,622 8,528,022 7,133,275 6,399,850 6,303,001 6,549,491 Real Estate Income 4,913,928 5,049,125 5,079,236 4,876,918 4,972,759 4,424,307 4,155,181 4,060,295 4,182,418 4,394,870 Total 13,464,758 14,219,174 14,797,546 14,427,265 14,306,381 12,952,329 11,288,456 10,460,145 10,485,419 10,944,361 *In FY 2012, a fifth casino was opened in the Kansas City metropolitan area. Fiscal Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 City of Riverside, Missouri Gaming Revenue Rates Last Ten Fiscal Years (unaudited) Admission Fee $1 per patron $1 per patron $1 per patron $1 per patron $1 per patron $1 per patron $1 per patron $1 per patron $1 per patron $1 per patron Source: Missouri Gaming Commission 77 % of Adjusted Gross Revenue 2.0% 2.0% 2.1% 2.1% 2.1% 2.1% 2.1% 2.1% 2.1% 2.1% City of Riverside, Missouri Riverside Argosy Casino Kansas City Market Share Last Ten Fiscal Years (unaudited) Source: Missouri Gaming Commission & Kansas Gaming Commission *In FY 2012, a fifth casino was opened in the Kansas City metropolitan area. 78 Percentage of Adjusted Fiscal Year Gross Receipts 2007 23.83% 2008 26.04% 2009 27.48% 2010 27.31% 2011 27.16% 2012 24.14% 2013 20.36% 2014 19.77% 2015 19.34% 2016 20.91% Source: Missouri Gaming Commission & Kansas Gaming Commission *In FY 2012, a fifth casino was opened in the Kansas City metropolitan area. 78 City of Riverside, Missouri Ratios of Outstanding Debt Last Ten Fiscal Years (unaudited) * See the Schedule of Demographic and Economic Statistics on page 83 for personal income and population data. 79 Percentage Fiscal TIF of Personal Per Year Bonds Income* Capita* 2007 57,650,000 45.81% 19,070 2008 55,770,000 40.26% 18,309 2009 51,880,000 38.62% 16,817 2010 49,585,000 38.67% 16,808 2011 45,125,000 33.42% 15,148 2012 42,450,000 30.04% 14,089 2013 39,055,000 26.87% 12,834 2014 35,360,000 23.21% 11,425 2015 32,896,406 20.55% 10,345 2016 29,025,580 17.74% 9,128 * See the Schedule of Demographic and Economic Statistics on page 83 for personal income and population data. 79 Direct Debt: City of Riverside Overlapping Debt: Platte County, Missouri Park Hill School District Total overlapping debt Total direct and overlapping debt City of Riverside, Missouri Direct and Overlapping Debt As of June 30, 2016 (unaudited) Estimated Outstanding Percentage Debt Applicable (1) 29,025,580 100.0% 43,525,058 87,007,229 130,532,287 159,557,867 Estimated Share of Overlapping Debt Assessed Valuation 29,025,5 80 108,014,5 89 4.9% 2,119,326 7.2% 6,271,219 8,390,544 37,416,124 (1) Determined by ratio of assessed value in overlapping unit compared to the taxable assessed value within the corporate limits of the City of Riverside. 80 2,218,319,502 1,498,600,310 City of Riverside, Missouri Pledged -Revenue Coverage Last Ten Fiscal Years (unaudited) Fiscal TIF Debt Service Year Revenues Principal Interest Coverage 2007 1,922,001 940,000 1,407,112 0.82 2008 2,190,264 1,880,000 2,759,983 0.47 2009 2,422,337 3,548,200 2,677,457 0.39 2010 2,278,764 2,275,000 2,539,407 0.47 2011 2,469,629 4,340,000 2,420,314 0.37 2012 * 2,406,697 2,675,000 2,161,639 0.50 2013 3,334,312 3,395,000 2,012,606 0.62 2014 ** 3,773,369 3,665,000 1,870,256 0.68 2015 5,018,593 3,190,000 1,470,709 1.08 2016 6,549,491 3,775,000 1,373,481 1.27 *In 2012, the City issued $2,385,000 of bonds to refund the 1998, 1999 and 2002 Tax Increment Financing Revenue Bonds, which has been excluded from above principal payments. **In 2014, the City issued $7,640,000 of bonds to refund the 2004 Tax Increment Financing Revenue Bonds, which has been excluded from above principal payments. 81 City of Riverside, Missouri Demographic and Economic Statistics Last Ten Fiscal Years (unaudited) Sources: (a) Mid-America Regional Council Research Services - (www.metrodataline.org) (b) U.S. Bureau of Economic Analysis (c) American Community Survey (d) U.S. Department of Labor for Platte County, Missouri 1*1 Per Capita Total Median Personal Personal Family Unemployment Population Income Income Income Rate Fiscal Year (a) (b) (b) (c) (d) 2007 3,023 41,627 125,838,421 64,907 3.9% 2008 3,046 45,474 138,513,804 64,347 4.1% 2009 3,085 43,539 134,317,815 65,383 5.1% 2010 2,950 43,463 128,215,850 65,948 7.8% 2011 2,979 45,320 135,008,280 66,487 7.2% 2012 3,013 46,893 141,288,609 67,419 5.8% 2013 3,043 47,771 145,367,153 67,721 6.0% 2014 3,095 49,232 152,373,040 68,638 5.5% 2015 3,180 50,328 160,043,612 70,166 4.7% 2016 3,180 51,447 163,601,030 71,726 4.6% Sources: (a) Mid-America Regional Council Research Services - (www.metrodataline.org) (b) U.S. Bureau of Economic Analysis (c) American Community Survey (d) U.S. Department of Labor for Platte County, Missouri 1*1 Employer Adient/Hoover Universal Argosy Casino Yanfeng USA U.S. Farathane Martinrea Riverside Capital Electric ABC Employment Holdings Park Hill School District Woodbridge Northpoint Development Co. Alpine Nursing/Rehab Center Faurecia/ Riverside Seat Company Knappco/Civacon Corner Cafd Red X Apria Medical Intercontinental Engineering Total City of Riverside, Missouri Principal Employers Current Year and Nine Years Ago (unaudited) Employees 755 750 586 381 375 355 277 160 153 120 3,157 2016 Rank 1 2 3 4 5 6 7 8 9 10 Percentage of Percentage of Total City Total City Employment Employees 11.4% - 11.3% 934 8.9% - 5.8% - 5.7% - 5.4% - 4.2% - 2.4% 160 2.3% 164 1.8% - 0.0% 167 0.0% 144 0.0% 142 0.0% 120 0.0% 105 0.0% 100 0.0% 79 47.8% 2,115 Source: City of Riverside city clerk business license database. 83 2007 Jo.V70 Percentage of Total City Rank Employment - 0.0% 1 24.8% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% 4 4.2% 3 4.4% - 0.0% 2 4.4% 5 6.2% 6 3.8% 7 3.2% 8 2.7% 9 2.8% 10 2.1% Jo.V70 City of Riverside, Missouri Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years (unaudited) 84 Fiscal Year 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Function General government 8 8 7 7 8 8 7 7 7 7 Municipal court 1 1 1 1 1 1 1 1 1 1 Public safety Public safety administration 2 2 3 3 3 3 3 3 - - Police Officers 24 24 25 25 25 24 24 24 25 23 Civilians - - - - - - - - 1 1 Operations support 11 11 11 10 10 10 10 8 6 6 Fire 14 14 14 14 14 14 14 11 3 1 Public works 9 9 9 9 8 8 8 8 8 9 Engineering 2 2 2 - - - - - - - Parks & recreation 2 2 2 2 2 2 2 2 2 2 Community development 5 5 4 7 5 5 5 4 4 4 Total 78 78 78 78 76 75 74 68 57 54 Source: City of Riverside operating budget documents 84 City of Riverside, Missouri Operating Indicators by Function/Program Last Ten Fiscal Years (unaudited) Note: Data is not available for the fire services division prior to 2007. 85 Fiscal Year 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Function/Program Police Services*: Traffic & ordinance citations 2,898 2,062 2,965 3,225 2,825 2,180 3,491 2,667 3,798 2,939 Municipal & state arrests 1,044 1,335 1,298 1,328 1,151 1,023 1,293 1,018 901 1,067 Fire Services* Structure fires 9 8 10 13 5 7 9 8 5 9 Calls for service 1,387 1,084 1,048 1,049 1,105 1,075 943 788 487 293 Inspections conducted 533 590 568 535 418 416 397 479 354 5 Building Codes**: Commercial building permits 4 7 34 45 32 19 17 25 20 9 Residential building permits 42 22 40 65 24 15 19 23 20 49 *Source: City of Riverside public safety department * * Source: City of Riverside community development department Note: Data is not available for the fire services division prior to 2007. 85 City of Riverside, Missouri Capital Asset Statistics by Function/Program Last Ten Fiscal Years (unaudited) 86 Fiscal Year 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Function/Program Police stations* 1 1 1 1 1 1 1 1 1 1 Fire stations* 1 1 1 1 1 1 1 1 1 1 Parks & recreation** Acreage 73 73 73 73 73 73 73 73 73 73 Parks 3 3 3 3 3 3 3 3 3 3 Softball/baseball diamonds 1 1 1 1 1 1 1 1 1 1 Skateboard parks 1 1 I 1 1 1 1 1 1 1 Community center 1 1 1 1 I 1 1 1 1 1 Pools I 1 1 1 1 1 1 1 1 1 Lane miles maintained by City*** 69 69 68 65 63 59 59 59 58 55 *Source: City of Riverside public safety department ** Source: City of Riverside parks and recreation division ***Source: City of Riverside public works department 86 (THIS PAGE LEFT BLANK INTENTIONALLY) APPENDIX C DEFINITIONS OF WORDS AND TERMS AND SUMMARIES OF CERTAIN LEGAL DOCUMENTS (THIS PAGE LEFT BLANK INTENTIONALLY) APPENDIX C DEFINITIONS OF WORDS AND TERMS AND SUMMARIES OF CERTAIN LEGAL DOCUMENTS DEFINITIONS OF WORDS AND TERMS In addition to words and terms defined elsewhere in this Official Statement, the following are definitions of certain words and terms used in the Indenture, the Financing Agreement, the Authorizing Ordinance, the Continuing Disclosure Agreement and this Official Statement unless the context clearly otherwise requires. Reference is hereby made to the Indenture for complete definitions of all terms. "Act" means under the Missouri Industrial Development Corporation Act, Chapter 349 of the Revised Statutes of Missouri, as from time to time amended. "Additional Bonds" means any additional parity Bonds issued by the Authority pursuant to Section 203 of this Indenture that stand on a parity and equality under this Indenture with the Series 2017 Bonds (except with respect to the Series 2017 Debt Service Reserve Fund). "Additional Payments" means the Additional Payments described in the Financing Agreement. "Annual Report" means any Annual Report filed by the City pursuant to, and as described in, the Continuing Disclosure Agreement. "Authority Representative" means the Chairman, Vice Chairman, President, Vice President or Executive Director of the Authority, and any other duly authorized officer of the Authority whose authority to execute any particular instrument or take a particular action under the Indenture or the Financing Agreement shall be evidenced by a written certificate furnished to the City and the Trustee containing the specimen signature of such person or persons and signed on behalf of the Authority by its Chairman, President or Executive Director. "Authorizing Ordinance" means Ordinance No. of the City passed on October 17, 2017. "Beneficial Owner" means any Registered Owner of any Bonds and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Bond" or "Bonds" means the Series 2017 Bonds and any Additional Bonds issued pursuant to the Indenture. "Bond Issuance Date" means November _, 2017. "Business Day" (i) with respect to the Indenture, means a day on which the Trustee and any Paying Agent shall be scheduled in the normal course of its operations to be open to the public for conduct of its banking operations and (ii) with respect to the Continuing Disclosure Agreement, means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal corporate trust office or designated payment office of the Bond Trustee or the Dissemination Agent is located are required or authorized by law to remain closed, or (c) a day on which the Securities Depository or the New York Stock Exchange is closed. C-1 "Cede & Co." means Cede & Co., as nominee of The Depository Trust Company, New York, New York. "City Representative" means the Mayor, City Administrator, the Director of Finance or the City Attorney, and any other duly authorized official of the City whose authority to execute any particular instrument or take a particular action under the Indenture or the Financing Agreement shall be evidenced by a written certificate furnished to the Authority and the Trustee containing the specimen signature of such person or persons and signed on behalf of the City by the City Administrator. "Continuing Disclosure Agreement" the Continuing Disclosure Agreement dated as of November 1, 2017, by and between the City and UMB Bank, N.A., as dissemination agent, for the benefit of holders of the Bonds, as from time to time amended in accordance with the provisions thereof. "Cooperation Agreement" means the Cooperation Agreement dated as of January 12, 2017, among the City, the Authority, UMB Bank, N.A., as trustee, Platte County, Missouri and the Riverside-Quindaro Bend Levee District of Platte County, Missouri, as amended from time to time in accordance with the provisions thereof. "Costs of Issuance" means issuance costs with respect to the Bonds, including but not limited to the following: (a) underwriter's spread (whether realized directly or derived through purchase of Bonds at a discount below the price at which they are expected to be sold to the public); (b) counsel fees (including bond counsel, disclosure counsel, City's counsel, as well as any other specialized counsel fees incurred in connection with the borrowing); (c) financial advisor fees of any financial advisor to the Authority or the City incurred in connection with the issuance of the Bonds; (d) rating agency fees; (e) trustee, escrow agent and paying agent fees; (f) accountant fees and other expenses related to issuance of the Bonds; (g) printing costs (for the Bonds and of the preliminary and final Official Statement relating to the Bonds); and (h) fees and expenses of the Authority incurred in connection with the issuance of the Bonds. "Costs of Issuance Fund" means the fund by that name created by the Indenture. "Debt Service Fund" means the fund by that name created by the Indenture. "Debt Service Reserve Fund" means the fund by that name created by the Indenture. "Debt Service Reserve Fund Requirement" means with respect to the Series 2017 Bonds, the amount of $1,000,000. C-2 "Default" means any event or condition which constitutes, or with the giving of any requisite notice or upon the passage of any requisite time period or upon the occurrence of both would constitute, an Event of Default. "Defeasance Obligations" means: (a) Government Obligations which are not subject to redemption prior to maturity; or (b) Cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with Government Obligations). "Dissemination Agent" means UMB Bank, N.A., acting in its capacity as Dissemination Agent under the Continuing Disclosure Agreement, or any successor Dissemination Agent designated in writing by the City. "Economic Activity Tax Revenues" means the revenues attributable to 50% of the increase in tax revenues (other than real property tax revenues) generated by economic activities within the Redevelopment Area, including sales and utility taxes, but excluding personal property taxes, hotel/motel taxes, licenses, fees and special assessments. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Environmental Regulations" means any federal, state or local law, statute, code, ordinance, regulation, requirement or rule defining and governing dangerous, toxic or hazardous pollutants, contaminants, chemicals, materials, or substances. "Escrow Agent" means UMB Bank, N.A., as Trustee and Paying Agent for the Refunded Bonds. "Escrow Agreement" means the Escrow Letter of Instructions from the City and the Authority to the Trustee dated the date of issuance of the Series 2017 Bonds and related to the refunding of the Refunded Bonds. "Escrow Fund" means the fund by that name created under the Escrow Agreement. "Event of Default" means any event of default as defined in the Indenture. "Event of Nonappropriation" means failure of the City to budget and appropriate on or before the last day of any Fiscal Year, moneys sufficient to pay the Financing Payments and reasonably expected Additional Payments due and payable during the next Fiscal Year. "Financing" means the Authority making the proceeds of the Series 2017 Bonds available to the City pursuant to the Financing Agreement. "Financing Agreement" means the Financing Agreement dated as of November 1, 2017, between the Authority and the City as from time to time amended by Supplemental Financing Agreements in accordance with the provisions of the Financing Agreement. "Financing Payment Date" means on or before the Business Day preceding the date any payment is due on the Series 2017 Bonds. "Financing Payments" means the payments of principal and interest on the Financing referred to in Section 3.2 of the Financing Agreement. C-3 "Fiscal Year" (i) with respect to the Indenture, means the City's fiscal year, which is currently July 1 to June 30, or as it may be defined by the City and (ii) with respect to the Continuing Disclosure Agreement, means the 12 -month period beginning on July 1 and ending on June 30 or any other 12 -month period selected by the City as the Fiscal Year of the City for financial reporting purposes. "Government Obligations" means the following: (a) bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed by, the United States of America; and (b) evidences of direct ownership of a proportionate or individual interest in future interest or principal payments on specified direct obligations of, or obligations the payment of the principal of and interest on which are unconditionally guaranteed by, the United States of America, which obligations are held by a bank or trust company organized and existing under the laws of the United States of America or any state thereof in the capacity of custodian in form and substance satisfactory to the Trustee. "Incremental Tax Revenues" means revenues which consist of (a) PILOTS derived from the Redevelopment Area, (b) Economic Activity Tax Revenues received by the City with respect to the Redevelopment Area and (c) the New State Revenues received by the City with respect to the Redevelopment Area. "Indenture" means the Bond Trust Indenture as originally executed by the Authority and the Trustee, as from time to time amended and supplemented by Supplemental Indentures in accordance with the provisions of the Indenture. "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended, and, when appropriate, any statutory predecessor or successor thereto, and all applicable regulations (whether proposed, temporary or final) thereunder and any applicable official rulings, announcements, notices, procedures and judicial determinations relating to the foregoing. "Material Events" means any of the events listed in the Continuing Disclosure Agreement. "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Trustee. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "New State Revenues" means revenue appropriated each year by the General Assembly of the State of Missouri pursuant to the State Supplemental Tax Increment Financing Program Amended Certificate of Approval. "Officer's Certificate" means a written certificate in the form described in the Indenture of the City by the City Representative, which certificate shall be deemed to constitute a representation of, and shall be binding upon, the City with respect to matters set forth therein, and which certificate in each instance, including the scope, form, substance and other aspects thereof, is acceptable to the Trustee. C-4 "Opinion of Bond Counsel" means a written opinion in the form described the Indenture of any legal counsel acceptable to the Authority and the Trustee who shall be nationally recognized as expert in matters pertaining to the validity of obligations of governmental issuers and the exemption from federal income taxation of interest on such obligations. "Opinion of Counsel" means a written opinion in the form described in the Indenture of any legal counsel acceptable to the City and the Trustee and, to the extent the Authority is asked to take action in reliance thereon, the Authority, who may be an employee of or counsel to the Trustee or the City. "Original Purchaser" means Stifel, Nicolaus & Company, Incorporated, underwriter of the Series 2017 Bonds. "Outstanding" means when used with respect to Bonds, as of the date of determination, all Bonds theretofore authenticated and delivered under the Indenture, except: (1) Bonds theretofore cancelled by the Trustee or delivered to the Trustee for cancellation as provided in the Indenture; (2) Bonds for whose payment or redemption money or Government Obligations in the necessary amount has been deposited with the Trustee or any Paying Agent in trust for the owners of such Bonds as provided in the Indenture, provided that, if such Bonds are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture or provision therefor satisfactory to the Trustee has been made; (3) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered under the Indenture; and (4) Bonds alleged to have been destroyed, lost or stolen which have been paid as provided in the Indenture. "Participants" means those financial institutions for whom the Securities Depository effects book -entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. "Participating Underwriter" means any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Paying Agent" means the Trustee and any other commercial bank or trust institution organized under the laws of any state of the United States of America or any national banking association designated pursuant to the Indenture or any Supplemental Indenture as paying agent for any series of Bonds at which the principal of, redemption premium, if any, and interest on such Bonds shall be payable. "Payments in Lieu of Taxes" or "PILOTS" means those revenues attributable to the increase in the assessed valuation of real property within the Redevelopment Area over and above the initial assessed valuation of real property in the Redevelopment Area as of the date on which tax increment financing for the Redevelopment Area was adopted, which increase is multiplied by the then -current aggregate tax rate applicable to such property to determine the amount of PILOTS due. "Permitted Investments" means, if and to the extent the same are at the time legal for investment of funds held under the Indenture: (1) cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in paragraph (2) below); C-5 (2) direct obligations of (including obligations issued or held in book entry form on the books of) the Department of Treasury of the United States of America; (3) obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: - Export - Import Bank, - Farm Credit System Financial Assistance Corporation, - Rural Economic Community Development Administration (formerly the Farmers Home Administration), - General Services Administration, - U.S. Maritime Administration, - Small Business Administration, - Government National Mortgage Association (GNMA), - U.S. Department of Housing & Urban Development (PHA's), - Federal Housing Administration, and - Federal Financing Bank; (4) direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: Senior debt obligations rated at least as high as the sovereign debt rating of the United States by Moody's and "AAA" by Standard & Poor's issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC), Obligations of the Resolution Funding Corporation (REFCORP), and Senior debt obligations of the Federal Home Loan Bank System; (5) U.S. dollar denominated deposit accounts, federal funds and banker's acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "A-1" or "A-1+" by Standard & Poor's and "P-1" by Moody's and maturing no more than 360 days after the date of purchase (ratings on holding companies are not considered as the rating of the bank); (6) commercial paper which is rated at the time of purchase in the single highest classification, "A-1+" by Standard & Poor's and "P-1" by Moody's and which matures not more than 270 days after the date of purchase; (7) investments in a money market fund rated "AAAm" or "AAAm-G" by Standard & Poor's; (8) "Pre -refunded Municipal Obligations," defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (A) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of Standard & Poor's and Moody's or any successors thereto; or (B) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (2) above, which escrow may be applied only to the payment of such principal of and interest and C-6 redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to above, as appropriate; provided, however, that Pre -refunded Municipal Obligations meeting the requirements of this subsection (B) may not be used as Permitted Investments without the prior written approval of Standard & Poor's. (9) general obligations of states with a rating of at least "AVA" or higher by both Moody's and Standard & Poor's; and (10) investment agreements (supported by appropriate opinions of counsel) with notice to Standard & Poor's. The value, which shall be determined as of each date any payment is due on the Series 2017 Bonds, of the above investments shall be calculated as follows: (a) as to investments the prices of which are received by the Trustee from pricing services utilized by it in the ordinary course of its trust business, the price received from such services; (b) as to certificates of deposit and bankers acceptances: the face amount thereof; and (c) as to any investment not specified above: the value thereof established by prior agreement between the City and the Trustee. "Person" means any natural person, firm, association, corporation, partnership, limited liability company, joint stock company, a joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. "Prime Rate" means, for any date of determination, the interest rate per annum publicly announced from time to time by the Trustee as its "prime rate." "Rebate Fund" means the fund by that name created by the Indenture. "Record Date" means the 15th day (whether or not a Business Day) of the calendar month next preceding the month in which an interest payment on any Bond is to be made. "Redevelopment Area" means the area described as such in the Cooperation Agreement. "Refunded Bonds" means, collectively, the Series 2007A Bonds and the Series 2007B Bonds. "Replacement Bonds" means Bonds issued to the beneficial owners of the Bonds in accordance with the Indenture. "Rule" means Rule 15c2 -12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "Securities Depository" means, initially, The Depository Trust Company, New York, New York, and its successors and assigns. C-7 "Series 2007A Bonds" means the Authority's outstanding Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007A, issued in the original principal amount of $30,265,000. "Series 2007B Bonds" means the means the Authority's outstanding Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007B, issued in the original principal amount of $10,000,000. "Series 2011A Bonds" means the Authority's Tax Increment Refunding Revenue Bonds (L-385 Levee Project), Series 201 IA, issued in the original principal amount of $2,385,000. "Series 2014 Bonds" means the Authority's Tax Increment Refunding Revenue Bonds (L-385 Project), Series 2014, issued in the original principal amount of $7,640,000. "Series 2017 Bonds" means the Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017, aggregating the principal amount of $18,925,000, issued pursuant to the Indenture. "Series 2017 Levee District Bonds" means the Levee District Improvement Refunding Revenue Bonds (L-385 Project), Series 2017, issued by the Riverside-Quindaro Bend Levee District of Platte County, Missouri in the original aggregate principal amount of $12,620,000. "Special Allocation Fund" means the fund where the deposits of Incremental Tax Revenues pledged for Financing Payments are held. "Standard & Poor's" means Standard & Poor's Ratings Services, a Division of The McGraw Hill Companies, Inc., New York, New York, and its successors and assigns, and, if such firm shall be dissolved or liquidated or shall no longer perform the functions of a securities rating service, Standard & Poor's shall be deemed to refer to any other nationally recognized securities rating service designated by the City, with notice to the Authority and the Trustee. "Supplemental Financing Agreement" means any agreement supplemental or amendatory to the Financing Agreement entered into by the Authority and the City pursuant to the Financing Agreement. "Supplemental Indenture" means any indenture supplemental or amendatory to the Indenture entered into by the Authority and the Trustee pursuant to the Indenture. "Tax Compliance Agreement" means the Tax Compliance Agreement dated as of November 1, 2017, among the Authority, the City and the Trustee. "TIF Act" means the Real Property Tax Increment Allocation Redevelopment Act, Sections 99.800-99.865 of the Revised Statutes of Missouri, as amended. "Transaction Documents" means the Indenture, the Bonds, the Financing Agreement, the Official Statement relating to the Bonds, the Continuing Disclosure Agreement, the Tax Compliance Agreement, the Escrow Agreement, the Authorizing Ordinance and any and all other documents or instruments that evidence or are a part of the transactions referred to in the Indenture, the Financing Agreement or the Official Statement or contemplated by the Indenture, the Financing Agreement or the Official Statement; and any and all future renewals and extensions or restatements of, or amendments or supplements to, any of the foregoing; provided, however, that when the words "Transaction Documents" are used in the context of the authorization, execution, delivery, approval or performance of Transaction Documents by a particular party, the same shall mean only those Transaction Documents that provide for or contemplate authorization, execution, delivery, approval or performance by such party. C-8 "Trust Estate" means the Trust Estate described in the Granting Clauses of the Indenture. "Trustee" means UMB Bank, N.A., Kansas City, Missouri, and its successor or successors and any other corporation or association which at any time may be substituted in its place pursuant to and at the time serving as trustee under the Indenture. "Unassigned Authority's Rights" means the Authority's rights to reimbursement and payment of its costs and expenses under the Financing Agreement, its rights of access under the Financing Agreement, its rights to indemnify under the Financing Agreement, its rights to exemption from liability under the Financing Agreement, its rights to receive notices, reports and other statements and its rights to consent to certain matters. [Continues on following page] C-9 SUMMARY OF THE INDENTURE The following is a summary of certain provisions contained in the Indenture. The following is not a comprehensive description, however, and is quaked in its entirety by reference to the Indenture for a complete recital of the terms thereof. Trust Estate The Trust Estate created by the Indenture in favor of the Trustee for the benefit and security of the owners of the Bonds consists of: (a) All rights, title and interest of the Authority (including, but not limited to, the right to enforce any of the terms thereof) in, to and under (1) the Financing Agreement, including, without limitation, all Financing Payments and other payments to be received by the Authority and paid by the City under and pursuant to and subject to the provisions of the Financing Agreement (except the Authority's rights to payment of its fees and expenses and to indemnification as set forth in the Financing Agreement and as otherwise expressly set forth therein), and (2) all financing statements or other instruments or documents evidencing, securing or otherwise relating to the use of the proceeds of the Bonds; and (b) All moneys and securities (except moneys and securities held in the Rebate Fund) from time to time held by the Trustee under the terms of the Indenture; and (c) Any and all other property (real, personal or mixed) of every kind and nature from time to time, by delivery or by writing of any kind, pledged, assigned or transferred as and for additional security under the Indenture by the Authority or by anyone in its behalf or with its written consent, to the Trustee, which is thereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms thereof. The Trustee shall hold in trust and administer the Trust Estate, upon the terms and conditions set forth in the Indenture for the equal and pro rata benefit and security of each and every owner of Bonds, without preference, priority or distinction as to participation in the lien, benefit and protection of the Indenture of one Bond over or from the others, except as otherwise expressly provided therein. Authorization of Additional Bonds Additional Bonds may be issued under and equally and ratably secured by the Indenture on a parity (except as otherwise provided in the Indenture) with the Series 2017 Bonds and any other Additional Bonds at any time and from time to time, upon compliance with the conditions set forth in the Indenture and in the Financing Agreement, for any purpose authorized under the Act. Before any Additional Bonds are issued under the provisions of the Indenture, the Authority shall adopt a resolution (1) authorizing the issuance of such Additional Bonds, fixing the principal amount thereof and describing the purpose or purposes for which such Additional Bonds are being issued, (2) authorizing the Authority to enter into a Supplemental Indenture for the purpose of issuing such Additional Bonds and establishing the terms and provisions of such series of Bonds and the form of the Bonds of such series, (3) authorizing the Authority to enter into a Supplemental Financing Agreement with the City to provide for payments, which may be subject to annual appropriation, at least sufficient to pay the principal of, redemption premium, if any, and interest on the Bonds then to be Outstanding (including the Additional Bonds to be issued) as the same become due, and to extend the term of the Financing Agreement if the maturity of any of the Additional Bonds would otherwise occur after the expiration of the term of the Financing Agreement, and C-10 (4) providing for such other matters as are appropriate because of the issuance of the Additional Bonds, which matters, in the judgment of the Authority, are not prejudicial to the Authority or the owners of the Bonds previously issued. Such Additional Bonds shall have the same general title as the Series 2017 Bonds, except for an identifying project, series or date, and shall be dated, shall mature on such dates, shall be numbered, shall bear interest at such rates not exceeding the maximum rate then permitted by law payable at such times, and shall be redeemable at such times and prices (subject to the provisions of the Indenture), all as provided by the Supplemental Indenture authorizing the issuance of such Additional Bonds. Except as to any difference in the date, the maturities, the rates of interest or the provisions for redemption, such Additional Bonds shall be on a parity with and shall be entitled to the same benefit and security of the Indenture as the Series 2017 Bonds and any other Additional Bonds, provided that any Additional Bonds shall not be entitled to the benefit of the Series 2017 Debt Service Reserve Fund. Such Additional Bonds shall be executed in the manner set forth in the Indenture and shall be deposited with the Trustee for authentication, but prior to or simultaneously with the authentication and delivery of such Additional Bonds by the Trustee, and as a condition precedent thereto, there shall be filed with the Trustee the following: (a) A copy, certified by the Secretary or Assistant Secretary of the Authority, of the resolution adopted by the Authority authorizing the issuance of such Additional Bonds and the execution of the Supplemental Indenture, Supplemental Financing Agreement and supplements to any other Transaction Documents as may be necessary. (b) A copy, certified by the City Clerk of the ordinances and/or resolutions adopted by the City authorizing the execution and delivery of the Supplemental Financing Agreement and supplements to any other Transaction Documents. (c) An original executed counterpart of the Supplemental Indenture, executed by the Authority and the Trustee, authorizing the issuance of the Additional Bonds being issued, specifying, among other things, the terms thereof, and providing for the disposition of the proceeds of such Additional Bonds and the Supplemental Financing Agreement. (d) An original executed counterpart of the Supplemental Financing Agreement, executed by the City and the Authority, specifying, among other things, the principal amount, rate of interest, maturity and terms of optional prepayment. (e) An Officer's Certificate (1) stating that no event of default under the Financing Agreement has occurred and is continuing and that no event has occurred and is continuing which with the lapse of time or giving of notice, or both, would constitute such an event of default, and (2) stating the purpose or purposes for which such Additional Bonds are being issued and accompanied by the certificates, reports or opinions demonstrating compliance with the applicable tests set forth in the Financing Agreement. (f) A request and authorization to the Trustee, on behalf of the Authority, executed by a City Representative, to authenticate the Additional Bonds and deliver said Additional Bonds to the purchasers therein identified upon payment to the Trustee, for the account of the Authority, of the purchase price thereof. The Trustee shall be entitled to rely conclusively upon such request and authorization as to the names of the purchasers and the amounts of such purchase price. (g) If such Additional Bonds are to be insured or guaranteed by a bond insurer or other credit enhancer, an insurance policy or other credit enhancement in each case in form or substance satisfactory to the Authority, the City and the Trustee. C-11 (h) An Opinion of Bond Counsel to the effect that all requirements for the issuance of such Additional Bonds have been met and the issuance of such Additional Bonds will not result in the interest on any Bonds then Outstanding becoming includible in gross income for purposes of federal income taxation. (i) Such other certificates, statements, receipts and documents required by any of the Transaction Documents or as the Authority, the City or the Trustee shall reasonably require for the delivery of the Additional Bonds. When the documents specified above have been filed with the Trustee, and when such Additional Bonds have been executed and authenticated as required by the Indenture, the Trustee shall deliver such Additional Bonds to or upon the order of the purchasers thereof, but only upon payment to the Trustee of the purchase price of such Additional Bonds. The proceeds of the sale of such Additional Bonds, including accrued interest and premium thereon, if any, shall be immediately paid over to the Trustee and shall be deposited and applied by the Trustee as provided in the Indenture and in the Supplemental Indenture authorizing the issuance of such Additional Bonds. Creation of Funds and Accounts The Indenture creates and establishes in the custody of the Trustee the following special trust funds in the name of the Authority to be designated as follows: (a) "The Industrial Development Authority of the City of Riverside, Missouri—Riverside Horizons Project Costs of Issuance Fund" (the "Costs of Issuance Fund"), and within such fund separate accounts for each Series of Bonds, initially a "Series 2017 Costs of Issuance Account;" (b) "The Industrial Development Authority of the City of Riverside, Missouri—Riverside Horizons Project Debt Service Fund" (the "Debt Service Fund") and within such fund separate accounts for each Series of Bonds, initially a "Series 2017 Debt Service Account," and within each such account a subaccount for capitalized interest on such Series, if any; (c) The "The Industrial Development Authority of the City of Riverside, Missouri— Riverside Horizons Project Series 2017 Debt Service Reserve Fund" (the "Series 2017 Debt Service Reserve Fund"); and (d) "The Industrial Development Authority of the City of Riverside, Missouri—Riverside Horizons Project Rebate Fund" (the "Rebate Fund") and within such fund separate accounts for each Series of Bonds, initially a "Series 2075 Rebate Account." In addition, the Escrow Agreement establishes the Escrow Fund to be held and administered by the Escrow Agent in accordance with the provisions of the Escrow Agreement. Debt Service Fund The Trustee shall deposit and credit to the Debt Service Fund, as and when received, as follows: (a) The amounts required to be deposited therein under the Indenture, and all Financing Payments made by the City pursuant to the Financing Agreement; (b) Interest earnings and other income on Permitted Investments required to be deposited in the Debt Service Fund pursuant to the Indenture; C-12 (c) Any amounts required by a Supplemental Indenture authorizing the issuance of Additional Bonds to be deposited in the Debt Service Fund, as specified in such Supplemental Indenture; and (d) All other moneys received by the Trustee under and pursuant to any of the provisions of the Indenture or the Financing Agreement or any other Transaction Document, when accompanied by directions from the person depositing such moneys that such moneys are to be paid into the Debt Service Fund. Debt Service Reserve Fund The Trustee shall deposit into the Series 2017 Debt Service Reserve Fund, as and when received: (1) From the proceeds from the sale of the Series 2017 Bonds, an amount equal to the Series 2017 Debt Service Reserve Fund Requirement. (2) The amounts to be paid by the City pursuant to the Financing Agreement. (3) The earnings accrued on the investment of moneys in the Series 2017 Debt Service Reserve Fund and required to be deposited into the Series 2017 Debt Service Reserve Fund pursuant to the Indenture. (4) All other moneys received by the Trustee when accompanied by directions from the person depositing such moneys that such moneys are to be paid into the Series 2017 Debt Service Reserve Fund. (5) Moneys from the Sales Proceeds Account as described in the Indenture. Rebate Fund There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Tax Compliance Agreement. All amounts on deposit at any time in the Rebate Fund shall be held by the Trustee in trust to the extent required to pay rebatable arbitrage to the United States of America, and neither the City, the Authority nor the owner of any Bonds shall have any rights in or claim to such money. All amounts held in the Rebate Fund shall be governed by the Indenture and by the Tax Compliance Agreement (which are incorporated therein by reference). Investment of Moneys Moneys held in each of the funds and accounts under the Indenture shall, pursuant to written directions of the City Representative, or in the absence of such direction at the discretion of the Trustee, be invested and reinvested by the Trustee in accordance with the provisions of the Indenture and the Tax Compliance Agreement in Permitted Investments which mature or are subject to redemption by the owner thereof prior to the date such funds are expected to be needed. The Trustee may make any investments permitted by the provisions of the Indenture through its own bond department or short-term investment department or that of any affiliate of the Trustee and may pool moneys for investment purposes, except moneys held in any fund or account that are required to be yield restricted in accordance with the Tax Compliance Agreement, which shall be invested separately. Any such Permitted Investments shall be held by or under the control of the Trustee and shall be deemed at all times a part of the fund or account in which such moneys are originally held. The interest accruing on each fund or account and any profit realized from such Permitted Investments (other than any amount required to be deposited in the Rebate Fund pursuant to the Indenture) shall be credited to such fund or account, and any loss resulting from such Permitted Investments shall be charged to such fund or account; provided that if the most recent valuation of the amount invested in C-13 the Series 2017 Debt Service Reserve Fund equals or exceeds the Series 2017 Debt Service Reserve Requirement then all interest accruing thereon shall be automatically deposited into the Debt Service Fund. The Trustee shall sell or present for redemption and reduce to cash a sufficient amount of such Permitted Investments whenever it shall be necessary to provide moneys in any fund or account for the purposes of such fund or account and the Trustee shall not be liable for any loss resulting from such investments. In determining the balance in any Fund (other than the Series 2017 Debt Service Reserve Fund), investments in such Fund shall be valued at the lower of their original cost or their fair market value as of the most recent interest payment date. Permitted Investments in the Series 2017 Debt Service Reserve Fund shall be valued at fair market value, exclusive of accrued interest. Investments in the Funds under this Indenture shall be valued on each May 1 and November 1 in each year beginning May 1, 2018. Events of Default The term "event of default," wherever used in the Indenture, means any one of the following events (whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) default in the payment of any interest on any Bond when such interest becomes due and payable; or (b) default in the payment of the principal of (or premium, if any, on) any Bond when the same becomes due and payable (whether at maturity, upon proceedings for redemption, by acceleration or otherwise); or (c) default in the performance, or breach, of any covenant or agreement of the Authority in the Indenture (other than a covenant or agreement a default in the performance or breach of which is specifically dealt with elsewhere in the Indenture), and continuance of such default or breach for a period of 60 days after there has been given to the Authority and the City by the Trustee or to the Authority and the City and the Trustee by the owners of at least 10% in principal amount of the Bonds Outstanding, a written notice specifying such default or breach and requiring it to be remedied; provided, that if such default cannot be fully remedied within such 60 -day period, but can reasonably be expected to be fully remedied, such default shall not constitute an event of default if the Authority shall immediately upon receipt of such notice commence the curing of such default and shall thereafter prosecute and complete the same with due diligence and dispatch; or (d) any event of default under the Financing Agreement shall occur and is continuing and has not been waived. With regard to any alleged default concerning which notice is given to the City under the provisions of the Indenture, the Authority thereby grants the City full authority for the account of the Authority to perform any covenant or obligation, the nonperformance of which is alleged in said notice to constitute a default, in the name and stead of the Authority, with full power to do any and all things and acts to the same extent that the Authority could do and perform any such things and acts in order to remedy such default. Acceleration of Maturity; Rescission and Annulment If an event of default occurs and is continuing, the Trustee may, and shall, if requested by the owners of not less than 25% in principal amount of the Bonds Outstanding, by written notice to the Authority and the City, declare the principal of all Bonds Outstanding and the interest accrued thereon to be due and payable, and upon any such declaration such principal and interest shall become immediately due and payable. C-14 At any time after such a declaration of acceleration has been made, but before any judgment or decree for payment of money due on any Bonds has been obtained by the Trustee as provided in the Indenture, the owners of a majority in principal amount of the Bonds Outstanding may, by written notice to the Authority, the City and the Trustee, rescind and annul such declaration and its consequences if- (a) f (a) the Authority has deposited with the Trustee a sum sufficient to pay (1) all overdue installments of interest on all Bonds, (2) the principal of (and premium, if any, on) any Bonds which have become due otherwise than by such declaration of acceleration and interest thereon at the rate prescribed therefor in the Bonds, (3) interest upon overdue installments of interest at the rate prescribed therefor in the Bonds, and (4) all sums paid or advanced by the Trustee thereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (b) all events of default, other than the non-payment of the principal of Bonds which have become due solely by such declaration of acceleration, have been cured or have been waived as provided in the Indenture. No such rescission and annulment shall affect any subsequent default or impair any right consequent thereon. Exercise of Remedies by the Trustee Upon the occurrence and continuance of any event of default under this Indenture, unless the same is waived as provided in this Indenture, the Trustee shall have the following rights and remedies, in addition to any other rights and remedies provided under this Indenture or by law: (a) Right to Bring Suit, Etc. The Trustee may pursue any available remedy at law or in equity by suit, action, mandamus or other proceeding to enforce the payment of the principal of, premium, if any, and interest on the Bonds Outstanding, including interest on overdue principal (and premium, if any) and on overdue installments of interest, and any other sums due under this Indenture, to realize on or to foreclose any of its interests or liens under this Indenture or any other Transaction Document, to enforce and compel the performance of the duties and obligations of the Authority as set forth in this Indenture and to enforce or preserve any other rights or interests of the Trustee under this Indenture with respect to any of the Trust Estate or otherwise existing at law or in equity. (b) Exercise of Remedies at Direction of Bondowners. If requested in writing to do so by the owners of not less than 25% in principal amount of Bonds Outstanding and if indemnified as provided in Section 802(e) of this Indenture, the Trustee shall be obligated to exercise such one or more of the rights and remedies conferred by this Article as the Trustee shall deem most expedient in the interests of the Bondowners. (c) Appointment of Receiver. Upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Bondowners under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the C-15 Trust Estate, pending such proceedings, with such powers as the court making such appointment shall confer. (d) Suits to Protect the Trust Estate. The Trustee shall have power to institute and to maintain such proceedings as it may deem expedient to prevent any impairment of the Trust Estate by any acts which may be unlawful or in violation of this Indenture and to protect its interests and the interests of the Bondowners in the Trust Estate, including power to institute and maintain proceedings to restrain the enforcement of or compliance with any governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement of or compliance with such enactment, rule or order would impair the security under this Indenture or be prejudicial to the interests of the Bondowners or the Trustee, or to intervene (subject to the approval of a court of competent jurisdiction) on behalf of the Bondowners in any judicial proceeding to which the Authority or the City is a party and which in the judgment of the Trustee has a substantial bearing on the interests of the Bondowners. (e) Enforcement Without Possession of Bonds. All rights of action under this Indenture or any of the Bonds may be enforced and prosecuted by the Trustee without the possession of any of the Bonds or the production thereof in any suit or other proceeding relating thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust. Any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and subject to the provisions of Section 707 hereof, be for the equal and ratable benefit of the owners of the Bonds in respect of which such judgment has been recovered. (f) Restoration of Positions. If the Trustee or any Bondowner has instituted any proceeding to enforce any right or remedy under this Indenture by suit, foreclosure, the appointment of a receiver, or otherwise, and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Bondowner, then and in every case the Authority, the City, the Trustee and the Bondowners shall, subject to any determination in such proceeding, be restored to their former positions and rights under this Indenture, and thereafter all rights and remedies of the Trustee and the Bondowners shall continue as though no such proceeding had been instituted. Limitation on Suits by Bondowners No owner of any Bond shall have any right to institute any proceeding, judicial or otherwise, under or with respect to the Indenture, or for the appointment of a receiver or trustee or for any other remedy under the Indenture, unless: (a) such owner has previously given written notice to the Trustee of a continuing event of default; (b) the owners of not less than 25% in principal amount of the Bonds Outstanding shall have made written request to the Trustee to institute proceedings in respect of such event of default in its own name as Trustee under the Indenture; (c) such owner or owners have offered to the Trustee indemnity as provided in the Indenture against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and C-16 (e) no direction inconsistent with such written request has been given to the Trustee during such 60 -day period by the owners of a majority in principal amount of the Outstanding Bonds; it being understood and intended that no one or more owners of Bonds shall have any right in any manner whatever by virtue of, or by availing of, any provision of the Indenture to affect, disturb or prejudice the lien of the Indenture or the rights of any other owners of Bonds, or to obtain or to seek to obtain priority or preference over any other owners or to enforce any right under the Indenture, except in the manner therein provided and for the equal and ratable benefit of all Outstanding Bonds. Notwithstanding the foregoing or any other provision in the Indenture, however, the owner of any Bond shall have the right which is absolute and unconditional to receive payment of the principal of (and premium, if any) and interest on such Bond on the respective stated maturities expressed in such Bond (or, in the case of redemption, on the redemption date) and nothing contained in the Indenture shall affect or impair the right of any owner to institute suit for the enforcement of any such payment. Control of Proceedings by Bondowners The owners of a majority in principal amount of the Bonds Outstanding shall have the right, during the continuance of an event of default, provided indemnity has been provided to the Trustee in accordance with the Indenture: (a) to require the Trustee to proceed to enforce the Indenture, either by judicial proceedings for the enforcement of the payment of the Bonds and the foreclosure of the Indenture, or otherwise; and (b) to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under the Indenture, provided that (1) such direction shall not be in conflict with any rule of law or the Indenture, (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, and (3) the Trustee shall not determine that the action so directed would be unjustly prejudicial to the owners not taking part in such direction. Application of Moneys Collected Any moneys collected by the Trustee pursuant to the Indenture (after the deductions for payment of costs and expenses of proceedings resulting in the collection of such moneys) together with any other sums then held by the Trustee as part of the Trust Estate, shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Bonds and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: (a) First: To the payment of all unpaid amounts due the Trustee under the Indenture; (b) Second: To the payment of the whole amount then due and unpaid upon the Outstanding Bonds for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected, with interest (to the extent that such interest has been collected by the Trustee or a sum sufficient therefor has been so collected and payment thereof is legally enforceable at the respective rate or rates prescribed therefor in the Bonds) on overdue C-17 principal (and premium, if any) and on overdue installments of interest; and in case such proceeds shall be insufficient to pay in full the whole amount so due and unpaid upon such Bonds, then to the payment of such principal and interest, without any preference or priority, ratably according to the aggregate amount so due; and (c) Third: To the payment of the remainder, if any, to the Authority or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct. Whenever moneys are to be applied by the Trustee pursuant to the provisions of the Indenture, such moneys shall be applied by it at such times, and from time to time, as the Trustee shall determine, having due regard for the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such moneys, it shall fix the date (which shall be an interest payment date unless it shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date, in accordance with the Indenture, and shall not be required to make payment to the owner of any unpaid Bond until such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid. Resignation and Removal of Trustee (a) The Trustee may resign at any time by giving written notice thereof to the Authority, the City and each owner of Bonds Outstanding as shown by the list of Bondowners required by the Indenture to be kept at the office of the Trustee. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. (b) If the Trustee has or shall acquire any conflicting interest (as determined by the Trustee), it shall, within 90 days after ascertaining that it has a conflicting interest, or within 30 days after receiving written notice from the Authority or the City (so long as the City is not in default under the Financing Agreement) that it has a conflicting interest, either eliminate such conflicting interest or resign in the manner and with the effect specified in subsection (a) above. (c) The Trustee may be removed at any time by an instrument or concurrent instruments in writing delivered to the Authority and the Trustee signed by the owners of a majority in principal amount of the Outstanding Bonds, or, so long as the City is not in default and no condition that with the giving of notice or passage of time, or both, would constitute a default by the City under the Financing Agreement. The Authority, the City or any Bondowner may at any time petition any court of competent jurisdiction for the removal for cause of the Trustee. (d) If at any time: (1) the Trustee shall fail to comply with subsection (b) after written request therefor by the Authority or the City, or (2) the Trustee shall cease to be eligible under the Indenture and shall fail to resign after written request therefor by the Authority or by any Bondowner, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, C-18 then, in any such case, (A) the Authority may remove the Trustee, or (B) the City or any Bondowner may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (e) The Trustee shall give notice at the expense of the City of each resignation and each removal of the Trustee and each appointment of a successor Trustee by mailing written notice of such event by first- class mail, postage prepaid, to the Authority, the City and the registered owners of Bonds as their names and addresses appear in the bond register maintained by the Trustee. Each notice shall include the name of the successor Trustee and the address of its principal corporate trust office. (f) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to the Indenture shall become effective until the acceptance of appointment by the successor Trustee under the Indenture. Appointment of Successor Trustee If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Authority, with the written consent of the City if no event of default under the Financing Agreement has occurred and is continuing (which consent shall not be unreasonably withheld), or the owners of a majority in principal amount of Bonds Outstanding (if an event of default thereunder or under the Financing Agreement has occurred and is continuing), by an instrument or concurrent instruments in writing delivered to the Authority and the retiring Trustee, shall promptly appoint a successor Trustee. In case all or substantially all of the Trust Estate shall be in the possession of a receiver or trustee lawfully appointed, such receiver or trustee, by written instrument, may similarly appoint a temporary successor to fill such vacancy until a new Trustee shall be so appointed by the Authority or the Bondowners. If, within 30 days after such resignation, removal or incapability or the occurrence of such vacancy, a successor Trustee shall be appointed in the manner therein provided, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the retiring Trustee and any temporary successor Trustee appointed by such receiver or trustee. If no successor Trustee shall have been so appointed and accepted appointment in the manner therein provided, any Bondowner may petition any court of competent jurisdiction for the appointment of a successor Trustee, until a successor shall have been appointed as above provided. The successor so appointed by such court shall immediately and without further act be superseded by any successor appointed as above provided. Every such successor Trustee appointed pursuant to the provisions of the Indenture shall be a bank or trust company in good standing under the law of the jurisdiction in which it was created and by which it exists, meeting the eligibility requirements of the Indenture. Supplemental Indentures without Consent of Bondowners Without the consent of the owners of any Bonds, the Authority and the Trustee may from time to time enter into one or more Supplemental Indentures for any of the following purposes: (a) to correct or amplify the description of any property at any time subject to the lien of the Indenture, or better to assure, convey and confirm unto the Trustee any property subject or required to be subjected to the lien of the Indenture, or to subject to the lien of the Indenture additional property; or (b) to add to the conditions, limitations and restrictions on the authorized amount, terms or purposes of issue, authentication and delivery of Bonds or of any series of Bonds, as therein set forth, additional conditions, limitations and restrictions thereafter to be observed; or (c) to authorize the issuance of any series of Additional Bonds and make such other provisions as provided in the Indenture; or C-19 (d) to evidence the appointment of a separate trustee or the succession of a new trustee under the Indenture; or (e) to add to the covenants of the Authority or to the rights, powers and remedies of the Trustee for the benefit of the owners of all Bonds or to surrender any right or power therein conferred upon the Authority; or (f) to cure any ambiguity, to correct or supplement any provision in the Indenture which may be inconsistent with any other provision therein or to make any other change, with respect to matters or questions arising under the Indenture, which shall not be inconsistent with the provisions of the Indenture, provided such action shall not materially adversely affect the interests of the owners of the Bonds; or (g) to modify, eliminate or add to the provisions of the Indenture to such extent as shall be necessary to effect the qualification of the Indenture under the Trust Indenture Act of 1939, as amended, or under any similar federal statute thereafter enacted, or to permit the qualification of the Bonds for sale under the securities laws of the United States or any state of the United States. Supplemental Indentures with Consent of Bondowners With the consent of the owners of not less than a majority in principal amount of the Bonds then Outstanding affected by such Supplemental Indenture, the Authority and the Trustee may enter into one or more Supplemental Indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of modifying in any manner the rights of the owners of the Bonds under the Indenture; provided, however, that no such Supplemental Indenture shall, without the consent of the owner of each Outstanding Bond affected thereby, (a) change the stated maturity of the principal of, or any installment of interest on, any Bond, or reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or change any place of payment where (except as may be required in connection with the appointment of a successor Trustee), or the coin or currency in which, any Bond, or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the stated maturity thereof (or, in the case of redemption, on or after the redemption date); or (b) reduce the percentage in principal amount of the Outstanding Bonds, the consent of whose owners is required for any such Supplemental Indenture, or the consent of whose owners is required for any waiver provided for in the Indenture of compliance with certain provisions of the Indenture or certain defaults thereunder and their consequences; or (c) modify the obligation of the Authority to make payment on or provide funds for the payment of any Bond; or (d) modify any of the provisions of the Indenture, except to increase any percentage provided thereby or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the owner of each Bond affected thereby; or (e) permit the creation of any lien ranking prior to or, except with respect to any Additional Bonds, on a parity with the lien of the Indenture with respect to any of the Trust Estate or terminate the lien of the Indenture on any property at any time subject thereto or deprive the owner of any Bond of the security afforded by the lien of the Indenture. C-20 The Trustee may in its discretion determine whether or not any Bonds would be affected by any Supplemental Indenture and any such determination shall be conclusive upon the owners of all Bonds, whether theretofore or thereafter authenticated and delivered thereunder. The Trustee shall not be liable for any such determination made in good faith. It shall not be necessary for the required percentage of owners of Bonds under the Indenture to approve the particular form of any proposed Supplemental Indenture, but it shall be sufficient if such act shall approve the substance thereof. Payment, Discharge and Defeasance of Bonds Bonds will be deemed to be paid and discharged and no longer Outstanding under the Indenture and will cease to be entitled to any lien, benefit or security of the Indenture if the Authority shall pay or provide for the payment of such Bonds in any one or more of the following ways: (a) by paying or causing to be paid the principal of (including redemption premium, if any) and interest on such Bonds, as and when the same become due and payable; (b) by delivering such Bonds to the Trustee for cancellation; or (c) by depositing in trust with the Trustee or other Paying Agent moneys and Defeasance Obligations in an amount, together with the income or increment to accrue thereon, without consideration of any reinvestment thereof, sufficient to pay or redeem (when redeemable) and discharge the indebtedness on such Bonds at or before their respective maturity or redemption dates (including the payment of the principal of, premium, if any, and interest payable on such Bonds to the maturity or redemption date thereof); provided that, if any such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption is given in accordance with the requirements of the Indenture or provision satisfactory to the Trustee is made for the giving of such notice. The Bonds may be defeased in advance of their maturity or redemption dates only with cash or Defeasance Obligations pursuant to subsection (c) above, subject to receipt by the Trustee of (1) a verification report in form and substance satisfactory to the Trustee prepared by independent certified public accountants, or other verification agent, satisfactory to the Trustee and (2) an Opinion of Bond Counsel addressed and delivered to the Trustee and the Authority in form and substance satisfactory to the Trustee to the effect that the payment of the principal of and redemption premium, if any, and interest on all of the Bonds then Outstanding and any and all other amounts required to be paid under the provisions of the Indenture has been provided for in the manner set forth in the Indenture and to the effect that so providing for the payment of any Bonds will not cause the interest on the Bonds to be included in gross income for federal income tax purposes, notwithstanding the satisfaction and discharge of the Indenture. The foregoing notwithstanding, the liability of the Authority in respect of such Bonds shall continue, but the owners thereof shall thereafter be entitled to payment only out of the moneys and Defeasance Obligations deposited with the Trustee as aforesaid. Moneys and Defeasance Obligations so deposited with the Trustee pursuant to the Indenture shall not be a part of the Trust Estate but shall constitute a separate trust fund for the benefit of the Persons entitled thereto. Such moneys and Defeasance Obligations shall be applied by the Trustee to the payment (either directly or through any Paying Agent, as the Trustee may determine) to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such moneys and Defeasance Obligations have been deposited with the Trustee. C-21 Satisfaction and Discharge of Indenture The Indenture and the lien, rights and interests created by the Indenture shall cease, determine and become null and void (except as to any surviving rights pursuant to the Indenture) if the following conditions are met: (a) the principal of, premium, if any, and interest on all Bonds has been paid or is deemed to be paid and discharged by meeting the conditions of the Indenture; (b) all other sums payable under the Indenture with respect to the Bonds are paid or provision satisfactory to the Trustee is made for such payment; (c) the Trustee receives an Opinion of Bond Counsel (which may be based upon a ruling or rulings of the Internal Revenue Service) to the effect that so providing for the payment of any Bonds will not cause the interest on the Bonds to be included in gross income for federal income tax purposes, notwithstanding the satisfaction and discharge of the Indenture; (d) the Trustee receives an Opinion of Counsel to the effect that all conditions precedent in the Indenture to the satisfaction and discharge of the Indenture have been complied with; and (e) if such Bonds are to be redeemed or final payment is to occur on a date which is more than 90 days from the date of the deposit under the Indenture, the Authority and the City shall have received (1) the report of a verification agent acceptable to and addressed to each of them, confirming the mathematical accuracy of the calculations used to determine the sufficiency of the moneys or Defeasance Obligations; and (2) the escrow deposit agreement Thereupon, the Trustee shall execute and deliver to the Authority a termination statement and such instruments of satisfaction and discharge of the Indenture as may be necessary at the written request of the Authority, and shall pay, assign, transfer and deliver to the Authority, or other Persons entitled thereto, all moneys, securities and other property then held by it under the Indenture as a part of the Trust Estate, other than moneys or Defeasance Obligations held in trust by the Trustee as therein provided for the payment of the principal of, premium, if any, and interest on the Bonds. SUMMARY OF THE FINANCING AGREEMENT The following is a summary of certain provisions contained in the Financing Agreement. The following is not a comprehensive description, however, and is qualified in its entirety by reference to the Financing Agreement for a complete recital of the terms thereof. Amount and Source of the Financing; Issuance of Bonds The Authority agrees to make available to the City, upon the terms and conditions in the Financing Agreement and in the Indenture specified, the net proceeds received by the Authority from the sale of the Series 2017 Bonds (the "Financing"). In order to provide funds for the Financing, to finance the Costs of the Project and to refund the Refunded Bonds, the Authority agrees that it will issue, sell and deliver the Series 2017 Bonds to the Original Purchaser. The proceeds of the sale of the Series 2017 Bonds shall be paid over to the Trustee for the account of the Authority and shall be administered, disbursed and applied to finance the Costs of the Project and refund the Refunded Bonds and other purposes upon the terms and in the manner as provided in the Indenture and in the Financing Agreement. C-22 Financing Payments Subject to the limitations on appropriation set forth in Sections 3.5, 3.7 and 4.1 hereof, the City shall pay the following amounts to the Trustee, all as "Financing Payments" under this Financing Agreement: (a) Debt Service Fund — Interest: On or before the third Business Day preceding each May 1 and November 1, commencing on the third Business Day preceding May 1, 2018, an amount which is not less than the interest to become due on the next interest payment date on the Series 2017 Bonds; provided, however that the City may be entitled to certain credits on such payments as permitted under Section 3.3 of this Financing Agreement; (b) Debt Service Fund — Principal: On or before the third Business Day preceding each May 1, commencing on the third Business Day preceding May 1, 2018, an amount which is not less than the next installment of principal due on the Series 2017 Bonds on the next principal payment date by maturity; provided, however, that the City may be entitled to certain credits on such payments as permitted under Section 3.3 of this Financing Agreement; and Notwithstanding any schedule of payments set forth in this Financing Agreement or the Indenture, the City shall make payments hereunder and shall be liable therefor at the times and in the amounts (including interest, principal, and redemption premium, if any) equal to the amounts to be paid as interest, principal and redemption premium, if any, whether at maturity or by optional or mandatory redemption, as applicable, upon all Bonds from time to time Outstanding under the Indenture. Additional Payments Subject to the limitations of the Financing Agreement, the City shall pay the following amounts to the following persons, all as "Additional Payments" under the Financing Agreement: (a) to the Trustee, when due, all reasonable fees and charges for its services rendered under the Indenture, the Financing Agreement and any other Transaction Documents, and all reasonable expenses (including without limitation reasonable fees and charges of any Paying Agent, bond registrar, counsel, accountant, engineer or other person) incurred in the performance of the duties of the Trustee under the Indenture, the Financing Agreement and any other Transaction Documents for which the Trustee and other persons are entitled to repayment or reimbursement; (b) to the Trustee, upon demand, an amount necessary to pay rebatable arbitrage in accordance with the Tax Compliance Agreement and the Indenture; (c) to the Trustee or the party due, upon written demand all other amounts payable in accordance with the Tax Compliance Agreement; (d) to the Authority, on the Bond Issuance Date, its regular administrative and issuance fees and charges, if any, and all expenses (including without limitation attorneys' fees) incurred by the Authority in relation to the transactions contemplated by the Financing Agreement and the Indenture, which are not otherwise to be paid by the City under the Financing Agreement or the Indenture; (e) to the appropriate person, such payments as are required (i) as payment for or reimbursement of any and all reasonable costs, expenses and liabilities incurred by the Authority or the Trustee or any of them in satisfaction of any obligations of the City under the Financing Agreement that the City does not perform, or incurred in the defense of any action or proceeding with respect to the Well Project, the Financing Agreement or the Indenture, or (ii) as reimbursement for expenses paid, or as prepayment of expenses to be paid, by the Authority or the Trustee and that are C-23 incurred as a result of a request by the City, or a requirement of the Financing Agreement and that the City is not otherwise required to pay under the Financing Agreement; (f) to the Trustee, upon written demand of the Trustee, the amount required by the Indenture, subject to the provisions hereof and of the Indenture, necessary to restore the Series 2017 Debt Service Reserve Fund to an amount equal to the Series 2017 Debt Service Reserve Fund Requirement. If applicable, any Supplemental Financing Agreement shall provide for deposits into the debt service reserve fund(s) for Additional Bonds of amounts sufficient to maintain such fund(s) as required by the Indenture; (g) to the appropriate person, any other amounts required to be paid by the City under the Financing Agreement or the Indenture; and (h) any past due Additional Payments shall continue as an obligation of the City until they are paid and shall bear interest at the Prime Rate plus 2% during the period such Additional Payments remain unpaid. Annual Appropriations The City intends, on or before the last day of each Fiscal Year, to budget and appropriate, specifically with respect to the Financing Agreement, moneys sufficient to pay all the Financing Payments and reasonably estimated Additional Payments for the next succeeding Fiscal Year. The City shall deliver written notice to the Trustee no later than 15 days after the commencement of its Fiscal Year stating whether or not the Board of Aldermen has appropriated funds sufficient for the purpose of paying the Financing Payments and reasonably estimated Additional Payments to become due during such Fiscal Year. If the Board of Aldermen shall have made the appropriation necessary to pay the Financing Payments and reasonably estimated Additional Payments to become due during such Fiscal Year, the failure of the City to deliver the foregoing notice on or before the 15th day after the commencement of its Fiscal Year shall not constitute an Event of Nonappropriation and, on failure to receive such notice 15 days after the commencement of the City's Fiscal Year, the Trustee shall make independent inquiry of the fact of whether or not such appropriation has been made. If the Board of Aldermen shall not have made the appropriation necessary to pay the Financing Payments and Additional Payments reasonably estimated to become due during such succeeding Fiscal Year, the failure of the City to deliver the foregoing notice on or before the 150' day after the commencement of its Fiscal Year shall constitute an Event of Nonappropriation. Annual Budget Request The City Administrator or other officer of the City at any time charged with the responsibility of formulating budget proposals shall include in the budget proposals submitted to the Board of Aldermen, in each Fiscal Year in which the Financing Agreement shall be in effect, an appropriation for all the Financing Payments and reasonable estimated Additional Payments required for the ensuing Fiscal Year; it being the intention of the City that the decision to appropriate or not to appropriate under the Financing Agreement shall be made solely by the Board of Aldermen and not by any other official of the City. The City intends, subject to the provisions above respecting the failure of the City to budget or appropriate funds to make Financing Payments and Additional Payments, to pay the Financing Payments and Additional Payments thereunder. The City reasonably believes that legally available funds in an amount sufficient to make all Financing Payments and Additional Payments during each Fiscal Year can be obtained. The City further intends to do all things lawfully within its power to obtain and maintain funds from which the Financing Payments and Additional Payments may be made, including making provision for such Financing Payments and Additional Payments to the extent necessary in each proposed annual budget submitted for approval in accordance with applicable procedures of the City and to exhaust all available reviews and appeals in the event such portion of the budget is not approved. The City's Director of Finance is directed to do all things lawfully within such person's power to obtain and maintain funds from which the Financing Payments and Additional Payments may be C-24 paid, including making provision for such Financing Payments and Additional Payments to the extent necessary in each proposed annual budget submitted for approval or by supplemental appropriation in accordance with applicable procedures of the City and to exhaust all available reviews and appeals in the event such portion of the budget or supplemental appropriation is not approved. Notwithstanding the foregoing, the decision to budget and appropriate funds is to be made in accordance with the City's normal procedures for such decisions. Financing Payments to Constitute Current Expenses of the City Except as provided in the Financing Agreement, the Authority and the City acknowledge and agree that the Financing Payments and Additional Payments under the Financing Agreement shall constitute currently budgeted expenditures of the City, and shall not in any way be construed or interpreted as creating a liability or a general obligation or debt of the City in contravention of any applicable constitutional or statutory limitations or requirements concerning the creation of indebtedness by the City, nor shall anything contained in the Financing Agreement constitute a pledge of the general credit, tax revenues, funds or moneys of the City. The City's obligations to pay Financing Payments and Additional Payments under the Financing Agreement shall be from year to year only, and shall not constitute a mandatory payment obligation of the City in any ensuing Fiscal Year beyond the then current Fiscal Year. Neither the Financing Agreement nor the issuance of the Series 2017 Bonds shall directly or indirectly obligate the City to levy or pledge any form of taxation or make any appropriation or make any payments beyond those appropriated for the City's then current Fiscal Year, but in each Fiscal Year Financing Payments and Additional Payments shall be payable solely from the amounts budgeted or appropriated therefor out of the income and revenue provided for such year, plus any unencumbered balances from previous years; provided, however, that nothing in the Financing Agreement shall be construed to limit the rights of the Owners of the Series 2017 Bonds or the Trustee to receive any amounts which may be realized from the Trust Estate pursuant to the Indenture. Failure of the City to budget and appropriate said moneys on or before the last day of any Fiscal Year shall be deemed an Event of Nonappropriation. Security for the Financing The City's obligations to pay the Financing Payments and Additional Payments described in the Financing Agreement and any amounts required to be paid under the Financing Agreement, as applicable, shall be limited, special obligations of the City payable solely from, and secured as to the payment of principal and interest by, (i) subject to annual appropriation by the City as provided in the Financing Agreement, a pledge of all legally available revenues of the City and (ii) on a subordinate basis, amounts in the Special Allocation Fund as defined in the Redevelopment Plan, in each case as provided in the Authorizing Ordinance. The taxing power of the City is not pledged to the payment of the Financing Payments or Additional Payments either as to principal or interest. The City's obligation to pay the Financing Payments and Additional Payments shall not constitute general obligations of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional or statutory provision, limitation or restriction. Notwithstanding the foregoing, the Incremental Tax Revenues derived from the Redevelopment Area deposited into the Special Allocation Fund are pledged by the City pursuant to the Authorizing Ordinance to secure the Financing Payments and Additional Payments, which pledge is subordinate to the pledge of such revenues securing the Series 2011A Bonds, the Series 2014 Bonds, the Series 2017 Levee District Bonds and any additional bonds issued under the respective trust indentures related to such bonds (together, the "Senior Obligations"). The "Incremental Tax Revenues" consist of (a) PILOTS derived from the Redevelopment Area, (b) subject to annual appropriation by the City, Economic Activity Tax Revenues received by the City with respect to the Redevelopment Area and (c) the New State Revenues received by the City with respect to the Redevelopment Area. Any moneys and securities in the Special Allocation Fund not required to pay debt service on the Senior Obligations in any year may be used by the City for Financing Payments and Additional Payments. C-25 Additional Bonds The Authority from time to time may, in its sole discretion, at the written request of the City, authorize the issuance of Additional Bonds for the purposes and upon the terms and conditions provided in the Indenture; provided that (1) the terms of such Additional Bonds, the purchase price to be paid therefor and the manner in which the proceeds thereof are to be disbursed shall have been approved by resolutions adopted by the Authority and the City; (2) the Authority and the City shall have entered into a Supplemental Financing Agreement to acknowledge that Financing Payments are revised to the extent necessary to provide for the payment of the principal of, redemption premium, if any, and interest on the Additional Bonds and to extend the term of the Financing Agreement if the maturity of any of the Additional Bonds would otherwise occur after the expiration of the term of the Financing Agreement; and (3) the Authority and the City shall have otherwise complied with the provisions of the Financing Agreement and the Indenture with respect to the issuance of such Additional Bonds. Events of Default Defined The term "Event of Default" or "Default" shall mean any one or more of the following events: (a) Failure by the City to make timely payment of any Financing Payment. (b) Failure by the City to make any Additional Payment when due and, after notice of such failure, the City shall have failed to make such payment within 10 days following the due date. (c) Failure by the City to observe and perform any covenant, condition or agreement on the part of the City under the Financing Agreement or the Indenture, other than as referred to in the preceding subparagraphs (a) and (b), for a period of 30 days after written notice of such default has been given to the City by the Trustee or the Authority during which time such default is neither cured by the City nor waived in writing by the Trustee and the Authority, provided that, if the failure stated in the notice cannot be corrected within said 30 -day period, the Trustee and the Authority may consent in writing to an extension of such time prior to its expiration and the Trustee and the Authority will not unreasonably withhold their consent to such an extension if corrective action is instituted by the City within the 30 -day period and diligently pursued to completion and if such consent, in their judgment, does not materially adversely affect the interests of the Bondowners. (d) Any representation or warranty by the City in the Financing Agreement or in any certificate or other instrument delivered under or pursuant to the Financing Agreement or the Indenture or in connection with the financing of the Well Project shall prove to have been false, incorrect, misleading or breached in any material respect on the date when made, unless waived in writing by the Authority and the Trustee or cured by the City, if such representation or warranty can be cured to the satisfaction of the Authority and the Trustee within 30 days after notice thereof has been given to the City. Remedies on Default Subject to the provisions of the Financing Agreement, whenever any Event of Default shall have occurred and be continuing, the Trustee, as the assignee of the Authority, may take any one or more of the following remedial steps; provided that if the principal of all Bonds then Outstanding and the interest accrued thereon shall have been declared immediately due and payable pursuant to the provisions of the Indenture, all Financing Payments for the remainder of the term of the Financing shall become immediately due and payable without any further act or action on the part of the Authority or the Trustee and the Trustee may immediately proceed (subject to the provisions of the Financing Agreement) to take any one or more of the remedial steps set forth in subparagraph (b) below: C-26 (a) By written notice to the City declare the outstanding principal of the Financing Payments to be immediately due and payable, together with interest on overdue payments of principal and redemption premium, if any, and, to the extent permitted by law, interest, at the rate or rates of interest specified in the respective Bonds or the Indenture, without presentment, demand or protest, all of which are expressly waived. (b) Take whatever other action at law or in equity is necessary and appropriate to exercise or to cause the exercise of the rights and powers set forth in the Financing Agreement or in the Indenture, as may appear necessary or desirable to collect the amounts payable pursuant to the Financing Agreement then due and thereafter to become due or to enforce the performance and observance of any obligation, agreement or covenant of the City under the Financing Agreement or the Indenture. In the enforcement of the remedies provided in the Financing Agreement, the Trustee may treat all fees, costs and expenses of enforcement, including reasonable legal, accounting and advertising fees and expenses, as Additional Payments then due and payable by the City. Any amount collected pursuant to action taken under the Financing Agreement shall be paid to the Trustee and applied, first, to the payment of any costs, expenses and fees incurred by the Authority or the Trustee as a result of taking such action and, next, any balance shall be used to satisfy any Financing Payments then due by payment into the Debt Service Fund and applied in accordance with the Indenture and, then, to satisfy any other Additional Payments then due or to cure any other Event of Default. Notwithstanding the foregoing, the Trustee shall not be obligated to take any step that in its opinion will or might cause it to expend time or money or otherwise incur liability, unless and until indemnity satisfactory to it has been furnished to the Trustee at no cost or expense to the Trustee, as provided in the Indenture. The provisions of this Section are subject to the limitation that the annulment of a declaration that the Bonds are immediately due and payable shall automatically constitute an annulment of any corresponding declaration made pursuant to subparagraph (a) of this Section and a waiver and rescission of the consequences of such declaration and of the Event of Default with respect to which such declaration has been made, provided that no such waiver or rescission shall extend to or affect any other or subsequent Default or impair any right consequent thereon. In the event any covenant, condition or agreement contained in the Financing Agreement shall be breached or any Event of Default shall have occurred and such breach or Event of Default shall thereafter be waived by the Trustee, such waiver shall be limited to such particular breach or Event of Default. No Remedy Exclusive Subject to the provisions of the Financing Agreement, no remedy in the Financing Agreement conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under the Financing Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon a Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Trustee to exercise any remedy reserved to it in the Financing Agreement, it shall not be necessary to give any notice, other than such notice as may be therein expressly required. Agreement to Pay Attorneys' Fees and Expenses Subject to the provisions of the Financing Agreement, in connection with any Event of Default by the City, if the Authority or the Trustee employs attorneys or incurs other expenses for the collection of amounts C-27 payable under the Financing Agreement or the enforcement of the performance or observance of any covenants or agreements on the part of the City therein contained, the City agrees that it will, on demand therefor, pay to the Authority and the Trustee the reasonable fees of such attorneys and such other reasonable fees, costs and expenses so incurred by the Authority and the Trustee. Authority and City to Give Notice of Default The Authority and the City shall each, at the expense of the City, promptly give to the Trustee written notice of any Default of which the Authority or the City, as the case may be, shall have actual knowledge or written notice, but the Authority shall not be liable for failing to give such notice. Remedial Rights Assigned to the Trustee Upon the execution and delivery of the Indenture, the Authority will thereby have assigned to the Trustee all rights and remedies conferred upon or reserved to the Authority by the Financing Agreement, reserving only the Unassigned Authority's Rights. The Trustee shall have the exclusive right to exercise such rights and remedies conferred upon or reserved to the Authority by the Financing Agreement in the same manner and to the same extent, but under the limitations and conditions imposed by the Indenture and by the Financing Agreement. The Trustee and the Bondowners shall be deemed third party creditor beneficiaries of all representations, warranties, covenants and agreements contained in the Financing Agreement. Supplemental Financing Agreements without Consent of Bondowners Without the consent of the Owners of any Bonds, the Authority and the City may from time to time enter into one or more Supplemental Financing Agreements, for any of the following purposes: (a) to subject to the Financing Agreement additional property or to more precisely identify any project financed or refinanced out of the proceeds of any series of Bonds, or to substitute or add additional property thereto; or (b) to add to the conditions, limitations and restrictions on the authorized, amount, terms or purposes of the Financing, as set forth in the Financing Agreement, additional conditions, limitations and restrictions thereafter to be observed; or (c) in connection with the issuance of any Additional Bonds, to make such other provisions as provided in the Financing Agreement; or (d) to evidence the succession of another entity to the City and the assumption by any such successor of the covenants of the City contained in the Financing Agreement; or (e) to add to the covenants of the City or to the rights, powers and remedies of the Trustee for the benefit of the Owners of all or any series of Bonds or to surrender any right or power in the Financing Agreement conferred upon the City; or (f) to cure any ambiguity, to correct or supplement any provision in the Financing Agreement which may be inconsistent with any other provision in the Financing Agreement or to make any other provisions, with respect to matters or questions arising under the Financing Agreement, which shall not be inconsistent with the provisions of the Financing Agreement, provided such action shall not adversely affect the interests of the Owners of the Bonds. C-28 Supplemental Financing Agreements with Consent of Bondowners With the prior written consent of the Owners of not less than a majority in principal amount of the Bonds then Outstanding affected by such Supplemental Financing Agreement, the Authority and the City may enter into Supplemental Financing Agreements, in form satisfactory to the Trustee, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Financing Agreement or of modifying in any manner the rights of the Trustee and the Owners of the Bonds under the Financing Agreement; provided, however, that no such Supplemental Financing Agreement shall, without the consent of the Owner of each Outstanding Bond affected thereby: (a) change the stated maturity of the principal of, or any installment of interest on, the Financing Payments, or reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or change any place of payment where (except as may be required in connection with the appoint of a successor Trustee), or the coin or currency in which, the Financing Payments are payable, or impair the right to institute suit for the enforcement of any such payment on or after the stated maturity thereof (or, in the case of redemption, on or after the redemption date); or (b) reduce the percentage in principal amount of the Outstanding Bonds, the consent of whose Owners is required for any such Supplemental Financing Agreement, or the consent of whose Owners is required for any waiver provided for in the Financing Agreement of compliance with certain provisions of the Financing Agreement or certain defaults thereunder and their consequences; or (c) modify any of the provisions of this Section, except to increase any percentage provided thereby or to provide that certain other provisions of the Financing Agreement cannot be modified or waived without the consent of the Owner of each Bond affected thereby. The Trustee may in its discretion determine whether or not any Bonds would be affected by any Supplemental Financing Agreement and any such determination shall be conclusive upon the Owners of all Bonds, whether theretofore or thereafter authenticated and delivered under the Indenture. The Trustee shall not be liable for any such determination made in good faith. It shall not be necessary for the required percentage of Owners of Bonds under this Section to approve the particular form of any proposed Supplemental Financing Agreement, but it shall be sufficient if such act shall approve the substance thereof. SUMMARY OF THE AUTHORIZING ORDINANCE The following is a summary of certain provisions contained in the Authorizing Ordinance. The following is not a comprehensive description, however; and is qualified in its entirety by reference to the Authorizing Ordinance for a complete recital of the terms thereof. Limited Obligations Except as otherwise provided in the Authorizing Ordinance, the City's obligation to make Financing Payments and Additional Payments under the Financing Agreement shall be subject to annual appropriation and shall not constitute a debt, liability or indebtedness within the meaning of any constitutional, statutory or charter debt limitation or restriction, all as more fully provided in the Financing Agreement. Notwithstanding any schedule of payments upon the Financing set forth in the Financing Agreement or the Bond Trust Indenture under which the Bonds are issued (the "Indenture"), the City shall make payments upon the Financing and shall be liable therefor at the times and in the amounts (including interest, principal, and C-29 redemption premium, if any) equal to the amounts to be paid as interest, principal and redemption premium, if any, whether at maturity or by optional or mandatory redemption upon all Bonds from time to time outstanding under the Indenture, as further provided in the Financing Agreement.. Security for the Financing (a) Except as provided in the following paragraph, the City's obligation to make Financing Payments and Additional Payments pursuant to the Financing Agreement shall be subject to annual appropriation as provided in the Financing Agreement. Notwithstanding the foregoing, Payments in Lieu of Taxes and New State Revenues deposited into the Special Allocation Fund are not subject to annual appropriation and are pledged by the City pursuant the Authorizing Ordinance to secure the Financing Payments and Additional Payments, however any moneys and securities in the Special Allocation Fund not required to pay debt service on such bonds in any year may be used by the City for other reimbursable project costs pursuant to the Act. The pledge of the Payments in Lieu of Taxes and the New State Revenues is subordinate to the pledge of such revenues securing the Series 2011A Bonds, the Series 2014 Bonds, the Series 2017 Levee District Bonds and any additional bonds issued under the respective Trust Indentures related to such bonds. (b) As additional security for the City's obligation to make Financing Payments and Additional Payments pursuant to the Financing Agreement, such payments shall be payable from and secured as to the payment of principal and interest by (a) a pledge of the Payments in Lieu of Taxes deposited in the PILOTS Account of the Special Allocation Fund, (b) a pledge of the New State Revenues deposited in the New State Revenues Account of the Special Allocation Fund and (c) subject to annual appropriation by the Board of Aldermen as provided in the Authorizing Ordinance, the Economic Activity Tax Revenues deposited in the Economic Activity Tax Account of the Special Allocation Fund. The taxing power of the City is not pledged to the payment of the Financing either as to principal or interest. The Financing shall not constitute a general obligation of the City, nor shall it constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction. Annual Appropriation of Economic Activity Taxes The City currently intends to appropriate in each year the Economic Activity Tax Revenues in the Special Allocation Fund to the repayment of the Financing. In preparing the City's annual budget the City Administrator or such other office of the City at any time charged with the responsibility of formulating budget proposals shall include or cause to be included in each budget submitted to the Board of Aldermen such appropriation. Notwithstanding the foregoing, the decision of whether or not to appropriate is solely within the discretion of the Board of Aldermen. In the event the Board of Aldermen votes to not appropriate the Economic Activity Tax Revenues, the City shall immediately notify in writing the following persons of such Event of Nonappropriation: (i) the Authority, (ii) the Trustee, (iii) the Municipal Securities Rulemaking Board, via its EMMA portal, and (iv) each nationally recognized rating agency which currently maintains a rating on any of the City's bonds. SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT The following is a summary of certain provisions contained in the Continuing Disclosure Agreement. The following is not a comprehensive description, however, and is qualified in its entirety by reference to the Continuing Disclosure Agreement for a complete recital of the terms thereof. C-30 Provision of Annual Reports (a) The City shall, or shall cause the Dissemination Agent to, not later than the last day of the seventh month after the end of the City's Fiscal Year, commencing with the year ending June 30, 2017, file with the MSRB, through EMMA, the following financial information and operating data (the Annual Report"): (1) The audited financial statements of the City for the prior Fiscal Year prepared in accordance with accounting principles generally accepted in the United States. If audited financial statements are not available by the time the Annual Report is required to be filed pursuant to this Section, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement relating to the Bonds, and the audited financial statements shall be filed in the same manner as the Annual Report promptly after they become available; and (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement, as described under the heading Financial Information and Operating Data to be Included in Annual Report below, in substantially the same format contained in the final Official Statement. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the City is an "obligated person" (as defined by the Rule), which have been filed with the MSRB or the Commission. If the document included by reference is a final official statement, it must be available from the MSRB on EMMA. The City shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the City's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3(d). (b) Not later than three (3) Business Days prior to the date specified in subsection (a) for providing the Annual Report to the MSRB, the City shall either (1) provide the Annual Report to the Dissemination Agent, with written instructions to file the Annual Report as specified in subsection (a), or (2) provide written notice to the Dissemination Agent that the City has filed the Annual Report with the MSRB. If the Annual Report is provided to the Dissemination Agent with instructions to file the Annual Report, the City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such information constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may rely conclusively on any such certificate of the City and shall have no independent duty to review such Annual Report. (c) If the Dissemination Agent has not received either an Annual Report with filing instructions and written certification of the City referred to in Section 2(b) or a written notice from the City that it has filed an Annual Report with the MSRB by the date required in subsection (a), the Dissemination Agent shall send a notice in a timely manner to the MSRB and the Underwriter in substantially the form attached as Exhibit B to the Continuing Disclosure Agreement. C-31 (d) The Dissemination Agent shall, (1) notify the City each year, not later than 30 days prior to the date for providing the Annual Report to the MSRB, of the date on which its Annual Report must be provided to the Dissemination Agent or the MSRB, and (2) unless the City has filed the Annual Report with the MSRB, promptly following receipt of the Annual Report, instructions and written certification required in subsections (a) and (b) above, file the Annual Report with the MSRB and file a report with the City, the Authority and (if the Dissemination Agent is not the Bond Trustee) the Bond Trustee certifying that the Annual Report has been filed pursuant to the Continuing Disclosure Agreement and stating the date it was filed. (e) In addition to the foregoing requirements of this Section, the City agrees to provide copies of the most recent Annual Report to any requesting bondowner or prospective bondowner, but only after the same has been filed with the MSRB on EMMA. (f) The Annual Report shall be provided to the MSRB in such manner or format as prescribed by the MSRB. Reporting of Material Events (a) No later than 10 business days after the occurrence of any of the following events, the City shall give, or cause to be given, to the MSRB notice of the occurrence of any of the following events with respect to the Bonds ( "Material Events"): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions; the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bond, or other material events affecting the tax status of the Bonds; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and, whether or not material, tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the City; (13) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, in each case if material; and (14) appointment of a successor or additional trustee or the change of name of the trustee, if material. (b) The Dissemination Agent shall, promptly after obtaining actual knowledge of the occurrence of any event that it believes may constitute a Material Event, contact the chief financial officer of the City or his or her designee or such other person as the City shall designate in writing to the Dissemination Agent from time to time, inform such person of the event, and request that the City promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to subsection (d). If in response to a request under C-32 this subsection (b), the City determines that the event does not constitute a Material Event, the City shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent whether or not to report the occurrence pursuant to subsection (d). For the purpose of the Continuing Disclosure Agreement, "actual knowledge" of the Material Events means knowledge by an officer of the Dissemination Agent with responsibility for matters related to the Bond Indenture or the Continuing Disclosure Agreement. (c) Whenever the City obtains knowledge of the occurrence of a Material Event, because of a notice from the Dissemination Agent pursuant to subsection (b) or otherwise, the City shall promptly report the occurrence to the MSRB pursuant to subsection (a), or notify and instruct the Dissemination Agent in writing to report the occurrence pursuant to subsection (d). (d) If the Dissemination Agent receives written instructions from the City to report the occurrence of a Material Event, the Dissemination Agent shall promptly file a notice of such occurrence in a timely manner with the MSRB, with a copy to the City. If the Bond Indenture provides that notice of either of the Material Events described in subsections (a)(8) or (9) be provided to the registered owners of affected Bonds, then notwithstanding the foregoing requirements of this subsection, notice of the Material Event need not be given under this subsection any earlier than the notice of the underlying event provided under the Indenture. Termination of Reporting Obligation The City's obligations under the Continuing Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If the City's obligations under the Continuing Disclosure Agreement are assumed in full by some other entity, such person shall be responsible for compliance with the Continuing Disclosure Agreement in the same manner as if it were the City, and the City shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Bonds, the City shall give notice of such termination or substitution in the same manner as for a Material Event under the Continuing Disclosure Agreement. Dissemination Agent The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under the Continuing Disclosure Agreement, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the City. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the City pursuant to the Continuing Disclosure Agreement. The initial Dissemination Agent is UMB Bank, N.A. Amendment; Waiver Notwithstanding any other provision of the Continuing Disclosure Agreement, the City and Dissemination Agent may not amend the Continuing Disclosure Agreement and no provision of the Continuing Disclosure Agreement may be waived, unless Bond Counsel or other counsel experienced in federal securities law matters provides the City with its written opinion that the undertaking contained in the Continuing Disclosure Agreement, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to the Continuing Disclosure Agreement. In the event of any amendment or waiver of a provision of the Continuing Disclosure Agreement, the City shall (a) provide notice of such amendment or waiver in the same manner as for a Material Event under Section 4 of the Continuing Disclosure Agreement, and (b) describe such amendment or waiver in the next CMx Annual Report. Both the notice of amendment or waiver and the description of any amendment or waiver in the next Annual Report required pursuant to (a) and (b) in the preceding sentence, respectively, shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Additional Information Nothing in the Continuing Disclosure Agreement shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in the Continuing Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by the Continuing Disclosure Agreement. If the City chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is specifically required by the Continuing Disclosure Agreement, the City shall have no obligation under the Continuing Disclosure Agreement to update such information or include it in any future Annual Report, as the case may be, or notice of occurrence of a Material Event. Default If there is a failure of the City or the Dissemination Agent to comply with any provision of the Continuing Disclosure Agreement, the Underwriter or any Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the City or the Dissemination Agent, as the case may be, to comply with its obligations under the Continuing Disclosure Agreement. A default under the Continuing Disclosure Agreement shall not be deemed an event of default under the Bond Indenture or the Financing Agreement, and the sole remedy under the Continuing Disclosure Agreement if there is any failure of the City or the Dissemination Agent to comply with the Continuing Disclosure Agreement shall be an action to compel performance. If the Underwriter or any Beneficial Owner of the Bonds requests the Dissemination Agent to enforce the obligations of the Issuer under the Continuing Disclosure Agreement, the Dissemination Agent shall not be required to take any action unless and until it has received written indemnity with respect to taking such enforcement action, in form and substance satisfactory to the Dissemination Agent, from such persons as in the sole judgment of the Dissemination Agent are acceptable to it. Duties and Liabilities of Dissemination Agent The Dissemination Agent shall have only such duties as are specifically set forth in the Continuing Disclosure Agreement, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent shall not be responsible the City's failure to submit a complete Annual Report to the MSRB. The Dissemination Agent is not responsible for ensuring the compliance with any rule or regulation of the City or Underwriter in connection with the filings of information in the Continuing Disclosure Agreement but is merely responsible for the filing of any such information provided to the Dissemination Agent by the City. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. The City shall pay the fees, charges and expenses of the Dissemination Agent in connection with its administration of the Continuing Disclosure Agreement. C-34 Financial Information and Operating Data to be Included in Annual Report The financial information and operating data contained in the tables set forth under the following headings in Appendix A of the final Official Statement: 1. THE CITY — GENERAL - - Economic Information - - Commerce, Industry and Employment; 2. CITY DEBT STRUCTURE - - Long -Term Indebtedness; 3. FINANCIAL INFORMATION CONCERNING THE CITY - - Sources of Revenue; 4. FINANCIAL INFORMATION CONCERNING THE CITY - - City's Financial Relationship with Argosy Casino; 5. FINANCIAL INFORMATION CONCERNING THE CITY - - Retail Sales Tax; and 6. PROPERTY TAX - - Property Valuations - - History of Property Valuation. C-35 (THIS PAGE LEFT BLANK INTENTIONALLY) APPENDIX D FORM OF OPINION OF BOND COUNSEL The Industrial Development Authority of the City of Riverside, Missouri Riverside, Missouri City of Riverside, Missouri Riverside, Missouri UMB Bank, N.A., as Trustee Kansas City, Missouri Stifel Nicolaus & Company, Incorporated St. Louis, Missouri Re: $ The Industrial Development Authority of the City of Riverside, Missouri City of Riverside, Missouri Special Obligation Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2,017 We have acted as Bond Counsel to The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") of the above -referenced bonds (the "Bonds"). In this capacity, we have examined the law and the certified proceedings, certifications and other documents that we deem necessary to render this opinion. The Bonds are issued under Chapter 349 of the Revised Statutes of Missouri (the "Act"), and a Bond Trust Indenture dated as of November 1, 2017 (the "Indenture"), between the Authority and UMB Bank, N.A., as trustee (the "Trustee"). Capitalized terms used and not otherwise defined in this opinion have the meanings assigned in the Indenture. Regarding questions of fact material to our opinion, we have relied on representations of the Authority and the City of Riverside, Missouri (the "City") contained in the Financing Agreement and the Tax Compliance Agreement and certified proceedings and other certifications of the Authority, the City and others furnished to us, without undertaking to verify them by independent investigation. We have also relied on the legal opinion of Spencer Fane LLP, Special Counsel to the City, dated the date of this opinion, regarding certain matters, including (a) the corporate status and due organization of the City, (a) the power of the City to enter into and perform its obligations under the Financing Agreement and the Tax Compliance Agreement, and (b) the due authorization, execution and delivery of the Financing Agreement and the Tax Compliance Agreement by the City and the binding effect and enforceability of those documents against the City. Based on and subject to the foregoing, we are of the opinion, under existing law, as follows: 1. The Authority is validly existing as a body corporate and politic and public instrumentality under the laws of the State of Missouri (the "State"), including particularly the Act, with lawful power and authority to issue the Bonds and to enter into and perform its obligations under the Indenture, the Financing Agreement and the Tax Compliance Agreement. D-1 2. The Bonds have been duly authorized, executed and delivered by the Authority and are valid and legally binding special, limited obligations of the Authority. 3. The Bonds are payable solely from, and secured by a valid and enforceable pledge and assignment of the Trust Estate, all in the manner provided in the Indenture. The Bonds do not constitute an indebtedness of the State or of any political subdivision of the State within the meaning of any constitutional or statutory provision or limitation and do not constitute a pledge of the full faith and credit of the State or of any political subdivision of the State. The issuance of the Bonds will not, directly, indirectly or contingently, obligate the State or any political subdivision of the State to levy any form of taxation or to make any appropriation for the payment of the Bonds. 4. The Indenture, the Financing Agreement and the Tax Compliance Agreement have been duly authorized, executed and delivered by the Authority and are valid and legally binding agreements of the Authority enforceable against the Authority. 5. The interest on the Bonds (including any original issue discount properly allocable to an owner of a Bond) is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinion set forth in this paragraph is subject to the condition that the Authority and the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the Bonds in order to preserve the exclusion of the interest on the Bonds from gross income for federal income tax purposes. The Authority and the City have covenanted to comply with all of these requirements. Failure to comply with certain of these requirements may cause the interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Bonds have not been designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. 6. The interest on the Bonds is exempt from income taxation by the State. We express no opinion regarding (a) the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds (except to the extent, if any, stated in the Official Statement), (b) the perfection or priority of the lien on the Trust Estate pledged under the Indenture, or (c) federal or state tax consequences arising with respect to the Bonds, other than as expressly set forth in this opinion. The rights of the owners of the Bonds and the enforceability of the Bonds, the Indenture, the Financing Agreement and the Tax Compliance Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and by equitable principles, whether considered at law or in equity. This opinion is given as of its date, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may come to our attention or any changes in law that may occur after the date of this opinion. Very truly yours, I-2 New issue Standard & Poor's Rating: "A" (Book Entry Only) See" TING" herein. In the opinion of Gilmore & Bell. RC, Bond Counsel, under existing law and assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended (the "Code'.), (I) the interest on the Series 2017 Bonds is excludable from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. (2) the interest on the Series 21117 Bonds is exempt from Missouri income taxation by the State of Missouri and (3) the Series 2017 Bonds have not been designated as "qualified tax-exempt obligations "within the meaning of Section 265(b)(3) of the Code. See "TAX ATT2✓ "in this Official Statement. OF THE CITY OF RIVERSIDE,7MISSOURI ###f Industrial Development Revenue .. • .r r ► ! r « Series 2017 thereof.The Series 2017 Bonds are issuable only as fully registered bonds, without coupons, in the denomination of $5,000 or any integral multiple • of - on 117 Bonds will be paid from•under the Indenture (herein defined) by UMB Bank, N.A., Kansas City, Missouri, as Trustee and Paying .._ So long as DTC or Bondowner,Bondowner. DTC is expected, in turn, to remit such principal Novemberinterest to the DTC Participants (herein defined) for subsequent disbursement to the Beneficial Owners (herein defined), Principal of the Series 2017 Bonds will be payable on each May I in the years shown on the inside cover. Interest on the Series 2017 Bonds will be payable on each May I and t Payment of the principal of and interest on the Series 2017 Bonds is not secured by any mortgage on the Project or any other facilities or property of the City as described herein. The Series 2017 Bonds are secured as described below. The Series 2017 Bonds are not it • to optional or ! rredemption as described.2017 BONDS - Redemption" herein. The Series 21717 Bonds will be payable solely from, and will be secured by; (i) an assignment and a pledge of Financing Payments made by the City of Riverside, Missouri (the "City") pursuant to a Financing Agreement (the "Financing Agreement") between the Authority' and the City and (ii) a Debt Service Reserve Fund established for the Series 2017 Bands; Pursuant to the Financing Agreement, the City has pledged to the payment of principal of and interest on the Series 21717 Bonds (i) a subordinate hen on available tax increment revenues and (ii) subject to annual appropriation, all legally available revenues of the City, *VWv1EAS'AISKS.'1 lhe Series 21117 Bonds may not be suitable investments lor all persons, and prospective purchasers snould carefully evaluate the risks and merits of an investment in the Series 2017 Bonds, should confer with their own legal and financial advisors • should be able to bear the risk of loss of . Series 2017 Bonds • before consideringof Series 2017 Bonds. The Series 2017 Bands are of when, as and if issued by the Authority and accepted by the Underwriter, subject to prior sale, withdrawal or modification of the offer without notice and :subject to the approval of their validity by Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel., as described herein, Certain legal matters related to this Official Statement will be passed upon by Gilmore ,& Bell, P. C., Kansas City, Missouri. Certain legal matters will be passed upon for the Underwriter by its counsel, Lewis Rice LLC. Certain legal matters will be passed on for the City by Spencer Fane LLP, special counsel. Certain legal matters will be passed on for the Authority by its counsel,. Spencer Fane LLP; It is expected that the Series 2017 Bonds will be available for delivery through DTC in New York, New York on or about November 1, 2017, STIFEL THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 Maturity Schedule Serial Bonds Maturity Principal Interest May 1 Amount Rate Price Yield CUSIP�" 2018 $2,000,000 2.00% 100.397% 1.200% 769166 BC2 2019 2,095,000 3.00% 102.366% 1.400% 769166 BDO 2020 2,160,000 3.00% 103.467% 1.580% 769166 BE8 2021 2,225,000 4.00% 107.712% 1.720% 769166 BF5 2022 2,310,000 4.00% 108.971% 1.910% 769166 BG3 2023 2,405,000 5.00% 115.157% 2.070% 769166 131-11 2024 2,525,000 5.00% 116.608% 2.240% 769166 BJ7 2025 2,650,000 5.00% 117.823% 2.390% 769166 BK4 (1)CUSIP numbers have been assigned to this issue by S&P Global Rating, a division of S&P Global, Inc., and are included solely for the convenience of the Owners of the Series 2017 Bonds. Neither the Authority, the City nor the Underwriter shall be responsible for the selection or correctness of the CUSIP numbers set forth above. CITY OF RIVERSIDE, MISSOURI 2950 NW Vivion Road Riverside, Missouri 64150 MAYOR Kathleen Rose BOARD OF ALDERMEN Al Bowman Ron Super Aaron Thatcher Chet Pruett Salvatore LoPorto Art Homer ADMINISTRATION Greg Mills, City Administrator Robin Kincaid, City Clerk Donna Oliver, Finance Officer TRUSTEE UMB Bank, N.A. Kansas City, Missouri BOND COUNSEL TO THE CITY Gilmore & Bell, P.C. Kansas City, Missouri FINANCIAL ADVISOR Columbia Capital Management, LLC Overland Park, Kansas UNDERWRITER Stifel, Nicolaus & Company, Incorporated St. Louis, Missouri REGARDING USE OF THIS OFFICIAL STATEMENT No dealer, broker, salesman or other person has been authorized by the Authority, the City or the Underwriter to give any information or to make any representations, other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as a representation of fact. The information set forth herein has been obtained from the Authority, the City and other sources believed to be reliable, but is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Authority or the Underwriter. The information and expressions of opinion contained herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the affairs of the Authority, the City since the date hereof. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter do not guarantee the accuracy or completeness of that information. IN CONNECTION WITH THE OFFERING OF THE SERIES 2017 BONDS, THE UNDERWRITER MAY OVER ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2017 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. The Series 2017 Bonds have not been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or under any state securities or "blue sky" laws. The Series 2017 Bonds are offered pursuant to an exemption from registration with the Securities and Exchange Commission. In making an investment decision, investors must rely on their own examination of the terms of this offering, including the merits and risks involved. These securities have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this document. Any representation to the contrary may be a criminal offense. CAUTIONARY STATEMENTS REGARDING FORWARD- LOOKING STATEMENTS IN THIS OFFICIAL STATEMENT Certain statements included or incorporated by reference in this Official Statement constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as "plan," "expect," "estimate," "anticipate," "projected," "budget' or other similar words. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. NEITHER THE AUTHORITY, THE CITY NOR ANY OTHER PARTY PLANS TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN THEIR EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES UPON WHICH SUCH STATEMENTS ARE BASED OCCUR. TABLE OF CONTENTS INTRODUCTORY STATEMENT ....................1 Purpose of the Official Statement ..........................1 TheAuthority ......................................................... l TheCity .................................................................1 The Plan of Financing ............................................ l The Series 2017 Bonds..........................................2 Security for the Series 2017 Bonds........................3 Bondowners' Risks................................................4 Continuing Disclosure...........................................4 Definitions and Summaries of Legal Documents ..4 THE AUTHORITY.............................................4 Organization and Powers.......................................4 Membership...........................................................5 Indebtedness of the Authority ................................5 THECITY............................................................6 PLAN OF FINANCING ..................................... 6 General................................................................... 6 TheProject.............................................................6 Tax Increment Financing.......................................7 The Redevelopment Plan .....................................10 Development East of Horizons Parkway .............14 Development West of Horizons Parkway ............ 15 Additional TIF Project Financings .......................15 Sources and Uses of Funds..................................16 THE SERIES 2017 BONDS..............................16 General Terms......................................................16 Book -Entry Only System.....................................17 Redemption..........................................................19 Registration, Transfer and Exchange...................19 CUSIP Numbers..................................................19 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS.......................................19 General.................................................................19 Special, Limited Obligations ...............................20 The Financing Agreement...................................20 Debt Service Reserve Fund..................................22 The Indenture.......................................................23 Additional Bonds.................................................23 CITY FINANCIAL SUMMARY......................24 (iv) BONDOWNER'S RISKS ................................. 25 General................................................................ 25 Risk Factors Relating to the City's Obligations to Make Financing Payments .............................25 Risk Factors Relating to the Collection of Incremental Tax Revenues .............................26 Tax Increment Financing Litigation .................... 28 BondRating.........................................................29 Enforcement of Remedies ................................... 29 Amendment of Indenture ..................................... 29 LITIGATION.................................................... 29 The Authority ...................................................... 29 TheCity ...............................................................29 LEGAL MATTERS .......................................... 30 TAX MATTERS ................................................ 30 Opinion of Bond Counsel ..................................... 30 Other Tax Consequences ...................................... 31 RATING............................................................. 31 FINANCIAL STATEMENTS .......................... 32 CONTINUING DISCLOSURE ........................ 32 UNDERWRITING ............................................ 33 CERTAIN RELATIONSHIPS .........................33 MISCELLANEOUS .......................................... 33 APPENDIX A: Information Concerning the City of Riverside, Missouri APPENDIX B: Accountants' Report and Audited Financial Statements of the City of Riverside, Missouri for Fiscal Year Ended June 30, 2016 APPENDIX C: Definitions of Words and Terms and Summaries of Certain Legal Documents APPENDIX D: Form of Opinion of Bond Counsel OFFICIAL STATEMENT THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 INTRODUCTORY STATEMENT The following introductory statement is subject in all respects to more complete information contained elsewhere in this Official Statement. The order and placement of materials in this Official Statement, including the Appendices, are not to be deemed to be a determination of relevance, materiality or relative importance, and this Official Statement, including the Cover Page and Appendices, must be considered in its entirety. All capitalized terms used in this Official Statement that are not otherwise defined herein shall have the meanings ascribed to them in Appendix C hereto. Purpose of the Official Statement This Official Statement, including the cover page and the Appendices, sets forth certain information in connection with (i) the issuance and sale by The Industrial Development Authority of the City of Riverside, Missouri, a public corporation duly organized and validly existing under the laws of the State of Missouri (the "Authority"), of the above-described series of bonds (the "Series 2017 Bonds"), (ii) the Authority, (iii) the City of Riverside, Missouri (the "City"), and (iv) the refinancing of certain improvements in connection with the tax increment financing project more fully described herein. The Authority The Authority is a public corporation created and existing under and by virtue of the Industrial Development Corporation Act, Chapter 349 of the Revised Statutes of Missouri, as amended (the "Act"). For further information concerning the Authority, see "THE AUTHORITY" herein. The City The City is a suburban community located in the extreme southeast corner of Platte County, Missouri, approximately 7 miles north of downtown Kansas City, Missouri on the banks of the Missouri River. The City was incorporated in 1951 and is governed by a Mayor — Board of Aldermen — City Administrator form of government. See Appendix hereto for further information concerning the City. The Plan of Financing The proceeds of the Bonds are being made available to the City pursuant to a Financing Agreement (defined below) to refund two series of bonds previously issued by the Authority (as described herein, the "Refunded Bonds") to finance a portion of the costs of the Project, as defined herein (the "Project"). The Refunded Bonds consist of the Authority's (i) Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project - City of Riverside, Missouri), Series 2007A, issued in the original principal amount of $30,265,000, and (ii) Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project - City of Riverside, Missouri), Series 2007B, issued in the original principal amount of $10,000,000. The Refunded Bonds will be redeemed on December 1, 2017. The Refunded Bonds were issued to fund certain infrastructure costs including major road and utility access improvements (the "Project") related to the redevelopment area approved by the City pursuant to the L- 385 Levee Redevelopment Plan, as amended, (the "Redevelopment Plan") all within an approximately 1,800 acre area in the City on the north bank of the Missouri River designated as the TIF district in the Redevelopment Plan (the "Redevelopment Area"). The Redevelopment Plan was adopted by the City under the provisions of the Real Property Tax Increment Allocation Redevelopment, Act, Sections 99.800 et seq. of the Revised Statutes of Missouri, as amended (the "TIF Act"). The infrastructure improvements financed by the Refunded Bonds represented the third phase of major infrastructure improvements within the Redevelopment Area. The first phase provided flood protection with the improvements to the Riverside- Quindaro Bend Levee. Funded by the Army Corp of Engineers, the Riverside-Quindaro Bend Levee District of Platte County, Missouri (the "Levee Project) of Platte County, Missouri (the "Levee District") and the City, the Levee Project provided 500 -year flood protection for approximately 1,300 acres of property. The second phase of major infrastructure improvements was construction of a new diamond interchange at the intersection of Horizons Parkway and Interstate 635, completed in 2008. See "PLAN OF FINANCING — The Project" herein. The Authority and the Levee District have issued other series of bonds for projects in the Redevelopment Area as follows: (i) The Authority's Tax Increment Refunding Revenue Bonds (L-385 Levee Project), Series 2011A, issued in the original principal amount of $2,385,000 (the "Series 2011A Bonds") outstanding in the principal amount of $645,000, which were issued by the Authority to refund three prior series of bonds issued by the City to finance costs of certain projects in the Redevelopment Area; (ii) The Authority's Tax Increment Refunding Revenue Bonds (L-385 Levee Project), Series 2014, issued in the original principal amount of $7,640,000 (the "Series 2014 Bonds") outstanding in the principal amount of $4,010,000, which were issued by the Authority to refund a prior series of bonds issued by the City to finance costs of certain projects in the Redevelopment Area; and (iii) The Levee District's Levee District Improvement Refunding Bonds (L-385 Project), Series 2017, issued in the original aggregate principal amount of $12,620,000 (the "Series 2017 Levee District Bonds") currently outstanding in the principal amount of $12,620,000. The Series 2011A Bonds are secured on a parity with the Series 2014 Bonds with respect to the Incremental Tax Revenues (defined herein) generated in the Redevelopment Area and are also secured by an annual appropriation obligation of the City. The lien of the Series 2011A Bonds and the Series 2014 Bonds on Incremental Tax Revenues is senior to that of the Series 2017 Levee District Bonds and the Series 2017 Bonds and any bonds issued on a parity with such bonds. The Series 2017 Levee District Bonds are partially secured by a subordinate lien on the Incremental Tax Revenues generated in the Redevelopment Area that is senior to the lien on such revenues securing the Series 2017 Bonds, together with tax assessments on certain property in the Levee District. See "ADDITIONAL TIF PROJECT FINANCINGS" herein for limitations on additional parity debt. The Series 2017 Bonds The Series 2017 Bonds are being issued pursuant to the Act and a Bond Trust Indenture dated as of November 1, 2017 (said Bond Trust Indenture, together with all amendments and supplements thereto, being referred to herein as the "Indenture"), between the Authority and UMB Bank, N.A., Kansas City, Missouri (the "Trustee"), for the purpose of providing funds to the City, pursuant to a Financing Agreement dated as of November 1, 2017 (said Financing Agreement, together with all amendments and supplements thereto, being referred to herein as the "Financing Agreement"), between the Authority and the City, to be used to provide funds to, together with other available funds, (i) refund the Refunded Bonds, (ii) fund a debt service reserve -2- fund for the Series 2017 Bonds, and (iii) pay the costs of issuing the Series 2017 Bonds, in consideration of payments by the City, which will be sufficient to pay the principal of, redemption premium, if any, and the interest on the Series 2017 Bonds, all as more fully described in the Financing Agreement and the Indenture. A description of the Series 2017 Bonds is contained in this Official Statement under "THE SERIES 2017 BONDS." All references to the Series 2017 Bonds are qualified in their entirety by the definitive forms thereof and the provisions with respect thereto included in the Indenture and the Financing Agreement. The Indenture provides for the future issuance of additional bonds ("Additional Bonds") for the sole purpose of refunding the Series 2017 Bonds which, if issued, would rank on a parity with the Series 2017 Bonds and any other bonds then outstanding under the Indenture. See "SUMMARY OF THE INDENTURE" in Appendix C hereto. The Series 2017 Bonds and any future Additional Bonds issued under the Indenture are referred to collectively as the "Bonds." Security for the Series 2017 Bonds The Series 2017 Bonds and the interest thereon are special, limited obligations of the Authority, payable by the Authority solely from (1) Financing Payments to be made by the City under the Financing Agreement, (2) a Debt Service Reserve Fund established for the Series 2017 Bonds, and (3) certain funds held by the Trustee under the Indenture, and not from any other fund or source of the Authority. Pursuant to the Financing Agreement, the City has pledged (i) a subordinate lien on available Incremental Tax Revenues (defined as Payments in Lieu of Taxes (or PILOTS) and Economic Activity Taxes (or EATs), both described herein) and (ii) subject to annual appropriation, legally available revenues of the City. Payments under the Financing Agreement are designed to be sufficient, together with other funds available for such purpose, to pay when due the principal of, premium, if any, and interest on the Series 2017 Bonds. Except as noted herein, all payments by the City under the Financing Agreement are subject to annual appropriation. Pursuant to the Indenture, the Authority will assign to the Trustee, for the benefit and security of the registered Owners of the Series 2017 Bonds, substantially all of the rights of the Authority in the Financing Agreement, including all Financing Payments and Additional Payments payable thereunder. As described above under "The Plan of Financing," the Series 2011A Bonds are secured on a parity with the Series 2014 Bonds with respect to the Incremental Tax Revenues generated in the Redevelopment Area and are also secured by an annual appropriation obligation of the City. The lien of the Series 2011A Bonds and the Series 2014 Bonds on Incremental Tax Revenues is senior to that of the Series 2017 Levee District Bonds and the Series 2017 Bonds and any bonds issued on a parity with such bonds. The Series 2017 Levee District Bonds are partially secured by a subordinate lien on the Incremental Tax Revenues generated in the Redevelopment Area that is senior to the lien on such revenues securing the Series 2017 Bonds, together with tax assessments on certain property in the Levee District. The Series 2017 Bonds shall not constitute a debt or liability of the State or of any political subdivision thereof within the meaning of any State constitutional provision or statutory limitation and shall not constitute a pledge of the faith and credit of the State or of any political subdivision thereof. The issuance of the Series 2017 Bonds shall not directly or indirectly obligate the Authority, its officers, directors or employees, the City, the State or any political subdivision thereof to provide any funds for their payment. The issuance of the Series 2017 Bonds shall not, directly, indirectly, or contingently, obligate the City, State or any political subdivision thereof to levy any form of taxation therefor or to make any appropriation for their payment. The Authority has no taxing power. As the City has sold property within the Redevelopment Area to private parries and private parties have completed private projects, the portion of the property within the Levee District owned by the Authority and the City has been reduced and the value of taxable property within the Redevelopment Area has increased. However, the City makes no representation regarding its expectations for future sales of property, and the rate at which additional property will be subject to taxation in the Redevelopment Area. -3- The lien of the Series 2017 Bonds on the Incremental Tax Revenues is subordinate to the lien of the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds (together with any bonds issued on a parity with such bonds) on such revenues. While the City currently projects that there will be sufficient Incremental Tax Revenues to provide for the Financing Payments on the Series 2017 Bonds as well as required payments on the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein, there can be no assurance that such projections will be realized. As a consequence, prospective investors should evaluate the likelihood that the City will continue to appropriate moneys sufficient to make the Financing Payments under the Financing Agreement if Incremental Revenues are not sufficient to make the Financing Payments on the Series 2017 Bonds as well as required payments on the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS," "PLAN OF FINANCING — The Redevelopment Plan" and "BONDOWNERS RISKS" herein. Bondowners' Risks An investment in the Series 2017 Bonds involves elements of risk. For a description of certain risks associated with the Series 2017 Bonds, see "BONDOWNERS' RISKS" herein. Continuing Disclosure The City will enter into a Continuing Disclosure Agreement with the Trustee, as dissemination agent, for the benefit of the Owners of the Series 2017 Bonds to provide certain annual financial information and notices of the occurrence of certain enumerated events. A summary of the Continuing Disclosure Agreement is attached to this Official Statement in Appendix C. Definitions and Summaries of Legal Documents Definitions of certain words and terms used in this Official Statement are set forth in Appendix C of this Official Statement. Summaries of the Indenture, the Financing Agreement, the Authorizing Resolution and the Continuing Disclosure Agreement are included in this Official Statement in Appendix C hereto. Such definitions and summaries do not purport to be comprehensive or definitive. All references herein to the specified documents are qualified in their entirety by reference to the definitive forms of such documents, copies of which may be viewed at the principal corporate trust office of the Trustee, UMB Bank, N.A., Corporate Trust Department, 1010 Grand Boulevard, Kansas City, Missouri 64106. Copies of such documents and the other documents described herein will be available at the offices of the Underwriter, Stifel, Nicolaus & Company, Incorporated, 501 N. Broadway, St. Louis, Missouri, 63102, during the period of the offering and, thereafter, at the principal corporate trust office of the Trustee. THE AUTHORITY Organization and Powers The Authority is a public corporation, duly organized and existing under the laws of the State of Missouri, including particularly the Act. The Authority is authorized under the Act, among other things, to (i) finance all or any part of the costs of certain projects (as defined in the Act); (ii) issue its revenue bonds to finance and refinance such projects and refund prior bond issues; and (iii) pledge the income and revenues to be received with respect to such projects sufficient for the payment of such bonds and the interest thereon. -4- The Authority may issue its bonds, notes or other obligations for any of its corporate purposes. Neither the directors of the Authority nor any person executing the Series 2017 Bonds will be personally liable on the Series 2017 Bonds by reason of the issuance thereof. The Series 2017 Bonds and the interest thereon shall be special, limited obligations of the Authority payable solely from certain revenues pledged under the Financing Agreement, subject, in certain cases to annual appropriation by the Board of Aldermen of the City, and not from any other fund or source of the Authority, and are secured by a transfer, pledge and assignment of and a grant of a security interest in the Trust Estate to the Trustee and in favor of the Registered Owners of the Series 2017 Bonds, as provided in the Indenture. The Series 2017 Bonds and the interest thereon do not constitute a debt of the Authority, the City, the State or any political subdivision thereof, and do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. The Authority has no taxing power. Membership The Authority has a Board of Directors in which all of the powers of the Authority are vested, which consists of 5 directors, all of which are duly qualified electors of and taxpayers in Riverside, Missouri. The address of the Authority is 2950 NW Vivion Road, Riverside, Missouri 64150. The phone number of the Authority is (816) 741-3993. The current members and officers of the Board of Directors of the Authority are as follows: Name Leland Finley Frank Biondo Harold Snoderley Jason Rule Art Homer Indebtedness of the Authority Title President and Director Vice President and Director Secretary and Director Treasurer and Director Director The Authority is authorized to issue and may issue other series of bonds and notes secured by instruments separate and apart from the Indenture. The owners of such bonds and notes will have no claim on the assets, funds or revenues of the Authority securing the Series 2017 Bonds. The holders of the Series 2017 Bonds will have no claim on the assets, funds or revenues of the Authority securing such other bonds and notes. Other than with respect to the issuance of Additional Bonds as described herein, with respect to additional indebtedness of the Authority, the Authority intends to enter into separate agreements for the purpose of providing financing for eligible projects. Issues which may be sold by the Authority in the future will be created under separate and distinct indentures or resolutions and secured by instruments, properties and revenues separate from those securing the Series 2017 Bonds. EXCEPT FOR INFORMATION CONCERNING THE AUTHORITY IN THIS SECTION NONE OF THE INFORMATION IN THIS OFFICIAL STATEMENT HAS BEEN SUPPLIED OR VERIFIED BY THE AUTHORITY, AND THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. -5- THE CITY The City is a fourth class city organized and existing under the Constitution and laws of the State of Missouri. Certain information describing the City is attached hereto in Appendix A. PLAN OF FINANCING General The Series 2017 Bonds are being issued to, together with certain other available moneys, current refund $19,665,000 aggregate principal amount of the Refunded Bonds, to establish a Debt Service Reserve Fund for the Series 2017 Bonds, and pay costs of issuance of the Series 2017 Bonds. All of the outstanding Refunded Bonds, comprised of two prior series of bonds, will be refunded. To effect the refunding of the Refunded Bonds a portion of the proceeds of the Series 2017 Bonds together with other moneys from the funds and accounts of the Refunded Bonds will be deposited in an Escrow Fund created under an Escrow Letter of Instructions among the Authority, the City and UMB Bank, N.A., as Escrow Agent. The moneys deposited in the Escrow Fund will be sufficient, without consideration of investment, to provide for the payment and redemption of the Refunded Bonds on their date of redemption. The Escrow Agent will transfer sufficient moneys for the payment and redemption of the Refunded Bonds on the redemption date thereof to UMB Bank, N.A., as paying agent for the Refunded Bonds. The Project The Project consists of various infrastructure improvements related to the TIF Project, which improvements represent the third phase of major infrastructure improvements within the Redevelopment Area established under the L-385 Levee Redevelopment Plan of the City, including, but not limited to, the acquisition of rights-of-way, construction, extension and improvement of new or existing streets and highways and sanitary and storm sewer systems, provision for wetlands remediation, and professional fees. Such improvements have been substantially completed. The TIF Project consists of various improvements related to a tax increment financing project located in the City. In connection with the TIF Project, the City adopted a tax increment financing plan pursuant to the TIF Act, pursuant to which it has pledged the Incremental Tax Revenues to secure its obligation to make the financing payments pursuant to certain Financing Agreements. The Incremental Tax Revenues consist of certain Payments in Lieu of Taxes, or PILOTS, to be made with respect to the property in the Redevelopment Area and Economic Activity Tax Revenues derived from the Redevelopment Area, all as described herein under the caption "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS." The portion of the Incremental Tax Revenues consisting of Economic Activity Tax Revenues is subject to annual appropriation by the City. Additionally, the TIF Project has been approved by the State to receive the benefit of 50% of the increase in state income tax from net new jobs in the Redevelopment Area up to certain maximum amounts (the "State Income Tax Revenues"), which funds are subject to annual appropriation by the Missouri General Assembly. Any such funds received by the City from the State are included within the definition of Economic Activity Tax Revenues for the purposes of this Official Statement. To date, both the City and the State have appropriated applicable Incremental Tax Revenues each year and PILOTS have been deposited in the Special Allocation Fund associated with the TIF in conformance with Missouri law. Tax Increment Financing for the Project terminates in the year 2025 pursuant to Missouri law. The pledge of the Incremental Tax Revenues to the repayment of the Series 2017 Bonds is subordinate to the pledge of such revenues securing the Series 2017 Levee District Bonds, Series 2011A Bonds, the Series 2014 Bonds, and any additional bonds issued under the trust indentures related to such bonds. 10 Tax Increment Financing Overview. Tax increment financing is a procedure whereby cities and counties encourage the redevelopment of designated areas. The theory of tax increment financing is that, by encouraging redevelopment projects, the value of real property in a redevelopment area should increase. When tax increment financing is adopted for a redevelopment area, the assessed value of real property in the redevelopment area is frozen for tax purposes at the current base level prior to the construction of improvements. The owners of the property continue to pay property taxes at the base level. As the property is improved, the assessed value of real property in the redevelopment area should increase above the base level. By applying the tax rate of all taxing districts having taxing power within the redevelopment area to the increase in assessed valuation of the improved property over the base level, a "tax increment" is produced. The owners of property pay the tax increments, referred to as "payments in lieu of taxes" or "PILOTS," in the same manner as regular property taxes. The payments in lieu of taxes are transferred by the collecting agency to the treasurer of the city or county and deposited in a "special allocation fund." All or a portion of the moneys in the fluid are used to pay directly for redevelopment project costs or to retire bonds or other obligations issued to pay such costs. The 7TFAct. The TIF Act was enacted in 1982 and has been amended several times subsequent to its enactment. The constitutional validity of the TIF Act (prior to the amendments) was upheld by the Missouri Supreme Court in Tax Increment Financing Commission of Kansas City, Missouri v. J.E. Dunn Construction Co., Inc., 781 S.W.2d 70 (Mo. 1989) (en banc). The TIF Act authorizes cities and counties to provide long- term financing for redevelopment projects in "blighted" and "conservation" areas (as defined in the TIF Act) through the issuance of bonds and other obligations. Prior to the amendments to the TIF Act, such obligations were payable solely from payments in lieu of taxes within a designated redevelopment project area. Under the amendments to the TIF Act, such obligations are also payable from economic activity taxes from the designated redevelopment project area, subject to annual appropriation. Economic activity taxes include earnings, franchise, sales and utilities taxes but exclude personal property taxes, hotel/motel taxes, licenses, fees and special assessments. The validity of certain portions of amendments to the TIF Act relating to the capture of economic activity revenues was upheld by the Missouri Supreme Court in County of Jefferson v. QuikTrip Corporation, 912 S.W.2d 487 (Mo. 1995). Although Payments in Lieu of Taxes may be irrevocably pledged to the repayment of the Bonds, Economic Activity Taxes are subject to annual appropriation by the governing body of the City, and there is no obligation on the part of the governing body to appropriate Economic Activity Taxes in any year beyond the current fiscal year. In addition, certain projects may receive the benefit of the State Income Tax Revenues, which funds are subject to annual appropriation by the Missouri General Assembly. The State has approved the City's application for the use of such revenues. Originally, the City received 50% of the general fund portion of State sales tax revenues generated within the Redevelopment Area. However, this was changed to State Income Tax Revenues in December 2011. The transfer by the State of the State Income Tax Revenues is subject to annual appropriation each year by the General Assembly for the projects approved that year. The Missouri Department of Economic Development (the "DED") currently intends to seek a single, aggregate appropriation for all projects approved that year, unless an applicant requests a specific appropriation for its project. The state appropriation is limited to the amount approved by DED on an annual basis. While it is anticipated that this commitment will be for the term recommended by DED, the General Assembly is not legally bound to either approve the appropriation or continue the appropriation in future years. Amendments to the TIF Act have been proposed in each legislative session during recent years. In connection with proposed amendments to the TIF Act that may be introduced in future legislative sessions, it is not possible to predict the nature of such proposed amendments or whether such proposed amendments to the TIF Act will become law during future sessions of the General Assembly. For a discussion of the effect of potential litigation involving the TIF Act, see the caption "BONDOWNERS' RISKS — Tax Increment Financing Litigation" in this Official Statement. -7- Assessments and Collections of Ad Valorem Taxes. The City and the Redevelopment Area are located within Platte County, Missouri (the "County"). On or before October 1 in each year, each political subdivision located within the County which imposes ad valorem taxes (the "Taxing Districts") estimates the amount of taxes that will be required during the next succeeding fiscal year to pay interest falling due on general obligation bonds issued and the principal of bonds maturing in such year and the costs of operation and maintenance plus such amounts as shall be required to cover emergencies and anticipated tax delinquencies. The Taxing Districts certify the amount of such taxes to be levied, assessed and collected on all taxable tangible property in the County to the County Assessor by September 1. All taxes levied must be based upon the assessed valuation of land and other taxable tangible property in the County as shall be determined by the records of the County Assessor and must be collected and remitted to the Taxing Districts. All the laws, rights and remedies provided by the laws of the State for the collection of State, county, city, school and other ad valorem taxes are applicable to the collection of taxes authorized to be collected in the Redevelopment Area. The Missouri Constitution requires uniformity in taxation of real property by directing such property to be sub -classified as agricultural, residential or commercial and permitting different assessment ratios for each subclass. Residential property is currently assessed at 19% of true value in money, commercial property is assessed at 32% of true value in money, and agricultural property is assessed at 12% of true value in money. The phrase "true value in money" has been held to mean "fair market value" except with respect to agricultural property. The County Assessor assesses real property within the County. The County Assessor is responsible for preparing the tax roll each year and for submitting the tax roll to the Board of Equalization. The Board of Equalization has the authority to question and determine the proper values of real property and then adjust and equalize individual properties appearing on the tax rolls. The County Collector collects taxes for all Taxing Districts within the County limits. The County Collector deducts a commission for his services. After such collections and deductions of commission, taxes are distributed according to the Taxing District's pro rata share. Taxes are levied on all taxable property based on the equalized assessed value thereof determined as of January 1 in each year. Under Missouri law, each property must be reassessed every two years (in odd— numbered years). The County Collector prepares the tax bills and mails them to each taxpayer in September. Payment is due by December 31, after which they become delinquent and accrue a penalty of one percent per month. In the event of an increase in the assessed value of a property, notice of such increase must be given to the owner of the affected property, which notice is generally given in May. Valuation of Real Property. The County Assessor must determine the assessed value of a property based upon the State law requirement that property be valued at its true value in money. For agricultural land, true value is based on its productive capability. As to residential and commercial property, true value in money is the fair market value of the property on the valuation date. The fair market value is arrived at by using the three universally recognized approaches to value: the cost approach, the sales comparison approach and the income approach. The cost approach is typically applied when a property is newly constructed and is based on the principle of substitution. This principle states that no informed buyer will pay more for a property than the cost to reproduce or replace the property. Value is determined under the cost approach by adding the estimated land value to the replacement or reproduction cost reduced by estimated depreciation. Courts have held, however, that construction cost alone is not a proper basis for determining true value in money and that all factors which affect the use and utility of the property must be considered. -8- The sales comparison approach determines value based upon recent sales prices of comparable properties. Comparable sales are adjusted for differences in properties by comparing such items as sales price per square foot and net operating income capitalization rates. The income approach estimates market value by discounting to present value a stream of estimated net operating income. First, the property's gross potential income is estimated based on gross rents being generated at the property. A vacancy allowance is then deducted to arrive at effective gross income. Next, allowable operating expenses are deducted to arrive at an estimate of the property's net operating income. Finally, the net operating income is divided by an appropriate capitalization rate to arrive at the estimated present value of the income stream. Appeal of Assessment. State statutes set up various mechanisms for a property owner to appeal the assessment of a tax on its property. Typically, there are four issues that can be raised in property tax appeals including overvaluation, uniformity, misclassification and exemption. Overvaluation appeals are the most common appeals presented by taxpayers. An overvaluation appeal requires the taxpayer to prove that the true value in money of the property is less than that determined by the assessor. Uniformity appeals are based on the assertion that other property in the same class and county as the subject property is assessed at a lower percentage of value than the subject property. A misclassification appeal is based on an assertion that assessing authorities have improperly sub -classified a property. Exemption appeals are based on claims that the property in question is exempt from taxation. Overvaluation appeals, for the most part, must be made administratively, first, to the Board of Equalization and then to the State Tax Commission within prescribed time periods following notice of an increase in assessment. Appeals to the Board of Equalization must be filed with the County Assessor on or before the third Monday in June of each year. Appeals to the State Tax Commission must be filed by the later of August 15 and 30 days after the date of the final decision of the Board of Equalization. Where valuation is not an issue, appeals must be taken directly to the State Circuit Court rather than the State Tax Commission. If an appeal is pending on December 31, the due date for the payment of taxes, State statute provides a procedure for the payment of taxes under protest. If taxes are paid but not under protest, the taxpayer cannot recover the amount paid unless that taxes have been mistakenly or erroneously paid. Application for a refund of mistakenly or erroneously paid taxes must be made within one year after the tax in dispute was paid. Typically, only that portion of the taxes being disputed is identified as being paid under protest, unless a claim of exemption is being asserted. The portion of the tax paid under protest is required to be held in an interest bearing account. Unless an appeal before the Board of Equalization or State Tax Commission is pending, suit must be brought by the taxpayer to resolve the dispute within 90 days, or the escrowed funds will be released to the Collector of Revenue and distributed to the Taxing Districts. Reassessment and Tax Rate Rollback. As previously stated, a general reassessment of all property in the State is required to be conducted every two years. When, as a result of such reassessment, the assessed valuation within a Taxing District increases by more than an allowable percentage, the Taxing District is required to roll back the rate of tax within the Taxing District so as to produce substantially the same amount of tax revenue as was produced in the previous year increased by an amount called a "preceding valuation factor." A "preceding valuation factor" is a percentage increase or decrease based on the average annual percentage changes in total assessed valuation of the County over the previous three or five years, whichever is greater, adjusted to eliminate the effect of boundary changes, changes from State to County assessed property, general reassessment and State ordered changes. The Hancock Amendment. A constitutional amendment limiting taxation and government spending was approved by Missouri voters on September 4, 1980, and went into effect with the 1981-82 fiscal year. The amendment (Article X, Section 22(a) of the State Constitution and popularly known as the Hancock Amendment) limits the rate of increase and the total amount of taxes that shall be imposed in any fiscal year, and provides that the limit shall not be exceeded without voter approval. Provisions are included in the Hancock Amendment for rolling back tax rates to produce an amount of revenues equal to that of the previous year if the definition of the tax base is changed or if property is reassessed. The tax levy on the assessed valuation of new construction is exempt from this limitation in the initial year of new construction. Tax Delinquenciex Taxes or PILOTS on real estate that remain unpaid on the first day of January, annually, are delinquent, and the County Collector is empowered to enforce the lien of the taxing jurisdictions thereon. Whenever the County Collector is unable to collect any taxes on the tax roll, having diligently endeavored and used all lawful means to do so, he is required to compile lists of delinquent tax bills collectible by him. All lands and lots on which taxes are delinquent and unpaid are subject to suit to collect delinquent tax bills or suit for foreclosure of the tax liens. Upon receiving a judgment, the Sheriff must advertise the sale of the land, fixing the date of sale within 30 days after the first publication of the notice. Delinquent taxes, with penalty, interest and costs, may be paid to the County Collector at any time before the property is sold therefor. No action for recovery of delinquent taxes shall be valid unless initial proceedings therefor are commenced within five years after delinquency of such taxes. Economic Activity Tax Revenuer The Economic Activity Tax Revenues that will be pledged to the payment of the Bonds, subject to annual appropriation, are 50% of the total additional revenue from taxes, penalties and interest imposed by the City or other Taxing Districts which are generated by economic activities within the redevelopment project area over the amount of such taxes generated by economic activities within the redevelopment project area in the calendar year prior to the approval of tax increment financing for such redevelopment project area, but excluding any taxes imposed on sales or charges for sleeping rooms paid by transient guests of hotels and motels, taxes levied pursuant to Section 70.500, RSMo., licenses, fees or special assessments, other than payments in lieu of taxes, and personal property taxes and taxes levied for the purpose of public transportation pursuant to Section 94.660, RSMo. Retail businesses are required to collect the sales tax from purchasers at the time of sale, and pay said amounts to the Department of Revenue of the State with the filing of returns, except for the sales tax on motor vehicles, trailers, boats and outboard motors, which is due at the time application is made for title and registration. The sales volume of a retail business determines the frequency of payments made to the Department of Revenue of the State. In most cases, the retail businesses in the City make monthly payments to the Department of Revenue of the State, which are due on the tenth day of each calendar month for sales taxes collected in the preceding calendar month. Retail businesses located in the City submit applications to the City for a merchant's license and an occupancy permit, and before such license and permit are awarded verification of a tax identification number from the State is made by the City. In the event of a failure by a retail business to remit sales taxes, interest and penalties, the unpaid amount may become a lien in the nature of a judgment lien against the delinquent taxpayer. In the event of overpayment by any retail business as a result of error or duplication, provision is made under State law for refunds. Pursuant to the State law, taxpayers who promptly pay their sales taxes are entitled to retain 2% of the amount of taxes owed. Within 30 days of receipt of sales taxes by the Department of Revenue of the State, the Director of the Department of Revenue remits to the State Treasurer for deposit in a special trust fund for the benefit of each political subdivision entitled to a sales tax distribution the amount of such sales tax receipts less 1% of such amount which constitutes a fee paid to the State for collecting and distributing the tax. The State Treasurer then distributes moneys on deposit in the special trust fund on behalf of each such political subdivision to such political subdivision on a monthly basis. The Redevelopment Plan The City previously approved the Redevelopment Plan, as amended and a Redevelopment Project Area I in connection therewith ("Redevelopment Area I"), pursuant to the TIF Act, which TIF Redevelopment Plan has as its objectives a planned business community within the city limits of Riverside changing the development pattern from vacant land to industrial and commercial uses. The City approved subsequent -10- amendments to the TIF Redevelopment Plan, including a 2006 amendment that created a Redevelopment Project Area 1/III ("Redevelopment Area VIII," together with Redevelopment Area I, the "Redevelopment Area"). The most recent amendment to the TIF Redevelopment Plan was completed in 2007. This amendment removed property originally included in the Redevelopment Area. The City does not currently anticipate any further amendments to the Redevelopment Area. The City may amend the TIF Redevelopment Plan in the future related to currently ongoing and future projects. Throughout the years, numerous phases have been activated within the Redevelopment Area. Set forth below are the different phases, the date on which they were activated, and the date on which PILOTS and EATS will cease to be collected pursuant to the TIF Act: Phase* Activation Collection Ends A 2/4/1997 2/4/2020 B 2/4/1997 2/4/2020 C 2/4/1997 2/4/2020 D 2/4/1997 2/4/2020 E 8/19/1997 8/19/2020 F 5/8/1998 5/8/2021 G 5/5/1999 5/5/2022 H 5/5/1999 5/5/2022 I 5/5/1999 5/5/2022 J 12/7/1999 12/7/2022 L 10/9/2001 10/9/2024 M 12/17/2002 12/17/2025 N 12/28/2005 12/28/2028 O 1/31/2006 1/31/2029 Final 7/11/2006 7/11/2029 * Phase K has been omitted because it was not activated. The TIF Redevelopment Plan contemplates the redevelopment of an area located generally on the north bank of the Missouri River along Interstate 635 at Highway 69. The City designated the Redevelopment Area as a blighted area under the TIF Act. The Redevelopment Area was originally approximately 1,800 acres. However, certain property was subsequently removed leaving the size of the Redevelopment Area as approximately 911 acres. Exclusive of private development, overall costs for improvements completed pursuant to the TIF Redevelopment Plan were approximately $159,635,000, including approximately $47,000,000 for road, highway and utility improvements, environmental remediation and soft costs, approximately $100,000,000 in levee improvements and approximately $12,635,000 for a highway interchange. These improvements have been substantially completed. Approximately $55,100,000 of the cost of the levee improvements was funded by the federal government. The proceeds of the Refunded Bonds, as well as the bonds refunded by the Series 2017 Levee District Bonds and the bonds issued by the City that were refunded by the Series 2011A Bonds and the Series 2014 Bonds, were used to pay various costs of the TIF Project under the TIF Redevelopment Plan, including levee improvements and infrastructure costs. -11- Set forth below are historical Incremental Tax Revenues for the years 2011 through 2016: TIF District Revenues 2011 2012 2013 2014 2015 2016 Payments in Lieu of Taxes $2,119,637 $2,189,092 $2,220,027 $2,483,902 $3,365,041 $4,110,312 Economic Activity Taxes 308,007 386,479 351,302 264,458" 363,758 330,377 State Tax Increment Funds* 83,016 100,000 846,259 1,135,422 1,442,955 2,247,758 Land Sales used to Redeem Debt 310.000 405,000 930,000 385,000 0 268,875 Total TIF District Revenues $2,820,660 $3,080,571 $4,347,588 $4,268,782 $5,171,754 $6,957,322 * Decrease in Economic Activity Taxes due to a business closing within the Redevelopment Area. ** For purposes of this table, State Increment Funds are shown separately from Economic Activity Taxes. Source: City Set forth below are projected Incremental Tax Revenues for the years 2017 through 2022: TIF District Revenues" 2017 2018 2019 2020 2021** 2022 Payments in Lieu of Taxes $4,498,952 $4,916,000 $5,241,000 $5,441,000 $4,064,000 $4,406,000 Economic Activity Taxes 305,712 300,000 300,000 300,000 60,000 60,000 State Tax Increment Funds* 2,492,628 2,464,000 2,485,000 2,507,000 2,529,000 2,551,000 Land Sales used to Redeem Debt 437,336 0 0 0 0 0 Total TIF District Revenues $7,734,628 $7,680,000 $8,026,000 $8,248,000 $6,653,000 $7,017,000 * For purposes of this table, State Increment Funds are shown separately from Economic Activity Taxes. ** Assumes no additional development beyond existing projects. *** PILOTs from Argosy Casino roll off in 2021. Source: City The State is not obligated to maintain its current sales tax rate or income tax rate and in 2014 enacted a law (Senate Bill 409) that will lower future income tax rates. Senate Bill 509, enacted over the Governor's veto, triggers a reduction in the State's top marginal income tax rate if State tax revenues exceed a baseline value by at least $150,000,000. See "BONDOWNERS' RISKS" herein. [Remainder of page intentionally blank.] -12- Set forth below is the projected debt service coverage for the years 2017 through 2020: Debt Service Coverage 2017 2018 2019 2020 Total TIF District Revenues $7,734,628 $7,680,000 $8,026,000 $8,248,000 Series 2011A Bonds and Series 2014 Bonds Debt Service $1,750,619 $1,767,069 $1,770,831 $1,419,381 Series 2017 Levee District Bonds Debt Series 2017 Bonds Debt Service $2,785,400 $2,781,400 $2,784,000 Service` $980,525 $917,478 $920,083 $919,250 Available TIF Revenues $5,003,484 $4,995,453 $5,335,086 $5,909,369 Series 2007 Bonds/Series 2017 Bonds Debt Service $3,129,063 $2,838,669 $2,783,050 $2,785,200 Coverage Ratio 1.60 1.76 1.92 2.12 * City pays assessments on City -owned property. If City -owned property is sold, the City's portion of the debt service decreases. Source: City Set forth below is the projected debt service coverage for the years 2021 through 2025: Debt Service Coverage 2021" 2022 2023 2024 2025 Total TIF District Revenues $6,553,000 $7,017,000 $7,157,000 $6,951,000 $4,460,000 Series 2011A Bonds and Series 2014 Bonds Debt Service - - - - - Series 2017 Levee District Bonds Debt Service $921,250 $923,117 $923,917 $923,650 $925,317 Available TIF Revenues $5,631,750 $6,093,883 $6,233,083 $6,027,350 $3,534,683 Series 2017 Bonds Debt Service $2,785,400 $2,781,400 $2,784,000 $2,783,750 $2,782,500 Coverage Ratio 2.06 2.19 2.24 2.17 1.27 * PILOTs from Argosy Casino roll off in 2021 Source: City -13- Development East of Horizons Parkway On May 10, 2011, the City • Briarcliff Realty, LLC executed a Master Development Agreement (the "Agreement") related • the development of approximately 260 acres in the Redevelopment Area (the "MDA Property"), a portion of which is currently owned by the Authority and serves as partial security for the Refunded Bonds, The MDA Property is substantially bounded by Honizons Parkway to the west, 635 to the south and east and the BNSF railroad tracks to the north. Subsequently, the development rights within the Agreement were transferred to NorthPoint Development LLC to complete the project, To date, pursuant to the Agreement, the City (through the Authority) sold approximately 92.73 acres for development upon which seven buildings have been privately completed for a total of approximately 1,435,698 square feet of net usable commercial space which is believed to be substantially fully leased and currently occupied by 18 companies with total employment of 1,344. There is currently an approximately 412,065 square foot building under construction. The City estimates the private development covered by the Agreement has exceeded $70,960,553. The remaining acreage held by the Authority subject to the Agreement is approximately 150 acres. [Remainder of page intentionally blank.] M is willing to commit its annual appropriation obligation to the repayment of the Financing Payments with respect to such Additional Bonds. This means that the City issue or cause to be issued Additional Bonds on a parity with the Series 2017 Bonds even if the Incremental Tax Revenues are not sufficient to provide for the Financing Payments on the Series 2017 Bonds, without regard to the proposed Additional Bonds. The lien on the Series 2017 Bonds on the Incremental Tax Revenues is subordinate to the lien of the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds (together with any bonds issued on a parity with such bonds) on such revenues. While the City currently projects that there will be sufficient Incremental Tax Revenues to provide for the Financing Payments on the Series 2017 Bonds as well as required payments on the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein, there can be no assurance that such projections will be realized. As a consequence, prospective investors should evaluate the likelihood that the City will continue to appropriate moneys sufficient to make the Financing Payments under the Financing Agreement if Incremental Revenues are not sufficient to make the Financing Payments on the Series 2017 Bonds as well as required payment son the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS," "PLAN OF FINANCING — The Redevelopment Plan" and `BONDOWNERS' RISKS" herein. Sources and Uses of Funds Sources of Funds*: Principal amount of the Series 2017 Bonds $18,370,000.00 Transfer from Series 2007 Debt Service Reserve Fund 1,000,000.00 Reoffering Premium 1,767,404.35 Total sources of funds 21,137.404.35 Uses of Funds: Deposit to Escrow Fund $19,744,107.29 Deposit to Debt Service Reserve Fund 1,000,000.00 Costs of Issuance (including Underwriters' Discount) 393,297.06 Total uses of funds 21,137,404.35 *Note: At the time of closing, funds in the Series 2007 Debt Service Reserve Fund, in the amount of $2,452,215.24 will be released to the City. THE SERIES 2017 BONDS The following is a summary of certain terms and provisions of the Series 2017 Bonds. Reference is hereby made to the Series 2017 Bonds and the provisions with respect thereto in the Indenture and the Financing Agreement for the detailed terms and provisions thereof. General Terms The Series 2017 Bonds are being issued in the principal amount stated on the cover page, are dated the date of delivery thereof, will bear interest from the date thereof or from the most recent interest payment date to which interest has been paid at the rates per annum set forth on the inside cover page, payable semiannually on May 1 and November 1 of each year, beginning on May 1, 2018, and will mature on May 1 in the years shown on the maturity schedule set forth on the inside cover page. The Series 2017 Bonds are issuable as fully registered bonds in the denomination of $5,000 or any integral multiple thereof. The principal of and redemption premium, if any, on the Series 2017 Bonds are payable at the principal corporate trust office of the Trustee. The interest on the Series 2017 Bonds is payable (a) by check or draft mailed by the Trustee to the -16- persons who are the registered Owners of the Series 2017 Bonds as of the close of business on the 15th day of the month preceding the respective interest payment dates, as shown on the bond registration books maintained by the Trustee, or (b) at the expense of the registered owner, by electronic transfer of immediately available funds at the written request of any registered owner of $1,000,000 or more in aggregate principal amount of Series 2017 Bonds, if such written notice specifying the electronic transfer instructions is provided to the Trustee not less than 15 days prior to the Interest Payment Date. Purchases of the Series 2017 Bonds will be made in book -entry only form (as described immediately below), in the denomination of $5,000 or any integral multiple thereof. Purchasers of the Series 2017 Bonds will not receive certificates representing their interests in the Series 2017 Bonds purchased. If the specified date for any payment on the Series 2017 Bonds is a date other than a Business Day, such payment may be made on the next Business Day without additional interest and with the same force and effect as if made on the specified date for such payments. Book -Entry Only System General. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Series 2017 Bonds. The Series 2017 Bonds will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered Bond certificate will be issued for each maturity of the Series 2017 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. So long as Cede & Co., as nominee of DTC, is the registered owner of the Series 2017 Bonds, the Beneficial Owners of the Series 2017 Bonds will not receive or have the right to receive physical delivery of the Series 2017 Bonds, and references herein to the Bondowners or registered Owners of the Series 2017 Bonds shall mean Cede & Co. and shall not mean the Beneficial Owners of the Series 2017 Bonds. DTC and its Participants. DTC, the world's largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchase of Ownership Interests. Purchases of Series 2017 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2017 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2017 Bond (`Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the -17- Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2017 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2017 Bonds, except in the event that use of the book -entry system for the Series 2017 Bonds is discontinued. Transfers. To facilitate subsequent transfers, all Series 2017 Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2017 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2017 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2017 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Notices. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2017 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2017 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Series 2017 Bonds may wish to ascertain that the nominee holding the Series 2017 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Series 2017 Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Voting. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2017 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Series 2017 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments of Principal and Interest. Redemption proceeds, distributions, and dividend payments on the Series 2017 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Authority or the Trustee, on the payment date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trustee, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. -18- Discontinuation of Book Entry System. DTC may discontinue providing its services as depository with respect to the Series 2017 Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The Authority may decide to discontinue use of the system of book -entry -only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC. The information above concerning DTC and DTC's book -entry system has been obtained from sources that the Authority and the City believe to be reliable, but is not guaranteed as to accuracy or completeness by and is not to be construed as a representation by the Authority, the City, the Trustee or the Underwriter. The Authority, the City, the Trustee and the Underwriter make no assurances that DTC, Direct Participants, Indirect Participants or other nominees of the Beneficial Owners will act in accordance with the procedures described above or in a timely manner. Redemption The Series 2017 Bonds are not subject to optional or mandatory redemption prior to maturity. Registration, Transfer and Exchange The Series 2017 Bonds will be issued in fully registered form in denominations of $5,000 and any integral multiple thereof. The Series 2017 Bonds will be issued in fully registered form, and each Series 2017 Bond will be registered in the name of the owner thereof on the registration books maintained by the Trustee. The Series 2017 Bonds are transferable by the registered holder thereof or by such holder's attorney duly authorized in writing upon presentation thereof at the principal corporate trust office of the Trustee. Any Series 2017 Bond may be exchanged at the principal corporate trust office of the Trustee for a like aggregate principal amount of Series 2017 Bonds of the same maturity of other authorized denominations. The Trustee and the Authority may charge a fee covering taxes and other governmental charges in connection with any exchange, change in registration or transfer of any Series 2017 Bond. The Trustee shall not be required to register the transfer of or exchange any Series 2017 Bond that has been called or selected for call for redemption or during the period of fifteen days next preceding the first mailing of notice of redemption. The foregoing provisions for the registration, transfer and exchange of the Series 2017 Bonds will not be applicable to purchasers of the Series 2017 Bonds so long as the Series 2017 Bonds are subject to the DTC or other book - entry only system. CUSIP Numbers It is anticipated that CUSIP identification numbers will be printed on the Series 2017 Bonds, but neither the failure to print such numbers on any Series 2017 Bonds, nor any error in the printing of such numbers, shall constitute cause for a failure or refusal by the purchaser thereof to accept delivery of and pay for any Series 2017 Bonds. SECURITY AND SOURCES OF PAYMENT FOR THE BONDS General The Series 2017 Bonds will be issued under and will be equally and ratably secured under the Indenture, which will assign and pledge to the Trustee (1) certain rights of the Authority under the Financing Agreement, including the right to receive Financing Payments thereunder, which Financing Payments are secured by a subordinate lien on the Incremental Tax Revenues deposited into the Special Allocation Fund and -19- (2) the funds and accounts, including the money and investments in them, which the Trustee holds under the terms of the Indenture. Special, Limited Obligations The Series 2017 Bonds and the interest thereon are special, limited obligations of the Authority, payable solely from (1) Financing Payments to be made by the City under the Financing Agreement, (2) a Debt Service Reserve Fund established for the Series 2017 Bonds, and (3) certain funds held by the Trustee under the Indenture, and not from any other fund or source of the Authority, and are secured under the Indenture and the Financing Agreement as described herein. Pursuant to the Financing Agreement, the City has pledged (i) a subordinate lien on available Incremental Tax Revenues (defined as Payments in Lieu of Taxes (or PILOTs) and Economic Activity Taxes (or EATs), both described herein) and (ii) subject to annual appropriation, legally available revenues of the City. Except as provided in the following sentence, all payments by the City under the Financing Agreement are subject to annual appropriation. As noted above and as more fully described herein, the City's obligation to make the Financing Payments under the Financing Agreement is secured by a subordinate lien on the Incremental Tax Revenues, a portion of which described herein as the PILOTS, are not subject to annual appropriation. The Series 2017 Bonds shall not constitute a debt or liability of the State or of any political subdivision thereof within the meaning of any State constitutional provision or statutory limitation and shall not constitute a pledge of the faith and credit of the State or of any political subdivision thereof. The issuance of the Series 2017 Bonds shall not directly or indirectly obligate the Authority, its officers, directors or employees, the State or any political subdivision thereof to provide any funds for their payment. The issuance of the Series 2017 Bonds shall not, directly, indirectly, or contingently, obligate the State or any political subdivision thereof to levy any form of taxation therefor or to make any appropriation for their payment. The Authority has no taxing power. As the City has sold property within the Redevelopment Area to private parties and private parties have completed private projects, the portion of the property within the Levee District owned by the Authority and the City has been reduced and the value of taxable property within the Redevelopment Area has increased. However, the City makes no representation regarding its expectations for future sales of property, and the rate at which additional property will be subject to taxation in the Redevelopment Area. The lien of the Series 2017 Bonds on the Incremental Tax Revenues is subordinate to the lien of the Series 2014 Bonds, the Series 2011A Bonds and the Series 2017 Levee District Bonds on such revenues. Payment of the principal of and interest on the Series 2017 Bonds is not secured by any mortgage on the Project or any other facilities or property of the City. The Financing Agreement Financing Payments and Other Payments. Under the Financing Agreement, the City is required to make Financing Payments to the Trustee for deposit into the Debt Service Fund in amounts sufficient to pay the principal of and interest on the Series 2017 Bonds when due. Except as provided in the following paragraph, the City's obligations to pay Financing Payments and Additional Payments shall be limited, special obligations of the City payable solely from, subject to annual appropriation by the City as described above, all legally available revenues of the City and from amounts pledged to secure repayment of the Financing Payments in the Special Allocation Fund as provided in the Authorizing Ordinance. The taxing power of the City is not pledged to the payment of the Financing Payments as to principal or interest. The City's obligation to pay Financing Payments and Additional Payments shall not constitute general obligations of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction. -20- Notwithstanding the foregoing, PILOTS deposited into the Special Allocation Fund are not subject to annual appropriation and are pledged by the City pursuant to the Authorizing Ordinance to secure Financing Payments and Additional Payments. The lien of the Series 2017 Bonds on the Incremental Tax Revenues is subordinate to the lien of the Series 2014 Bonds, the Series 2011A Bonds and the Series 2017 Levee District Bonds (together with any bonds issued on a parity with such bonds) on such revenues. Annual Appropriations. The City intends, on or before the last day of each Fiscal Year, to budget and appropriate, specifically with respect to the Financing Agreement, moneys sufficient to pay all the Financing Payments and reasonably estimated Additional Payments for the next succeeding Fiscal Year. The City shall deliver written notice to the Trustee no later than 15 days after the commencement of its Fiscal Year stating whether or not the Board of Aldermen has appropriated funds sufficient for the purpose of paying the Financing Payments and reasonably estimated Additional Payments to become due during such Fiscal Year. If the Board of Aldermen shall have made the appropriation necessary to pay the Financing Payments and reasonably estimated Additional Payments to become due during such Fiscal Year, the failure of the City to deliver the foregoing notice on or before the 15th day after the commencement of its Fiscal Year shall not constitute an Event of Nonappropriation and, on failure to receive such notice 15 days after the commencement of the City's Fiscal Year, the Trustee shall request written confirmation from the City of the fact of whether or not such appropriation has been made. If the Board of Aldermen shall not have made the appropriation necessary to pay the Financing Payments and Additional Payments reasonably estimated to become due during such succeeding Fiscal Year, the failure of the City to deliver the foregoing notice on or before the 15th day after the commencement of its Fiscal Year shall constitute an Event of Nonappropriation. Annual Budget Request. The City Administrator or other officer of the City at any time charged with the responsibility of formulating budget proposals shall include in the budget proposals submitted to the Board of Aldermen, in each Fiscal Year in which this Financing Agreement shall be in effect, an appropriation for all the Financing Payments and reasonably estimated Additional Payments required for the ensuing Fiscal Year, it being the intention of the City that the decision to appropriate or not to appropriate under this Financing Agreement shall be made solely by the Board of Aldermen and not by any other official of the City. The City intends, subject to the provisions above respecting the failure of the City to budget or appropriate funds to make Financing Payments and Additional Payments, to pay the Financing Payments and Additional Payments under the Financing Agreement. The City reasonably believes that legally available funds in an amount sufficient to make all Financing Payments and Additional Payments during each Fiscal Year can be obtained. The City further intends to do all things lawfully within its power to obtain and maintain funds from which the Financing Payments and Additional Payments may be made, including making provision for such Financing Payments and Additional Payments to the extent necessary in each proposed annual budget submitted for approval in accordance with applicable procedures of the City and to exhaust all available reviews and appeals in the event such portion of the budget is not approved. The City's Director of Finance is directed to do all things lawfully within such person's power to obtain and maintain funds from which the Financing Payments and Additional Payments may be paid, including making provision for such Financing Payments and Additional Payments to the extent necessary in each proposed annual budget submitted for approval or by supplemental appropriation in accordance with applicable procedures of the City and to exhaust all available reviews and appeals in the event such portion of the budget or supplemental appropriation is not approved. Notwithstanding the foregoing, the decision to budget and appropriate funds is to be made in accordance with the City's normal procedures for such decisions. Financing Payments to Constitute Current Expenses of the City. The Authority and the City acknowledge and agree that the Financing Payments and Additional Payments under the Financing Agreement shall constitute currently budgeted expenditures of the City, and shall not in any way be construed or interpreted as creating a liability or a general obligation or debt of the City in contravention of any applicable constitutional or statutory limitations or requirements concerning the creation of indebtedness by the City, nor shall anything contained in the Financing Agreement constitute a pledge of the general credit, tax revenues, funds or moneys of the City. The City's obligations to pay Financing Payments and Additional Payments under the Financing Agreement shall be from year to year only, and shall not constitute a mandatory payment -21- obligation of the City in any ensuing Fiscal Year beyond the then current Fiscal Year. Neither the Financing Agreement nor the issuance of the Series 2017 Bonds shall directly or indirectly obligate the City to levy or pledge any form of taxation or make any appropriation or make any payments beyond those appropriated for the City's then current Fiscal Year, but in each Fiscal Year Financing Payments and Additional Payments shall be payable solely from the amounts budgeted or appropriated therefor out of the income and revenue provided for such year, plus any unencumbered balances from previous years; provided, however, that nothing herein shall be construed to limit the rights of the Owners of the Series 2017 Bonds or the Trustee to receive any amounts which may be realized from the Trust Estate pursuant to the Indenture. Failure of the City to budget and appropriate said moneys on or before the last day of any Fiscal Year shall be deemed an Event of Nonappropriation. Pledge of Incremental Tax Revenues to Secure Financing Payments. The City has pledged the Incremental Tax Revenues derived from the Redevelopment Area to secure its obligations to make the Financing Payments under the Financing Agreement, which pledge is subordinate to the pledge of such revenues securing the Series 2011A Bonds, the Series 2014 Bonds, the Series 2017 Levee District Bonds and any additional bonds issued under the trust indentures related to such bonds. The "Incremental Tax Revenues" consist of (a) PILOTS derived from the Redevelopment Area, and (b) subject to annual appropriation by the City, Economic Activity Tax Revenues received by the City with respect to the Redevelopment Area. Economic Activity Tax Revenues consist of 50% of the City and County sales taxes generated in the Redevelopment Area as well as, for the purposes of this Official Statement, the State Income Tax Revenues (defined above). Any moneys and securities in the Special Allocation Fund not required to pay debt service on such bonds in any year may be used by the City for other reimbursable project costs. PILOTS are those revenues attributable to the increase in the assessed valuation of real property within the Redevelopment Area over and above the initial assessed valuation of real property in the Redevelopment Area as of the date on which tax increment financing for the Redevelopment Area was adopted. Such increase is multiplied by the then current aggregate tax rate applicable to such property to determine the PILOTS. Such PILOTS have been irrevocably pledged by the City to the payment of the Series 2017 Bonds. Economic Activity Tax Revenues under the TIF Act are those revenues attributable to 50% of the increase in tax revenues (other than real property tax revenues) generated by economic activities within a redevelopment area, including sales and utilities taxes, but excluding personal property taxes, hotel/motel taxes, licenses, fees and special assessments. The TIF Project has been approved by the State to receive the benefit of 50% of the increase in the general revenue portion of State Income Tax Revenues, which funds are subject to annual appropriation by the Missouri General Assembly. For the purposes of this Official Statement, any State Income Tax Revenues received by the City are included in the definition of Economic Activity Tax Revenues. The expenditure of Economic Activity Tax Revenues is subject to annual appropriation by the City. There can be no assurances that the City will appropriate such revenues in any year and no ordinance obligates the City to do so. Debt Service Reserve Fund A Series 2017 Debt Service Reserve Fund is established pursuant to the Indenture and is required to be funded in an amount equal to $1,000,000 (the "Debt Service Reserve Fund Requirement"). Amounts in the Series 2017 Debt Service Reserve Fund are to be used to pay principal of and interest on the Series 2017 Bonds to the extent of any deficiency in the Series 2017 Debt Service Fund for such purposes, as further described in the Indenture. Amounts on deposit in the Series 2017 Debt Service Reserve Fund are not pledged to secure any Additional Bonds. -22- The Indenture Under the Indenture, the Authority will pledge and assign to the Trustee, for the benefit of the Bondowners, all of its rights under the Financing Agreement, including all Financing Payments and other amounts payable under the Financing Agreement (except for certain fees, expenses and advances and any indemnity payments payable to the Authority) as security for the payment of the principal of and interest on the Series 2017 Bonds. See "SUMMARY OF THE INDENTURE" in Appendix C hereto. Additional Bonds The Authority from time to time may, in its sole discretion, at the written request of the City, authorize the issuance of Additional Bonds on a parity with the Series 2017 Bonds upon the terms and conditions provided in the Indenture; provided that (1) the terms of such Additional Bonds, the purchase price to be paid therefor and the manner in which the proceeds thereof are to be disbursed shall have been approved by a resolution adopted by the Authority and an ordinance adopted by the City; (2) the Authority and the City shall have entered into a Supplemental Financing Agreement to acknowledge that Financing Payments are revised to the extent necessary to provide for the payment of the principal of, redemption premium, if any, and interest on the Additional Bonds and to extend the term of the Financing Agreement if the maturity of any of the Additional Bonds would otherwise occur after the expiration of the term of the Financing Agreement; (3) the Additional Bonds are issued solely to refund the Series 2017 Bonds; and (4) Authority and the City shall have otherwise complied with the provisions of the Financing Agreement and the Indenture with respect to the issuance of such Additional Bonds. The sole economic test for the issuance of Additional Bonds on a parity with the Series 2017 Bonds and any Additional Bonds then outstanding is whether the City is willing to commit its annual appropriation obligation to the repayment of the Financing Payments with respect to such Additional Bonds. This means that the City may issue or cause to be issued Additional Bonds on a parity with the Series 2017 Bonds even if the Incremental Tax Revenues are not sufficient to provide for the Financing Payments on the Series 2017 Bonds, without resard to the proposed Additional Bonds. The lien on the Series 2017 Bonds on the Incremental Tax Revenues is subordinate to the lien of the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds (together with any bonds issued on a parity with such bonds) on such revenues. While the City currently projects that there will be sufficient Incremental Tax Revenues to provide for the Financing Payments on the Series 2017 Bonds as well as required payments on the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein, there can be no assurance that such projections will be realized. As a consequence, prospective investors should evaluate the likelihood that the City will continue to appropriate moneys sufficient to make the Financing Payments under the Financing Agreement if Incremental Revenues are not sufficient to make the Financing Payments on the Series 2017 Bonds as well as required payments on the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS," "PLAN OF FINANCING — The Redevelopment Plan" and "BONDOWNERS RISKS" herein. [Remainder of page intentionally blank.] -23- CITY FINANCIAL SUMMARY The below table* presents a summary of the City's general fund for the last five fiscal years: Income Statement 2013 2014 2015 Revenues Tax Revenues $ 2,218,801 $ 2,326,593 $ 2,278,955 TIF Revenues 3,432,013 3,883,538 5,123,842 Gaming Revenues 7,133,275 6,399,850 6,303,001 Gaming - Real Estate Income 4,155,181 4,060,295 4,182,418 Other Revenues*** 6,834,786 3,910,923 31275,906 2016 2017** $2,728,321 $2,699,621 6,654,901 6,912,350 6,569,566 6,589,264 4,394,870 4,358,378 2,519,103 2,334,710 Total Revenues $23,774,056 $20,581,199 $21,164,122 $22,866,761 $22,894,323 Expenditures Current Expenditures $10,754,579 $10,954,985 $15,602,021 $11,463,851 $11,642,751 Capital Outlay 16,861,669 7,808,465 4,455,505 2,768,726 2,629,738 Debt Service 5,407,606 5,642,014 4,660,709 5,148,481 5,319,681 Total Expenditures $33,023,854 $24,405,464 $20,262,730 $19,381,058 $19,592,170 Net Revenues Net Revenues $(9,247,798) $(3,824,265) $901,392 3,485,703 3,302,153 Capital Outlay 16,861,669 7,808,465 4,455,505 2,768,726 2,629,738 Net Revenues + Capital Outlay $7,611,871 $3,984,200 $5,356,897 $6,254,429 $5,931,891 *Headings used in the above table are consistent with those set forth in the City's audited financial statements **2017 numbers are unaudited *** Includes the following revenues: (1) Intergovernmental Revenue, (2) Charges for Services, (3) Investment Earnings, (4) Licenses and Fees, (5) Fines and Forfeitures, (6) Recreation Fees, (7) Miscellaneous, (8) Developer Contribution and (9) Proceeds form Sale -Leaseback. Source: City For further detail related to expenditures for capital improvements, additional detail related to gaming revenues, changes to the manner in which the gaming revenues will be applied to funds following the delivery of the Series 2017 Bonds, and financial information concerning the City, see Appendix A. -24- BONDOWNERS' RISKS The following is a discussion of certain risks that could affect payments to be made by the City with respect to the Series 2017 Bonds. Such discussion is not, and is not intended to be, exhaustive and should be read in conjunction with all other parts of this Official Statement and should not be considered as a complete description of all risks that could affect such payments. Prospective purchasers of the Series 2017 Bonds should analyze carefully the information contained in this Official Statement, including the Appendices hereto, and additional information in the form of the complete documents summarized herein and in Appendix C, copies of which are available as described herein. General The Series 2017 Bonds are limited obligations of the Authority payable by the Authority solely from payments to be made by the City pursuant to the Financing Agreement and from certain other funds held by the Trustee under the Indenture. No representation or assurance can be given that the City will realize revenues in amounts sufficient to make such payments under the Financing Agreement with respect to the Series 2017 Bonds. Risk Factors Relating to the City's Obligations to Make Financing Payments General Except as described in "Pledge of Incremental Tax Revenues", below, all payments by the City under the Financing Agreement are subject to annual appropriation. The City currently intends, but is not obligated, to make payments under the Financing Agreement. Risk of Non Appropriation. The City's obligation to make the Financing Payments under the Financing Agreement is subject to annual appropriation, except as noted below (PILOTS). Although the City has covenanted to request annually that the appropriation of the Financing Payments be included in the budget submitted to the Board of Aldermen for each fiscal year, there can be no assurance that such appropriation will be made, and the City is not legally obligated to do so. Pledge of Incremental Tax Revenues. The City's obligation to make the Financing Payments under the Financing Agreement is secured by a subordinate lien on the Incremental Tax Revenues (as described herein), a portion of which, described herein as the PILOTS, are not subject to annual appropriation, while the remainder of which, the EATS, including the State Income Tax Revenues, are subject to annual appropriation by the City and the General Assembly of the State, respectively, as discussed in further detail herein. No portion of the TIF Project is pledged to secure the Series 2017 Bonds. The failure of the City to appropriate sufficient funds in any year would not result in the City losing the use of the TIF Project. While a failure to appropriate Incremental Tax Revenue by the State or the City may not constitute an Event of Default on the Bonds, the Bondowners are substantially relying on annual appropriations by the City for the debt service pursuant to the Financing Agreement for the payment of timely principal and interest on the Series 2017 Bonds. A failure to make payments under the Financing Agreement would constitute an Event of Default on the Series 2017 Bonds for which remedies are limited by the terms of the Financing Agreement and the Indenture. Subordination of Incremental Tax Revenues The City's obligation to make the Financing Payments under the Financing Agreement is secured by a subordinate lien on the Incremental Tax Revenues (as described herein). Accordingly, if Incremental Tax Revenues are insufficient to pay debt service on the Series 2011A, Series 2014 and the City's obligations on the Series 2017 Levee District Bonds, and any additional bonds issued under those indentures there will be no available Incremental Tax Revenues for payment on the Series 2017 Bonds. No Mortgage of any Project or any other Facilities of the City. Payment of the principal and interest on the Series 2017 Bonds is not secured by any mortgage on any Project or any other facilities or property of -25- the City or any developer. Except as provided herein, the Series 2017 Bonds are payable solely from (1) Financing Payments to be made by the City under the Financing Agreement, (2) a Debt Service Reserve Fund established for the Series 2017 Bonds, and (3) certain funds held by the Trustee under the Indenture, and not from any other fund or source of the Authority, and are secured under the Indenture and the Financing Agreement as described herein. Risk Factors Relating to the Collection of Incremental Tax Revenues As noted herein the payment by the City of Financing Payments under the Financing Agreement is secured by a subordinate pledge of the Incremental Tax Revenues (PILOTS and EATS) derived from the Redevelopment Area. Prospective investors should evaluate factors which could cause such Incremental Tax Revenues to be below the City's estimates in order to determine the capacity of the City's legally available revenues to provide for the Financing Payments with respect to the Series 2017 Bonds in the event the Incremental Tax Revenues are not sufficient to make such payments. There are a variety of reasons the collection of Incremental Tax Revenues may not be realized as expected by the City, including but not limited to the following: Risk of Damage or Destruction. The partial or complete destruction of improvements within the Redevelopment Area, as a result of fire, natural disaster or similar casualty event, would adversely impact the collection of the Incremental Tax Revenues. Risk of Failure to Maintain Levels of Assessed Valuations. There can be no assurance that the assessed value of property within the Redevelopment Area will equal or exceed the expected assessed value. Even if the assessed value is initially determined as expected, there can be no assurance that such assessed value will be maintained throughout the term of the Series 2017 Bonds. The property owner has the ability to appeal all assessed value determinations. Changes in State and Local Tax Laws. The City's internal estimates of the Incremental Tax Revenues assume no substantial change in the basis of extending, levying and collecting real property taxes, sales taxes, PILOTS and Economic Activity Tax Revenues. Any change in the current system of collection and distribution of real property taxes, sales taxes, PILOTS or Economic Activity Tax Revenues in the County or the City, including without limitation the reduction or elimination of any such tax, judicial action concerning any such tax or voter initiative, referendum or action with respect to any such tax, could adversely affect the availability of revenues to pay the principal of and interest on the Series 2017 Bonds. The State is not obligated to maintain its current sales tax rate or income tax rate and in 2014 enacted a law (Senate Bill 409) that will lower future income tax rates. Senate Bill 509, enacted over the Governor's veto, triggers a reduction in the State's top marginal income tax rate if State tax revenues exceed a baseline value by at least $150,000,000. The $150,000,000 threshold was satisfied for the first time during the State's fiscal year 2017. Accordingly, the State's top marginal income tax rate will be reduced from 6.0% to 5.9% beginning January 1, 2018 and, by operation of Senate Bill 509, may be reduced by 0.1% each subsequent year until it reaches 5.5%. The projections described herein under the caption "PLAN OF FINANCING" assumes that the State's income tax rates will stay at the rates set forth in Senate Bill 509 for the duration of the Series 2017 Bonds. Any further reductions in the State's income tax rate will reduce the State Income Tax Increment. Reduction in State and Local Tax Rates. Any taxing district authorized to impose sales taxes or levy real property taxes on any real estate included within the Redevelopment Area could lower its tax rate, which would have the effect of reducing the Economic Activity Taxes and/or PILOTS derived from the Redevelopment Area. Changes in the Missouri income tax rates could result in a reduction of the State Income Tax Revenues. -26- Risk of Non Appropriation of Economic Activity Taxes The application of Economic Activity Tax Revenues in the Special Allocation Fund is subject to annual appropriation by the City. Although the City has covenanted to request annually that the appropriation of the Economic Activity Tax Revenues in the Special Allocation Fund be included in the budget submitted to the Board of Aldermen for each fiscal year, there can be no assurance that such appropriation will be made by the Board of Aldermen, and the Board of Aldermen is not legally obligated to do so. Additional Bonds. The sole economic test for the issuance of Additional Bonds on a parity with the Series 2017 Bonds is whether the City is willing to commit its annual appropriation obligation to the repayment of the Financing Payments with respect to such Additional Bonds. Additional Bonds may only be issued to refund the Series 2017 Bonds. This means that the City may issue or cause to be issued Additional Bonds on a parity with the Series 2017 Bonds even if the Incremental Tax Revenues are not sufficient to provide for the Financing Payments relating to the Series 2017 Bonds, without regard to the proposed Additional Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS - Additional Bonds." Changes in Market Conditions. The estimates of the Incremental Tax Revenues used in the City's internal projections are based on the current status of the national and local business economy and assume a future performance of the real estate market similar to the historical performance of such market in the Independence area. However, changes in the market conditions for the City, as well as changes in general economic conditions, could adversely affect the rate of appreciation and/or inflation of the property in the Redevelopment Area and, consequently, the amount of PILOTS and Economic Activity Tax Revenues collected for deposit into the Special Allocation Fund. Sales tax revenues historically have been sensitive to changes in local, regional and national economic conditions. For example, sales tax revenues have historically declined during economic recessions, when high unemployment adversely affects consumption. A decline in general economic conditions could reduce the number and value of taxable transactions and thus reduce the amount of Economic Activity Tax Revenues available for repayment of the Series 2017 Bonds. Appropriation of State Income Tax Revenues The transfer by the State of State Income Tax Revenues is subject to annual appropriation each year by the General Assembly for the projects approved that year. The Missouri Department of Economic Development (the "DED") currently intends to seek a single, aggregate appropriation for all projects approved that year, unless an applicant requests a specific appropriation for its project. The state appropriation is limited to the amount approved by DED on an annual basis. While it is anticipated that this commitment will be for the term recommended by DED, the General Assembly is not legally bound to either approve the appropriation or continue the appropriation in future years. Lack of PILOTS from Certain Property in Redevelopment Area. The City has granted real property tax abatement for various property in the Redevelopment Area to incentivize development. Consequently, such property will not generate PILOTS under the TIF Act during the time that the abatement is in effect. There can be no assurance that the City will not grant real property tax abatement to other businesses which may choose to locate in the Redevelopment Area, and if this occurs such property would not generate PILOTS. Prospective investors should take into account the exemption or possible exemption from real property taxes of certain property in the Redevelopment Area. While the City currently projects that there will be sufficient Incremental Tax Revenues to provide for the Financing Payments on the Series 2017 Bonds as well as required payments on the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein, there can be no assurance that such projections will be realized. As a consequence, prospective investors should evaluate the likelihood that the City will continue to appropriate moneys sufficient to make the Financing Payments under the Financing -27- Agreement if Incremental Revenues are not sufficient to make the Financing Payments on the Series 2017 Bonds as well as required payments on the Series 2017 Levee District Bonds, Series 2014 Bonds and the Series 2011A Bonds as described herein. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS," "PLAN OF FINANCING — The Redevelopment Plan" and "BONDOWNERS RISKS" herein. City's Financial Relationship with Argosy Casino In fiscal year 2017, $10,947,642, or approximately 48% of the City's cash receipts came from the Argosy Casino that is located in the Redevelopment Area. The future realization of gaming revenues from the Argosy Casino at similar levels is dependent upon, among other things, changes in the economic conditions with the City and the surrounding Kansas City metropolitan area, which conditions are unpredictable and cannot be determined at this time. There can be no assurance that future gaming revenue will be sufficient to pay debt service on the Series 2017 Bonds or that the City will appropriate gaming revenue for such purpose. In 2012 Hollywood Casino opened in Wyandotte County, Kansas, approximately 15 miles from Argosy Casino. The developer of the Hollywood Casino is Kansas Entertainment, LLC, a joint venture of Penn National Gaming Inc. and International Speedway Corporation (owner of Kansas Speedway). The first phase of the project includes 2,000 slot machines, 64 table games, restaurants and bars. The proposal also included the second Sprint Cup NASCAR race and Grand -Am sports car road course. In the second phase of the project, a 300 -room hotel with convention space is planned, along with an entertainment district featuring more restaurants and nightclubs, expanded gaming floor, and a spa. The casino is one of four state-owned, privately managed casinos in Kansas and is the fifth casino in the Kansas City metropolitan area. Penn National Ganong Inc. also owns the Argosy Casino in the City. The Hollywood Casino is located in the vicinity of a large mixed used development that includes the Kansas Speedway that hosts NASCAR races and other events, a major league soccer stadium, and other significant retail and hotel development that includes Cabelas, Nebraska Furniture Mart and numerous other smaller shops and restaurants. The City's Argosy -related revenue receipts in fiscal year 2015 were $10,485,419, or approximately 50% of City cash receipts. In fiscal year 2016, Argosy -related revenue receipts for the City were $10,964,436, or approximately 48% of City cash receipts. In fiscal years 2012 through 2014, the City's Argosy -related revenue receipts decreased. These decreases could have been due to a variety of factors, including such things as casino customers choosing the newer Hollywood Casino over the Argosy, development of another casino in the Kansas City metropolitan area, a decline in customer demand for gaming services or similar factors. There can be no assurance that the Argosy -related revenue receipts of the City will not decrease again and such factors could have a material adverse effect on the results of operations of the Argosy Casino, which in turn could have a material adverse effect on the gaming revenue available to the City to pay debt service on the Series 2017 Bonds. See "FINANCIAL INFORMATION CONCERNING THE CITY — City's Financial Relationship with Argosy Casino" in Appendix A hereto. Tax Increment Financing Litigation From time to time cases are filed in a Missouri court challenging certain aspects of the TIF Act. Circuit courts in Missouri are trial courts and decisions in those courts are not binding on other Missouri courts. Circuit court decisions, whether favorable or unfavorable with respect to the constitutionality and application of the TIF Act, may be appealed to a Missouri Court of Appeals, and, ultimately, the Missouri Supreme Court. If the plaintiffs are successful in one or more of the currently pending cases, the court's decision may interpret the requirements of the TIF Act in a manner adverse to the establishment of tax increment financing for the Project Area. It is not possible to predict whether an adverse holding in any -28- current or future litigation would prompt a challenge to the adoption of tax increment financing in the Redevelopment Project Area. If current or future litigation challenging all or any part of the TIF Act were to be applied to the adoption of tax increment financing in the Redevelopment Project Area, the TIF Revenues may not be available to pay principal of and interest on the Series 2017 Bonds and the enforceability of the Indenture could be adversely affected. None of the Authority, the City or any other party involved in the issuance and sale of the Series 2017 Bonds can predict or guarantee the outcome of any currently pending or future litigation challenging the constitutionality or the application of the TIF Act or the application by a court of a potential holding in any case to other tax increment projects. Bond Rating There is no assurance that the rating assigned to the Series 2017 Bonds at the time of issuance will not be lowered or withdrawn at any time, the effect of which could adversely affect the market price for and marketability of the Series 2017 Bonds. Enforcement of Remedies The enforcement of the remedies under the Indenture and the Financing Agreement may be limited or restricted by federal or state laws or by the application of judicial discretion, and may be delayed in the event of litigation to enforce the remedies. State laws concerning the use of assets of political subdivisions and federal and state laws relating to bankruptcy, fraudulent conveyances, and rights of creditors may affect the enforcement of remedies. Similarly, the application of general principles of equity and the exercise of judicial discretion may preclude or delay the enforcement of certain remedies. The legal opinions to be delivered with the delivery of the Series 2017 Bonds will be qualified as they relate to the enforceability of the various legal instruments by reference to the limitations on enforceability of those instruments under (1) applicable bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors' rights, (2) general principles of equity, and (3) the exercise of judicial discretion in appropriate cases. Amendment of Indenture Certain amendments to the Indenture and the Financing Agreement may be made without the consent of or notice to the registered Owners of the Series 2017 Bonds. Such amendments may adversely affect the security for the Series 2017 Bonds. LITIGATION The Authority There is not now pending or, to the knowledge of the Authority, threatened any litigation against the Authority seeking to restrain or enjoin the issuance or delivery of the Series 2017 Bonds, or questioning or affecting the validity of the Series 2017 Bonds or the proceedings of the Authority under which they are to be issued, or which in any manner questions the right of the Authority to enter into the Indenture or the Financing Agreement or to secure the Series 2017 Bonds in the manner provided in the Indenture or the Act. The City There is not now pending or, to the knowledge of the City, threatened any litigation against the City seeking to restrain or enjoin the issuance or delivery of the Series 2017 Bonds by the Authority, or questioning or affecting the validity of the Series 2017 Bonds or the proceedings of the Authority under which they are to be issued, or which in any manner questions the right of the Authority's right to enter into the Indenture or the Financing Agreement or to secure the Series 2017 Bonds in the manner provided in the Indenture, the Act or the TIF Act or the City's right to enter into the Financing Agreement. -29- LEGAL MATTERS Certain legal matters incident to the authorization and issuance of the Series 2017 Bonds by the Authority are subject to the approval of Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel, whose approving opinion will be delivered with the Series 2017 Bonds. Certain legal matters related to this Official Statement will be passed upon by Gilmore & Bell, P.C., Kansas City, Missouri. Certain legal matters will be passed upon for the Underwriter by its counsel, Lewis Rice LLC. Certain legal matters will be passed upon by the City by Spencer Fane LLP, Special Counsel. Certain legal matters will be passed upon for the Authority by its counsel, Spencer Fane LLP. TAX MATTERS The following is a summary of the material Federal and State of Missouri income tax consequences of holding and disposing of the Series 2017 Bonds. This summary is based upon laws, regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly on a retroactive basis). This summary does not discuss all aspects of Federal income taxation that may be relevant to investors in light of their personal investment circumstances or describe the tax consequences to certain types of owners subject to special treatment under the Federal income tax laws (for example, dealers in securities or other persons who do not hold the Series 2017 Bonds as a capital asset, tax-exempt organizations, individual retirement accounts and other tax deferred accounts, and foreign taxpayers), and, except for the income tax laws of the State of Missouri, does not discuss the consequences to an owner under any state, local or foreign tax laws. The summary does not deal with the tax treatment of persons who purchase the Series 2017 Bonds in the secondary market. Prospective investors are advised to consult their own tax advisors regarding Federal, state, local and other tax considerations of holding and disposing of the Series 2017 Bonds. Opinion of Bond Counsel In the opinion of Gilmore & Bell, P.C., Bond Counsel, under the law existing as of the issue date of the Series 2017 Bonds: Federal and Missouri Tax Exemption. The interest on the Series 2017 Bonds is excludable from gross income for federal income tax purposes and is exempt from income taxation by the State of Missouri. Alternative Minimum Tax Interest on the Series 2017 Bonds is not an item of tax preference for purposes of computing the federal alternative minimum tax imposed on individuals and corporations, but is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. Bank Qualification. The Series 2017 Bonds have not been designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. Bond Counsel's opinions are provided as of the date of the original issue of the Series 2017 Bonds, subject to the condition that the Authority and the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2017 Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The Authority and the City have covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Series 2017 Bonds in gross income for federal and Missouri income tax purposes retroactive to the date of issuance of the Series 2017 Bonds. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Series 2017 Bonds but has reviewed the discussion under the heading "TAX MATTERS." -30- Other Tax Consequences Original Issue Premium. If a Series 2017 Bond is issued at a price that exceeds the stated redemption price at maturity of the Bond, the excess of the purchase price over the stated redemption price at maturity constitutes "premium" on that Bond. Under Section 171 of the Code, the purchaser of that Bond must amortize the premium over the term of the Bond using constant yield principles, based on the purchaser's yield to maturity. As premium is amortized, the owner's basis in the Bond and the amount of tax-exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner. This will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes on sale or disposition of the Bond prior to its maturity. Even though the owner's basis is reduced, no federal income tax deduction is allowed. Prospective investors should consult their own tax advisors concerning the calculation and accrual of bond premium. Sale, Exchange or Retirement of Series 2017 Bonds. Upon the sale, exchange or retirement (including redemption) of a Series 2017 Bond, an owner of the Series 2017 Bond generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Series 2017 Bond (other than in respect of accrued and unpaid interest) and such owner's adjusted tax basis in the Series 2017 Bond. To the extent the Series 2017 Bonds are held as a capital asset, such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the Series 2017 Bond has been held for more than 12 months at the time of sale, exchange or retirement Reporting Requirements In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on Series 2017 Bonds, and to the proceeds paid on the sale of Series 2017 Bonds, other than certain exempt recipients (such as corporations and foreign entities). A backup withholding tax will apply to such payments if the owner fails to provide a taxpayer identification number or certification of foreign or other exempt status or fails to report in full dividend and interest income. The amount of any backup withholding from a payment to an owner will be allowed as a credit against the owner's federal income tax liability. Collateral Federal Income Tax Consequences Prospective purchasers of the Series 2017 Bonds should be aware that ownership of the Series 2017 Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch profits tax, life insurance companies, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Series 2017 Bonds. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Series 2017 Bonds should consult their tax advisors as to the applicability of these tax consequences and other federal income tax consequences of the purchase, ownership and disposition of the Series 2017 Bonds, including the possible application of state, local, foreign and other tax laws. I-MLei S&P Global Rating, a division of S&P Global, Inc. has assigned the Series 2017 Bonds the rating shown on the cover page of this Official Statement. Such rating reflects only the view of Standard & Poor's, and any further explanation of the significance of such rating may be obtained only from the raring agency. The rating does not constitute a recommendation by the rating agency to buy, sell or hold any bonds, including the Series 2017 Bonds. There is no assurance that any rating when assigned to the Series 2017 Bonds will continue for any period of time or that it will not be revised or withdrawn. A revision or withdrawal of the rating when assigned to the Series 2017 Bonds may have an adverse affect on the market price of the Series 2017 Bonds. -31- FINANCIAL STATEMENTS Audited financial statements of the City for the fiscal year ended June 30, 2016 excerpted from the City's Comprehensive Annual Financial Report are included in Appendix B to this Official Statement. These financial statements have been audited by RSM US LLP, independent certified public accountants, to the extent and for the periods indicated in their report which is also included in Appendix B hereto. RSM US LLP has not participated in the preparation of this Official Statement. CONTINUING DISCLOSURE The City will enter into a Continuing Disclosure Agreement with respect to ongoing disclosure which will constitute the written understanding for the benefit of the Owners of the Series 2017 Bonds required by Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (the "Rule"). The Continuing Disclosure Agreement will require the filing of certain operating data and audited financial statements of the City, and the filing of notice of certain listed events, including bond redemptions, defeasances and rating changes, among others. A summary of the Continuing Disclosure Agreement is included in Appendix C. The City has previously engaged in undertakings similar to the Continuing Disclosure Agreement to provide to the national information repositories (presently, only the MSRB) the audited financial statements of the City and updates of certain operating data of the City. In the past five years, the City has not failed to comply in any material respect with any previous continuing disclosure undertakings to provide annual reports or notices of material events pursuant to the Rule except as follows: Since fiscal year 2012, the City has filed its audited financial statements, but, in each year prior to fiscal year 2014, such filings were made more than 180 days after its fiscal year end, without notice of late filing, in contravention of its existing continuing disclosure undertakings. The City failed to timely file certain required operating data for fiscal years 2012 and 2013. The audited financial statements and operating data that were filed were not always cross referenced by CUSIP number to certain outstanding bond issues. The previously omitted operating data updates were filed with the MSRB on May 6, 2014. These materials are available at www.emma.msrb.ora. The Continuing Disclosure Agreement contains procedures for notification of the City which are designed to promote compliance with the City's obligations thereunder with respect to the timeliness and content of annual reports that are to be filed. In 2014, the City entered into a five-year engagement with an outside entity, which entity will assist the City in preparing and submitting the City's annual reports on a timely basis to the MSRB, via EMMA. a t►/:�016i Ell W411 I�iI f.Y�77 Columbia Capital Management, LLC, Overland Park, Kansas, has acted as Financial Advisor to the Authority and the City in connection with the sale of the Series 2017 Bonds. The Financial Advisor is a "municipal advisor" as defined in the Dodd -Frank Wall Street Reform and Consumer Protection Act of 2010. The Financial Advisor has assisted the Authority and the City in the preparation of this Official Statement and in other matters relating to the issuance of the Series 2017 Bonds. The Financial Advisor has not, however, independently verified the factual information contained in this Official Statement. The Financial Advisor will not be a manager or a member of any underwriting group submitting a proposal for the purchase of the Series 2017 Bonds. -32- UNDERWRITING The Series 2017 Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated, St. Louis, Missouri (the "Underwriter"). The Underwriter has agreed to purchase the Series 2017 Bonds pursuant to a Bond Purchase Agreement, dated the date set forth therein, entered into by and among the Authority, the City and the Underwriter (the `Bond Purchase Agreement"). The Bond Purchase Agreement provides that the Underwriter will purchase the Series 2017 Bonds at a purchase price of $19,953,704.35 (representing the principal amount of the Series 2017 Bonds plus original issue premium of $1,767,404.35, minus an Underwriter's discount of $183,700.00). In addition, the Bond Purchase Agreement provides, among other things, that the Underwriter will purchase all of the Series 2017 Bonds, if any are purchased. The Underwriter reserves the right to join with dealers and other underwriters in offering the Series 2017 Bonds to the public. The City has agreed in the Bond Purchase Agreement to indemnify the Underwriter against certain liabilities to the extent allowed by law. The obligations of the Underwriter to accept delivery of the Series 2017 Bonds are subject to various conditions contained in the Bond Purchase Agreement. CERTAIN RELATIONSHIPS Gilmore & Bell, P.C. is serving as Bond Counsel and Disclosure Counsel in connection with the issuance of the Series 2017 Bonds. Gilmore & Bell, P.C. also represents the Underwriter as underwriter's counsel from time to time but has not done so in connection with the Series 2017 Bonds. MISCELLANEOUS The references herein to the Act, the TIF Act, the Indenture, the Financing Agreement and the Continuing Disclosure Agreement are brief outlines of certain provisions thereof and do not purport to be complete. For full and complete statements of the provisions thereof, reference is made to the Act, the TIF Act, the Indenture, the Financing Agreement and the Continuing Disclosure Agreement. Copies of such documents are on file at the offices of the Underwriter and following delivery of the Series 2017 Bonds will be on file at the office of the Trustee. The agreement of the Authority with the Owners of the Series 2017 Bonds is fully set forth in the Indenture, and neither any advertisement of the Series 2017 Bonds nor this Official Statement is to be construed as constituting an agreement with the purchasers of the Series 2017 Bonds. Statements made in this Official Statement involving estimates, projections or matters of opinion, whether or not expressly so stated, are intended merely as such and not as representations of fact. The Cover Page hereof and the Appendices hereto are integral parts of this Official Statement and must be read together with all of the foregoing statements. The execution and delivery of this Official Statement has been duly authorized by the City, and its use has been approved by the Authority. CITY OF RIVERSIDE, MISSOURI By: /s/ Kathleen Rose Mayor -33- (THIS PAGE LEFT BLANK INTENTIONALLY) APPENDIX A INFORMATION CONCERNING THE CITY OF RIVERSIDE, MISSOURI APPENDIX A INFORMATION CONCERNING THE CITY TABLE OF CONTENTS Page THE CITY - GENERAL General......................................................................................................................................................... A-1 FuturePlans.................................................................................................................................................. A-1 Government and Organization.................................................................................................................... A-2 CityOfficials................................................................................................................................................ A-2 DemographicInformation........................................................................................................................... A-2 EconomicInformation................................................................................................................................. A-3 BuildingPermits.......................................................................................................................................... A-4 EmployeeRelations..................................................................................................................................... A-4 Employee Retirement and Pension Plan ..................................................................................................... A-4 CITY DEBT STRUCTURE Authorityto Incur Debt............................................................................................................................... A4 General Obligation Indebtedness................................................................................................................ A-5 Long -Term Indebtedness............................................................................................................................. A-5 OverlappingIndebtedness........................................................................................................................... A-5 Series2006 Levee District Bonds............................................................................................................... A-5 FINANCIAL INFORMATION CONCERNING THE CITY Accounting, Budgeting and Auditing Procedures...................................................................................... A-6 Sourcesof Revenue..................................................................................................................................... A-6 City's Financial Relationship with Argosy Casino..................................................................................... A-6 RetailSales Tax........................................................................................................................................... A-7 Capital Improvement Expenditures............................................................................................................. A-8 PROPERTY TAX TaxRate....................................................................................................................................................... A-8 PropertyValuations..................................................................................................................................... A-8 APPENDIX A INFORMATION CONCERNING THE CITY M:I WSJ1111�I�1\� The following information relating to the City has been furnished by the City for use in this Official Statement. Such information is not guaranteed as to accuracy or completeness by the Underwriter or the Authority and is not to be construed as a representation by the Underwriter or the Authority. Neither the Underwriter nor the Authority has verified this information. No representation is made by the Underwriter or the Authority as to the accuracy of such information or as to the absence of material adverse changes in such information subsequent to the date hereof. General The City of Riverside, Missouri (the "City") is a suburban community located in the southeast corner of Platte County, Missouri. It is approximately seven miles north of downtown Kansas City, Missouri and is considered to be a first ring suburb. Incorporated as a city in 1951, the City, which sits on the banks of the Missouri River, encompasses a land area of approximately six square miles. Although the City has approximately 3,227 residents, its daytime population grows to approximately 10,000 from activity in its growing industrial areas, riverboat casino and school system. Two major events have defined the City's history. In 1994, the Argosy Casino opened in the City. The City has been able to use revenues from the gaming industry to make a variety of capital improvements throughout the City and invest in programs to enhance the quality of life. In 1996, the City leveraged a portion of the gaming revenue to address the impact of flooding on the community by partnering with the Riverside- Quindaro Bend Levee District of Platte County, Missouri (the "Levee District") and the Army Corps of Engineers to construct improvements to the Riverside-Quindaro Bend Levee. The construction and completion of the levee not only helps to protect the City from flooding, but also enabled the development of more than 900 acres of land that was formerly in the flood plain. Future Plans The area protected by the levee project includes in excess of 400 acres of undeveloped land (referred to herein as the "Horizons District.") Development of approximately 30 acres per year in Class A industrial space has been occurring since 2010 and is anticipated to continue until 2020 at a similar pace. At that point, it is anticipated the majority of industrial ground within the Horizons District will be developed. The majority of buildings range in size from approximately 200,000 square feet to almost 500,000 square feet. The current trend is towards larger buildings with cross -dock access. Lease rates range from $4.25 - $4.75 per square foot. On the east side of the park, construction is continuing and a 415,000 square feet building will be completed in 2017 and the City expects a 200,000 square foot building to break ground in 2018. On the west side of the park, the City has completed infrastructure to serve a number of parcels planned for industrial development. Recent projects have included two smaller (14,000 and 30,000 square feet) buildings and a 245,000 square foot building. A-1 Government and Organization The City is a municipal corporation and city of the fourth class, organized and existing under the laws of the State of Missouri, including particularly Chapter 79 of the Revised Statutes of Missouri, as amended. The City was incorporated in 1951. The Board of Aldermen appoints the City Administrator who serves as chief administrative officer responsible for directing the operations of the City in accordance with the policies set forth by the Board of Aldermen. The Board of Aldermen consists of seven members, two elected from each of the City's three wards, plus a mayor who is elected at -large every two years. Three members of the Board of Aldermen are elected every other year for two-year terms. City Officials The current elected officials of the City are: Expiration of Name Position Term of Office Kathleen Rose Mayor 4/18 Al Bowman Alderman 4/19 Art Homer Alderman 4/18 Salvatore LoPorto Alderman 4/19 Chet Pruett Alderman 4/18 Ron Super Alderman 4/18 Aaron Thatcher Alderman 4/19 Greg Mills serves as City Administrator, Donna Oliver serves as Finance Director and Robin Kincaid serves as City Clerk. Demographic Information Municipal Utilities and Services. Water services for the City are provided by Missouri American Water Company. The City has entered into an agreement with the City of Kansas City, Missouri for sanitary sewer service. Electric service is provided to the City by Kansas City Power and Light Company. Natural gas service is provided by Missouri Gas Energy. Transportation Facilities. The City has a strong regional transportation network that serves as an asset to the City's residents and its ability to attract interest from a variety of potential employers and retailers. With proximity to Interstate 635, Interstate 29, Missouri Highway 9, Missouri Highway 69 and Missouri Highway 169, the City's location to transportation facilities is superb. Educational Institutions and Facilities. The City is served by Park Hill School District of Platte County, Missouri, which is accredited by the Missouri Department of Elementary and Secondary Education. The District has 12 elementary schools, 3 middle schools, and 2 high schools, with a total enrollment in excess of 10,921 students. City residents have easy access to the Kansas City metropolitan area's colleges and universities, and numerous technical schools. Medical and Health Facilities. There are a wide variety of doctors, dentists, ophthalmologists and specialists available in Kansas City and the surrounding area. North Kansas City Hospital, a 451 -bed facility with over 550 physicians on staff, and St. Luke's Northland Hospital — Barry Road location, a 95 -bed facility with over 459 physicians on staff, are located within 7 miles of the City. Population. The following table provides the current and historic population figures for the City: Year Population 2016` 3,227 2010 2,937 2000 2,979 1990 3,010 1980 3,206 1970 2,123 *Source: U.S. Census Bureau, American Fact Finder — As of July 1, 2016. Housing. The following table provides the median value of owner -occupied housing units in the City, Platte County and the State of Missouri: City $185,300 Platte County 190,300 State of Missouri 138,400 Source: U.S. Census Bureau, 2011-2015 American Community Survey 5 -year estimates. Income Statistics. The following table sets forth income statistics for the City, Platte County and the State of Missouri: Income Status (in 2014 inflation-adiusted dollars) Per Capita Median Family City $24,192 $39,527 Platte County 35,666 84,309 State of Missouri 22,875 60,809 Source: U.S. Census Bureau, 2011-2015 American Community Survey 5 -year estimates. Economic Information Commerce, Industry and Employment. The City's location in the Kansas City metropolitan area offers its citizens a wide range of employment opportunities. The following table indicates the major employers within the City. All of these employers except Park Hill School District are located within the TIF District. Maior Employers Argosy Casino Adient/Hoover Universal Yanfeng USA Martinrea Riverside U.S. Farathane ABC Employment Holdings Capital Electric Woodbridge Park Hill School District Premium Waters Source: City. Product/Service Employees Entertainment 797 Automotive Supplier 776 Automotive Supplier 456 Automotive Supplier 347 Automotive Supplier 323 Employment Services 277 Electrical Contracting 232 Automotive Supplier 167 Public Education 160 Bottled Water Manufacturer 151 A-3 Labor Statistics Source: Missouri Economic Research and Information Center. *Average, January through August 2017. Building Permits The following table shows the number, type and estimated construction costs of building permits issued by the City during the last three fiscal years for new construction only. 2016 2015 2014 Source: City. Employee Relations Residential Construction No. of Permits Value 43 $11,147,080 27 7,443,180 26 5,275,773 Commercial Construction No. of Permits Value 3 $8,435,630 3 26,521,533 2 14,324,667 The City employs 100 employees. The Fire Department has 16 employees of which 12 are covered by a wage and work agreement between the City and lAFF42. The City considers its relations with its employees to be excellent. Employee Retirement and Pension Plan The City participates in the Missouri Local Government Employees Retirement System (LAGERS) an agent multiple -employer, state wide plan covering substantially all of its employees. The City has a legal obligation to make all required contributions to this plan. For further information see"Note 8 — Other Information, Section B. Retirement Plan —LAGERS" in Appendix B to this Official Statement. CITY DEBT STRUCTURE Authority to Incur Debt Article Vl, Sections 26(b) and (c) of the Constitution of the State of Missouri limit the net outstanding amount of authorized general obligation bonds for a city to 10 percent of the assessed valuation of the city. Article Vl, Section 26(d) provides that a city may, by a two-thirds (four -sevenths at certain elections) vote of the qualified voters, incur indebtedness in an amount not to exceed an additional 10 percent for the purpose of acquiring rights-of-way, construction, extending and improving streets and avenues, and sanitary or storm sewer systems, provided the total general obligation indebtedness of a city does not exceed 20 percent of the assessed valuation. Article Vl, Section 26(e) provides that a city may, by a two-thirds (four -sevenths at certain elections) &X111 2017 2016 2015 2014 2013 2012 Platte County Civilian labor force 56,853 56,662 54,804 54,335 52,590 52,339 Unemployed 2,004 2,049 2,337 2,746 2,977 2,897 Unemployment rate 3.5% 3.6% 4.2% 5.1% 5.7% 5.5% State of Missouri Civilian labor force 3,072,253 3,111,517 3,096,378 3,059,067 3,022,513 3,025,309 Unemployed 128,397 140,815 144,857 186,699 201,751 210,034 Unemployment rate 4.2% 4.5% 5.0% 6.1% 6.7% 6.9% Source: Missouri Economic Research and Information Center. *Average, January through August 2017. Building Permits The following table shows the number, type and estimated construction costs of building permits issued by the City during the last three fiscal years for new construction only. 2016 2015 2014 Source: City. Employee Relations Residential Construction No. of Permits Value 43 $11,147,080 27 7,443,180 26 5,275,773 Commercial Construction No. of Permits Value 3 $8,435,630 3 26,521,533 2 14,324,667 The City employs 100 employees. The Fire Department has 16 employees of which 12 are covered by a wage and work agreement between the City and lAFF42. The City considers its relations with its employees to be excellent. Employee Retirement and Pension Plan The City participates in the Missouri Local Government Employees Retirement System (LAGERS) an agent multiple -employer, state wide plan covering substantially all of its employees. The City has a legal obligation to make all required contributions to this plan. For further information see"Note 8 — Other Information, Section B. Retirement Plan —LAGERS" in Appendix B to this Official Statement. CITY DEBT STRUCTURE Authority to Incur Debt Article Vl, Sections 26(b) and (c) of the Constitution of the State of Missouri limit the net outstanding amount of authorized general obligation bonds for a city to 10 percent of the assessed valuation of the city. Article Vl, Section 26(d) provides that a city may, by a two-thirds (four -sevenths at certain elections) vote of the qualified voters, incur indebtedness in an amount not to exceed an additional 10 percent for the purpose of acquiring rights-of-way, construction, extending and improving streets and avenues, and sanitary or storm sewer systems, provided the total general obligation indebtedness of a city does not exceed 20 percent of the assessed valuation. Article Vl, Section 26(e) provides that a city may, by a two-thirds (four -sevenths at certain elections) &X111 vote of the qualified voters, incur indebtedness in an amount not to exceed an additional 10 percent for the purpose of purchasing or constructing waterworks, electric or other light plants to be owned exclusively by the city, provided the total general obligation indebtedness of a city does not exceed 20 percent of the assessed valuation. The legal debt margin of the City for Fiscal Year 2017 is: Constitutional Debt Limit (20% of assessed valuation) $24,269,948 Indebtedness Outstanding 0 LEGAL DEBT MARGIN $ General Obligation Indebtedness The City has no outstanding general obligation indebtedness. The City has never in its history defaulted on the payment of any of its debt obligations. Long -Term Indebtedness Revenue Bonds. The following table sets forth the outstanding revenue obligations of the City as of October 1, 2017, which includes the Bonds being refunded in connection with this financing: Category of Obligation Tax Increment Revenue Bonds Tax Increment Revenue Bonds Tax Increment Revenue Bonds Tax Increment Revenue Bonds Overlapping Indebtedness Fiscal Year Amount Issued Outstanding 2014 $4,010,000 2011 645,000 2007A 15,295,000 2007B 4,370,000 68,600,922 $24,320,000 The following table sets forth overlapping indebtedness of political subdivisions with boundaries overlapping the City as of June 30, 2017, and the percent attributable (on the basis of assessed valuation) to the City: Taxing Jurisdiction Platte County Park Hill School District Total Source: City. Series 2017 Levee District Bonds Outstanding Percent Net Debt General Obligation Applicable Applicable Indebtedness to city to Ci $39,010,370 4.7% $1,842,340 68,600,922 7.1 4,859,564 $107,611,292 $6,701,904 In 2017, the Riverside-Quindaro Bend Levee District of Platte County, Missouri (the "Levee District") issued its Levee District Improvement Refunding Revenue Bonds (L-385 Project), Series 2017 (the "Levee District Bonds") in the aggregate principal amount of $12,620,000, which are special obligations of the Levee District payable as to both principal and interest out of the proceeds of the levee taxes levied upon the lands situated within the territorial limits of the Levee District adjudicated to be benefited by the Levee Project, including the levee taxes levied on the benefited property owned by the City. The City is currently the largest landowner of benefited property within the Levee District and will be the largest payer of assessments until it sells or otherwise transfers its property. Subject to appropriation for such purpose, the City has also agreed to A-5 replenish deficiencies in the debt service reserve fund for the Levee District Bonds in an amount sufficient to restore the debt service reserve fund to the debt service reserve fund requirement, provided that the total cumulative aggregate amount so contributed by the City shall not $1,400,000. In addition, the City intends to contribute, subject to annual appropriation, certain tax increment revenue financing funds to pay a portion of the debt service on the Levee District Bonds. The City, the Levee District, Platte County, Missouri and UMB Bank, N.A., as trustee, have entered into a Cooperation Agreement setting forth these agreements. FINANCIAL INFORMATION CONCERNING THE CITY Accounting, Budgeting and Auditing Procedures The City begins its budgeting and appropriation process in April of each year for the following fiscal year beginning July 1. The procedure begins with a series of meetings between the City staff members and the Board of Aldermen. The budgets are presented formally by the City Administrator to the Board of Aldermen in May and are incorporated in an appropriation resolution adopted no later than June 30. The accounts of the City are organized on the basis of funds, each of which is considered to be a separate accounting entity. The operation of each fund is accounted for with a separate set of self -balancing accounts that comprise its assets, liabilities, fund equities, revenues and expenditures or expenses. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped by type in the general purpose financial statements. The City's auditor of the Fiscal Year 2016 financial statements was RSM US LLP, Certified Public Accountants, Kansas City, Missouri. Sources of Revenue The City finances its general operations through the following taxes and other miscellaneous sources as indicated below for the 2017 fiscal year (unaudited): Source Percent Taxes 11.79% Intergovernmental 1.47 Charges for services 5.53 Investment earnings 0.36 Real estate income — gaming 19.04 Gaming 28.78 Licenses and fees 0.95 Fines and forfeitures 1.10 Recreation fees 0.31 Miscellaneous 0.49 TIF Revenue 30.19 Source: silty. City's Financial Relationship with Argosy Casino The City and Missouri Gaming Company ("Argosy") entered into a contract dated June 7, 1993, pursuant to which the City leased to Argosy a 2.244 acre tract of land ("Original Lease"). The Original Lease has been amended and supplemented pursuant to eight amendments over the years (the Original Lease, as amended and supplemented, the "Lease"). The land leased to Argosy under the Lease constitutes a small portion of the overall Argosy gaming site. A-6 Pursuant to the terms of the Lease, the Lease is automatically renewed for six successive additional five year terms, unless Argosy provides the City with written notice of termination at least six months prior to such termination. Under the Lease, the consideration for the current term and each renewal term is percentage rent as follows: 3% of first $50,000,000 of Adjusted Gross Receipts 4% of Adjusted Gross Receipts between $50 and $100 Million 1.5% of Adjusted Gross Receipts in excess of $100,000,000 The Lease expires in fiscal year 2020, with five remaining five-year options to extend the term of the Lease. The amount of revenue from the Lease recorded on the statement of revenues, expenditures and changes in fund balance in the General Fund for the fiscal year ended June 30, 2016 is $4,394,870. In addition, the City receives a portion of the gaming tax and admission fees that Argosy is required to collect and remit to the state under Missouri law. The City's receipts for the last five years in connection with Argosy's casino operation in the City from gaming tax, admission fees, and lease revenues are set forth in the table below: June 30 Total City Total Gaming Percentage of City Fiscal Cash Related Receipts Related Year End Receipts City Receipts to Gaming 2017 $23,711,462 $10,947,642 46.17% 2016 22,866,761 10,964,436 47.95% 2015 21,164,122 10,485,419 49.54 2014 20,581,199 10,460,145 50.82 2013 24,179,143 11,288,456 46.69 Source: City. Retail Sales Tax The following table shows the retail sales tax collections for the City for the last five fiscal years: *Unaudited, Source: City. 1% General Fiscal Year Sales Tax 2017 $1,611,237' 2016 1,697,356 2015 1,378,151 2014 1,445,549 2013 1,397,363 A-7 Capital Improvement Expenditures The following table shows the amount spent by the City on capital improvements in the last six fiscal years and the estimated amount the City anticipates spending in the next six fiscal years: Fiscal Year Amount 2022 $1,650,000* 2021 3,660,000 2020 2,775,000 2019 4,115,000 2018 2,050,000 2017 2,630,000` 2016 2,386,294 2015 4,455,505 2014 7,808,465 2013 16,861,669 2012 14,402,799 2011 21,080,414 2010 18,661,494 *Estimated; Source: City. The following table shows the amount the City anticipates spending on capital improvement projects in the next five fiscal years, by category: Fiscal Year Total Horizons -related Non -Horizons Facility/Park Equipment/ Infrastructure Improvements Software 2022 $ 1,650,000* $ 750,000 $ 750,000 $ 150,000 $ - 2021 3,660,000* 2,050,000 1,050,000 150,000 410,000 2020 2,775,000* 750,000 1,050,000 150,000 825,000 2019 4,115,000* 750,000 1,150,000 150,000 2,065,000 2018 2,505,000* 1,400,000 823,000 282,000 - TOTAL $14,705,000 $ 5,700,000 $ 4,823,000 $ 882,000 $ 3,300,000 Estimated; Source: City. PROPERTY TAX Tax Rate The City does not currently levy a property tax. Property Valuations Assessment Procedure. All taxable real and personal property within the City is assessed annually by the County Assessor of Platte County, Missouri. Missouri law requires that personal property be assessed at 33 1/3% of appraised value and the real property be assessed at the following percentages of appraised value: Residential real property 19% Agricultural and horticultural real property 12% Utility, industrial, commercial, railroad and all other real property 32% A-8 A general reassessment of real property occurred statewide in 1985. In order to maintain equalized assessed valuations following this reassessment, the state legislature adopted a maintenance law in 1986. Beginning January 1, 1987, and every odd -numbered year thereafter, the County Assessor must adjust the assessed valuation of all real property located within the county in accordance with a two-year assessment and equalization maintenance plan approved by the State Tax Commission. The County Assessor is responsible for preparing the tax roll each year and for submitting the tax roll to the Board of Equalization. The County Board of Equalization has the authority to adjust and equalize the values of individual properties appearing on the tax rolls. Current Assessed Valuation. The following table shows the total assessed valuation, by category, of all taxable tangible property situated in the City according to the July 28, 2017 (post -board of equalization) assessment: Source: Platte County, Missouri. *Assumes all personal property is assessed at 33 1/3%; because certain subclasses of tangible personal property are assessed at less than 33 1/3%, the estimated actual valuation for personal property would likely be greater than that shown above. History of Property Valuation. The total assessed valuation of all taxable tangible property situated in the City according to the assessments as of December 31 in each of the following years, has been as follows: Year Assessed Valuation 2016 Assessed Assessment Estimated Actual 2014 Valuation Rate Valuation Real Estate: 83,251,909 Residential $30,612,375 19% $161,117,763 Commercial 39,356,279 32 122,988,372 Agricultural 13,088 12 109,067 Railroad & Utility 18,612 32 58,163 Sub -Total $70,000,354 $284,273,364 Personal Property 51,349,390 * 154,063,576 Total $121,349,744 $438,336,941 Source: Platte County, Missouri. *Assumes all personal property is assessed at 33 1/3%; because certain subclasses of tangible personal property are assessed at less than 33 1/3%, the estimated actual valuation for personal property would likely be greater than that shown above. History of Property Valuation. The total assessed valuation of all taxable tangible property situated in the City according to the assessments as of December 31 in each of the following years, has been as follows: Year Assessed Valuation 2016 $121,349,744 2015 91,881,566 2014 87,015,214 2013 86,227,792 2012 83,251,909 Source: Platte County, Missouri. A-9 Assessed Value. According to the records of the City as of October 1, 2017, the following are the largest (in assessed value) landowners within the City and the 2017 assessed value of their land. As described above under "Assessment Procedure, " the requisite assessment rate for each class of property is applied to such property's appraised value in order to determine the assessed value of that property. Source: City. Landowner 2017 Assessed Value Argosy Gaming Co. $34,744,602 Yanfeng 8,043,753 Horizons Industrial V 6,997,440 Perg Riverside LLC 5,862,888 Premium Waters 5,184,000 Horizons Industrial IV 4,803,200 BABRA, LLC 3,633,042 Horizons Industrial III 3,500,800 Horizons Industrial t 3,000,320 Horizons Industrial 11 2,658,240 A-10 APPENDIX B FINANCIAL STATEMENTS OF THE CITY FOR THE YEAR ENDED JUNE 30, 2016 (THIS PAGE LEFT BLANK INTENTIONALLY) 70T r.= Annual i nanci w City of Riverside, Missouri Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2016 Prepared by Finance Department Donna Oliver, Finance Director City of Riverside, Missouri Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2016 Table of Contents Financial Section Independent auditor's report Page Management's discussion and analysis Number Introductory Section Table of contents 1 Letter of transmittal 3 Organizational chart 6 Principal officials 7 GFOA certificate of achievement 8 Financial Section Independent auditor's report 9 Management's discussion and analysis 11 Basic financial statements: Government -wide financial statements Statement of net position 21 Statement of activities 22 Fund financial statements Balance sheet — governmental funds 23 Reconciliation of the governmental fund balances to the net position of governmental activities 24 Statement of revenues, expenditures and changes in fund balance - governmental funds 25 Reconciliation of the statement of revenues, expenditures and changes in fund balances of governmental funds to the statement of activities 26 Statement of revenues, expenditures and changes in fund balances - general fund — budget to actual 27 Statement of assets and liabilities — agency fund 28 Notes to basic financial statements 30 Required supplemental information: Schedules of funding progress other post employment benefit Plan 54 Schedule of changes in net pension liability and related ratios 55 Schedule of contributions 56 Supplementary information: Nonmajor governmental funds: Combining balance sheet 57 Combining statement of revenues, expenditures and changes in fund balance 59 Combining schedule of revenues, expenditures and changes in fund balances, nonmajor special revenue funds, budget to actual 61 Combining schedule of revenues, expenditures and changes in fund balances, capital project funds, budget to actual 62 Schedule of revenues, expenditures and changes in fund balances, tax increment financing debt service fund, budget to actual 64 Statement of changes in assets and liabilities, agency fund 65 Statistical Section (unaudited) Statistical section contents 66 Net position 67 Changes in net position 69 Fund balances, governmental funds 71 Changes in fund balances, governmental funds 73 Tax revenues by source 75 Direct and overlapping sales tax rates 76 Gaming revenue and real estate income 77 Gaming revenue rates 77 Riverside Argosy Casino Kansas City marker share 78 Ratios of outstanding debt 79 Direct and overlapping debt 80 Pledged -revenue coverage 81 Demographic and economic statistics 82 Principal employers 83 Full-time equivalent city government employees by fimction 84 Operating indicators by fimction/program 85 Capital asset statistics by function/program 86 2 December 12, 2016 To the Honorable Mayor, Board of Aldermen and Citizens of the City of Riverside: This document is the Comprehensive Annual Financial Report (CAFR) for the City Riverside for the fiscal year ended June 30, 2016. The CAFR was prepared by the City Finance Division in close cooperation with the external auditor, RSM US LLP. Management assumes full responsibility for the completeness and reliability of t information contained in this report, based upon a comprehensive franiework of intem control that is has established for this purpose. Because the cost of internal control should n exceed the anticipated benefits, the objective is to provide reasonable, rather than absolut assurance that the financial staternents are free of any material misstatements. RSM US LLP, have issued an unmodified ("clean") opinion on the City of Riverside financial statements for the year ended June 30, 2016. The independent auditor's report located at the front of the financial section of this report. Management's discussion and analysis (MD&A) immediately follows the independer auditor's report and provides a narrative introduction, overview and analysis of the bas' financial statements. MD&A complement this letter of transmittal and should be read 1 conjunction with it. Profile of the Government The City of Riverside is a suburban community located in Platte County, Missouri., and with the northern sector of the Kansas City metropolitan area. It currently occupies 5.87 squal iles and serves an estimated population of 3,180. im The City of Riverside was incorporated in 1951 and is governed by a Mayor -Board Aldermen -City Administrator form of government. The Mayor and the 6 Board of Alde e members are elected on an at large basis and serve two- year staggered terms, The Boar Aldermen appoints the City Administrator who serves as the chief administrative officer the City. I a The City of Riverside provides a full range of services including police and fire protection, traffic regulation and municipal court service, construction and maintenance of City streets and bridges, and recreational activities. The financing of infrastructure projects in the L-385 Tax Increment Financing District is provided through two legally separate entities. The Tax Increment Financing Commission and the Riverside Industrial Development Authority, which function, in essence, as departments of the City of Riverside have been included as an integral part of the City of Riverside's financial statements. The Board of Aldermen is required to adopt a final budget by no later than the close of the fiscal year. This annual budget serves as the foundation for the City of Riverside's financial planning and control. The budget is prepared by fund (e.g., General Fund), department (e.g., public safety) and cost center (e.g., police services). Department heads may transfer resources within a department. Transfers between departments, however, need special approval from the Board of Aldermen. Local economy The City of Riverside is located strategically between the Kansas City International Airport and downtown Kansas City. Two interstate highways (1-29 and I-635) and one state highway (9) serve the community. The Kansas City Area Transportation Authority, which operates a metropolitan -wide bus system, provides frequent, low cost service to Riverside. With total governmental fund type revenue of $22.9 million in fiscal 2016, use of which is prudently allocated by the City Council, the City provides many services not available elsewhere, such as one police officer for every 120 residents, refuse collections weekly for residential property at no charge, and a 75% subsidy on all resident community center memberships. Relevant fmancial policies Cash Management Policies and Practices — The City pools idle cash from all funds for the purpose of increasing income through investment activities. Cash, temporarily idle during the year, was invested in certificates of deposit, federal agencies and MOSIP. The maturities of the investments generally range from thirty days to two years, with the average maturity being eighteen months. The City's investment policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, 100% of City deposits were either insured by federal depository insurance or collateralized. All collateral on deposits was held by either the City's agent or a financial institution's trust department in the City's name. Risk Management — The City is provided property, casualty and liability insurance coverage by MOPERM and worker's compensation coverage by Mid -American Regional Council Insurance Trust. Both entities are not-for-profit corporations consisting of governmental entities formed to acquire insurance for its members. The City utilizes all risk control procedures and training made available by these entities. Major initiatives The City of Riverside continues to see significant interest in development projects throughout the community. In support of these projects, the City is moving ahead with infrastructure improvements designed to support the ultimate build -out. These projects both help to attract new growth and better serve our current citizens and businesses. E Awards and Acknowledgements The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Riverside for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2015. This was the tenth year that the government has received this prestigious award. In order to be awarded a Certificate of Achievement, the government had to publish an easily readable and efficiently organized CAFR that satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement's Program's requirements and we are submitting it to the, GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated service of the entire staff of the finance department and the assistance of other departments. We wish to express our appreciation to all members of the departments who assisted and contributed to the preparation of this report. Credit also must be given to the mayor and the board of aldermen for their unfailing support for maintaining the highest standards of professionalism in the management of the City of Riverside's finances. Respectfully submitted, Donna Oliver Finance Director 5 City of Riverside, Missouri Organizational Chart For the Year Ended June 30, 2016 I Citizens ofRiverside I Boards and I Commissions Kathleen Rose, Mayor and Board ofAldermen Greg Mills City Administrator & Public Safetv Director C Mark Ferguson Municipal Court Judge I Tom Wooddell Public Works Director Michael Duffy Community Development Donna Oliver Finance Director Robin Littrell City Clerk Travis Hoover City of Riverside, Missouri Principal Officers June 30, 2016 Elected Officials Mayor Alderman, Ward 3 Alderman, Ward 2 Alderman, Ward 1 Alderman, Ward 3 Alderman, Ward 1 Alderman, Ward 2 Appointed Officials City Administrator/Director of Public Safety City Clerk Finance Director Municipal Court Judge Community Development Director Public Works Director Capital Projects Engineer U Kathleen Rose Frank Biondo Chet Pruett Al Bowman Art Homer Ron Super Aaron Thatcher Greg Mills Robin Littrell Donna Oliver Mark Ferguson Michael Duffy Tom Wooddell Travis Hoover Government Finance Officers Association Certill'"Icate of Achievement r -or Excellence 0 "" * 4 in jr inancial Rented to City of Riverside Missouri For its Comprehensive Annual Financial Report for the Fiscal Year Ended. June 309 2015 *e�oe4. 000.01� Executive Director/CBO E3 Independent Auditoes Report RSM US LLP To the Honorable Mayor and City of Riverside, Missouri Riverside, Missouri Report on the Financial Statements low" W-1 AWO WAIN "-* I o- iI III il basic financial statements as listed in the table of contents. 0 0 financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility presentation of the financial statements. .2udit opinions. Opinions In our opinion, the financial statements referred to above present fai y, in a I matena respe s, e respe ive financial position of the governmental activities, each major fund, and the aggregate remaining fund informatiott 16 and the respective changes in financial positi"ereof and the respective budgetary comparision for the General Fund for the year then ended in accordance With accounting principles generally accepted in the United States of America. THE POWER OF BEING UNDERSTOOD AUDff � 1'AX � CONSULTING E I vz�" t I,mO RSMiV-M;1111"Oo'p'�'x'1T'vzwv,k ofivd(pel,de"I ai,6t ta" aml 'o—un6, IS LLP,1- 'd Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages 11 through 19, the OPEB schedule of funding progress on page 54 and the pension information on pages 55 and 56 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Riverside, Missouri's basic financial statements. The combining and individual nonmajor fund financial statements and other schedules, listed in the table of contents as supplementary information, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole. The accompanying introductory, statistical sections and other schedules, as listed in the table of contents have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Xs,q vs 44P Kansas City, Missouri December 12, 2016 10 CITY OF RIVERSIDE, MISSOURI 2950 N.W. Vivion Road Riverside, MO 64150 Management's Discussion and Anal Our discussion and analysis of the City of Riverside's (the City) financial performance provides an overview of the City's financial activities for the fiscal year ended June 30, 2016. Please read it in conjunction with the City's letter of transmittal and the financial statements that begin on page 21. FINANCIAL HIGHLIGHTS • The City's net position at end of the fiscal year was $100,574,780. Of this amount, ($92,040) is unrestricted net position (deficit) and may be used to meet the government's ongoing obligations to citizens and creditors. • The total net position of the City increased by 6.3% or $5,989,879. Analysis is included in the overview of the financial statements. • As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $17,143,844 an increase of $3,754,578 over the previous year. Approximately $5,953,625 of this amount is available for spending at the government's discretion. • The unassigned fund balance for the General Fund was $5,953,625 compared to $9,277,572 in general fund expenditures. • The City of Riverside total debt (excluding compensated absences) decreased by ($3,870,826) or (12%). OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. 11 Report Components This annual report consists of five parts as follows: Government -wide financial statements: The government -wide financial statements report information about the City as a whole using accounting methods similar to those used by private -sector companies. The statement of net position includes all of the City's assets and liabilities and deferred inflows and outflows. All of the current year's revenues and expenses are reported in the statement of activities regardless of when cash is received or paid. The two government -wide statements report the City's net position and how it has changed. Net position — the difference between the City's assets and deferred outflows of resources and liabilities and deferred inflows of resources -is one way to measure the City's overall financial health or position. Over time, increases or decreases in net position can be monitored to determine whether the City's financial position is improving or deteriorating. The government -wide financial statements report functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from those that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City include general administration, public safety, public works and parks and recreation. The City does not engage in business -type activities. Fund Financial Statements: A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure compliance with finance -related legal requirements. The City utilizes two types of funds: governmental and fiduciary. Governmental Funds: Governmental funds are used to account for essentially the same functions as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, the reader may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. 12 The basic governmental fund financial statements can be found on pages 23-27 of this report. Fiduciary Funds: Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City's own programs. The basic fiduciary fund financial statements can be found on page 28 of this report. Notes to the Financial Statements: The notes to the financial statements are an integral part of the government -wide and fund financial statements and provide expanded explanation and detail regarding the information reported in the statements. The notes to basic financial statements can be found on pages 30-53 of this report. Other Information: The combining statements referred to earlier in connection with nonmajor funds and combining and individual fund statements and schedules can be found on pages 57-61 of this report. Government -Wide Financial Analysis As noted earlier, net position may serve over time as one useful indicator of a government's financial condition. In the case of the City of Riverside, the net position increased by $5,989,879. Following is a condensed version of the government -wide statement of net position comparing fiscal year 2016 and 2015. City of Riverside Net Position Current and other assets Capital assets Total assets Deferred outflows of resources Long-term liabilities outstanding Other liabilities Total liabilities Deferred inflows of resources Net position Net investment in capital assets Restricted Unrestricted Total net position 11c? 2016 $ 18,517,083 118,688,115 137,205,198 2015 (as restated) $ 16,229,396 120,229,106 136,458,502 1,680,657 967,329 34,704,523 908,215 35,612,738 36,947,467 2,117,925 39,065,392 2,698,337 3,775,538 96,108,750 4,558,070 (92,040) $100,574,780 95,152,969 1,369,477 (1,937,545) $ 94,584,901 The total net position of the City increased by $5,989,879. All components of net position increased during the year. Invested in capital assets (e.g., land, buildings, machinery and equipment), restricted as to the purpose which it can be used, and unrestricted increased by $955,781, $3,188,593 and $1,845,505, respectively. City of Riverside Changes in Net Position Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Sales tax Other taxes Grants and contributions not restricted for specific programs Tax increment financing revenue Gaming revenue Real estate income — gaming Investment earnings Gain on land lease Other Total revenues Expenses: Administrative and support Municipal court Public safety Public works Parks and recreation Community dev. & engineering Interest on long-term debt Total expenses Increase in net position 2016 $ 899,930 25,742 847,362 1,697,356 1,030,965 348,521 6,654,901 6,569,566 4,394,870 87,952 1,300,452 141,443 23,999,060 3,552,846 173,961 5,554,772 5,598,064 779,143 684,005 1,666,390 18,009,181 $5,989,879 2015 (as restated) % Change $ 778,891 13,822 46,767 1,378,151 900,804 371,948 5,123,842 6,303,001 4,182,418 89,580 1,094,726 111,632 20,395,582 3,536,140 178,317 5,155,608 5,191,014 745,998 644,951 1,982,428 17,434,456 $2,961,126 16% 86% 1712% 23% 14% (6%) 30% 4% 5% (2%) 19% 27% 18% 0% (5%) 4% 7% 4% 2% (16%) 2% Charges for services increased this year due to a contribution from a private entity for expenses within the Horizons business park and from developer contributed infrastructure. Operating grants and contributions increased due to the receipt of more grants for police services. 14 In fiscal year 2016, capital grants and contributions increased due to funding from a developer for infrastructure within the Horizons Business Park. Sales taxes increased by 23% due to the addition of several businesses, increased sales and an increase in utility rates. Tax increment financing revenues increased by $1,531,059 or 304 i due to the construction M 00 riew buildings and creation of new jobs within the Horizons business park. Gain on land lease increased by 19%. Due to the development within the Horizons busine park, the City entered into multiple sales -type agreements with private businesses which ha resulted in recognition of gains on land leases. I Beginning Year iiiir Curre imp Year Gain Prior Year Gain $102,5 $102527 1,063,002 1,300.452 Due to the reduction of outstanding long term debt, interest on long-term debt decreased by (36)%. M Sources of Funds for Governmental Activities WA E a G n:g -:R:e IiGami�ng- d �MTIF Lea s e � �Rev en u �eO TA �xesg !th e r In a] Admin. Mun. Pub. Safety Pub. Parks& Com. D. Interest on Court or Rec long-term deTat L IN Expenses 11 Program Revenues As noted earlier, the City of Riverside uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds- The focus of the City of Riverside's governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City of Riverside's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. i ilmlrl� 111.114- 11UMUCCS 01,1� I /,110,644, an increasc 77,5N,/jI�,:516 in comparison Min the prior year. Approximately 35% or $5,953,625 constitutes unassigned fund balance, which is available for spending at the government's discretion. The remainder of fund balance is restricted to indicate that it is not available for new spending because it has already been committed to vay debt service ($6,331,575), to construct capital improvements ($3 562,686), to community development ($393,379), for law enforcement ($140,459) and for tourism ($461,546). c ny 01 0 Me current fiscal year, the fund balance of the general ftuid was $5,953,625. As a measure of the general fund's liquidity, it may be useful to compare fund balance to total fund expenditures. Fund balance represents 64% of total general fund expenditures. M The fund balance of the capital improvement fund increased by $3,018,189 due to reduced expenditures within the Horizons business park and increased gaming revenue. The fund balance of the TIF debt service fund increased by $137,922 due to additional TIF revenues that were received but not yet expended. General Fund Budgetary Highlights General Fund Revenues: Overall actual general fund revenues of $7,789,020 were higher than budgeted revenues of $6,938,954 by $850,066 or 12.3%. Some elements of this difference are the following: License and fees were (117.1%) higher than budgeted due to increased construction activity and building permits. Fines and forfeitures were under budget by (28.5%) due to decreased municipal court fines. In August 2015, the Missouri State legislature put into place regulations limiting court fines. i Sales taxes were over budget by 20.0% due to the addition of several businesses, increased sales and an increase in utility rates. Franchise taxes were over budget by 15.0% due to an increase in utility rates. Real estate income from gaming increased 9.9% or $394,870 due to increased revenues at the Argosy Casino. See note 6 for an explanation on how this revenue is calculated. General Fund Expenditures: The legally adopted budget for the General Fund was not amended by the Board of Aldermen during the current fiscal year. In the general government department, the elected officials division actual expenditures were 36.1% under budget as a result of fewer than anticipated meetings. In the public safety department, the public safety administration division actual expenditures were under budget by 19.7% due to lower than expected fuel costs and equipment maintenance. In the public works department, the public works division actual expenditures were under budget by 11.6% due to seasonal employee vacancies and lower than anticipated maintenance expenditures. The building maintenance division actual expenditures were under budget due to reduced custodial costs and lower than anticipated maintenance expenditures. In the parks and recreation department, the parks division was under budget by 34.1% due to lower than anticipated costs for right of way irrigation. The irrigation in Horizons was not completed as was planned during the budget. The community center department was 12.3% over budget due to increased citizen participation in the healthy citizen initiative. 17 Capital Assets The City of Riverside's investment in capital assets as of June 30, 2016, amounts to $118,688,115, (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements, machinery and equipment, park facilities, roads, highways and bridges. City of Riverside Capital Assets, (Net of Depreciation) Land Buildings Improvements Machinery and Equipment Infrastructure Construction in Progress Total 2016 $ 20,316,763 14,403,639 3,566,316 1,182,481 75,355,916 3,863,000 $118,688,115 2015 $ 20,450,715 14,787,596 3,646,401 1,503,987 74,629,148 5,211,259 $120,229,106 Additional information on the City of Riverside's capital assets can be found in Note 3 of this report. Long-term Debt At the end of the current fiscal year, the City of Riverside had $28,395,000 in outstanding tax increment financing debt which is secured by tax increment financing revenues generated. City of Riverside Outstanding Debt 2016 2015 Tax Increment Financing Bonds $28,395,000 $32,170,000 The City of Riverside's total debt decreased by ($3,775,000) or (11.7%) during the current fiscal year. Additional information on the City of Riverside's long-term debt can be found in Note 5 on page 43 of this report. Economic Factors and Next Year's Budgets and Rates • The City of Riverside updated the compensation plan by 2.0 percent for the pay for performance plan. • The unemployment rate for Platte County, which includes the City of Riverside, is currently 4.6% which is a slight decrease from a rate of 4.7% a year ago. In comparison, the state's unemployment rate was 4.5% and the national rate was 4.9%. 18 All of these factors were considered in preparing the City of Riverside's budget for the 2017 fiscal year. Requests and Information This financial report is designed to provide a general overview of the City of Riverside's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report should be addressed to the Finance Director at 2950 N.W. Vivion Road, Riverside, Missouri, 816-741-3993. 19 BASIC FINANCIAL STATEMENTS 20 City of Riverside, Missouri Statement of Net Position Jane 30, 2016 See Accompanying Notes to the Basic Financial Statements. 21 Governmental Activities Assets: Current assets: Cash and investments $ 10,536,763 Taxes receivable 548,782 Due from other governments 504 Interest receivable 24,176 Gaming receivable 600,662 Other receivable 13,570 Total current assets 11,724,457 Noncurrent assets: Restricted cash and investments 6,792,626 Capital assets not being depreciated: Land 20,316,763 Construction in progress 3,863,000 Capital assets being depreciated: Buildings 19,026,865 Land improvements 4,078,591 Equipment 5,908,537 Infrastructure 90,036,959 Accumulated depreciation (24,542,600) Total noncurrent assets 125,480,741 Total assets 137,205,198 Deferred outflows of resources: Deferred amount on refunding 263,885 Pension related amounts 1,416,772 Total deferred outflows of resources 1,680,657 Total assets and deferred outflows of resources $ 138,885,855 Liabilities: Current liabilities: Accounts payable $ 694,916 Accrued wages 211,074 Deposits 2,225 Current portion of long-term obligations - Compensated absences 249,975 Accrued interest 207,447 TIF bonds payable, net 3,635,000 Total current liabilities 5,000,637 Noncurrent liabilities. Noncurrent portion of long-term obligations: Compensated absences 123,122 OPEB liability 132,237 Developer liability 2,227,807 TIF bonds payable, net 25,390,580 Net pension liability 2,738,355 Total noncurrent liabilities 30,612,101 Total liabilities 35,612,738 Deferred Inflows of Resources: Deferred gain from sale - leaseback 2,502,722 Pension related amounts 195,615 Total deferred inflows of resources 2,698,337 Net Position: Net investment in capital assets 96,108,750 Restricted for: Capital improvements 3,562,686 Community development 393,379 Tourism 461,546 Law enforcement 140,459 Unrestricted (92,040) Total net position 100,574,780 Total liabilities, deferred outflows of resources and net position $ 138,885,855 See Accompanying Notes to the Basic Financial Statements. 21 Functions/Programs Primary Government Governmental Activities Administrative and support Municipal court Public safety administration Police services Operations support Fire services Public works Parks and recreation Community development Engineering Interest on long-term debt and related to developer liability Total governmental activities General revenues Taxes Sales tax Franchise tax Tourism tax Gaming revenue tax Grants and contributions not restricted to specific programs Investment earnings Real estate income - gaming Tax increment financing revenue Gain from land lease Miscellaneous Total general revenues Change in net position Net position, beginning of year Net position, end of year City of Riverside, Missouri Statement of Activities For the Year Ended June 30, 2016 See Accompanying Notes to the Basic Financial Statements. 22 1,697,356 813,186 217,779 6,569,566 348,521 87,952 4,394,870 6,654,901 1,300,452 141,443 22,226,026 5,989,879 94,584,901 $ 100,574,780 Program Revenue Charges for Operating Grants Capital Grants Net (Expense) Expenses Services and Contributions and Contributions Revenue $ 3,552,846 $ 47,948 $ - $ - $ (3,504,898) 173,961 - - - (173,961) 441,392 - - - (441,392) 2,766,514 254,540 25,742 - (2,486,232) 614,941 - - - (614,941) 1,731,925 - - - (1,731,925) 5,598,064 400,424 - 847,362 (4,350,278) 779,143 68,643 - - (710,500) 469,177 128,375 - - (340,802) 214,828 - - - (214,828) 1,666,390 - - - (1,666,390) $ 18,009,181 $ 899,930 $ 25,742 $ 847,362 (16,236,147) See Accompanying Notes to the Basic Financial Statements. 22 1,697,356 813,186 217,779 6,569,566 348,521 87,952 4,394,870 6,654,901 1,300,452 141,443 22,226,026 5,989,879 94,584,901 $ 100,574,780 City of Riverside, Missouri Balance Sheet Governmental Funds June 30, 2016 See Accompanying Notes to the Basic Financial Statements. 23 TIF Nonmajor Total General Capital Debt Governmental Governmental Fund Improvements Service Funds Funds Assets Cash and investments $ 5,805,721 $ 3,068,858 $ 377,057 $ 1,285,127 $ 10,536,763 Taxes receivable 526,512 - - 22,270 548,782 Due from other governments - - - 504 504 Interest receivable 14,005 - 10,171 - 24,176 Gaming receivable - 600,662 - - 600,662 Other receivable 13,570 - - - 13,570 Restricted cash and investments - 843,931 5,948,695 - 6,792,626 Due from other funds 504 - - - 504 Total Assets $ 6,360,312 $ 4,513,451 $ 6,335,923 $ 1,307,901 $ 18,517,587 Liabilities Accounts payable $ 193,388 $ 485,741 $ 4,348 $ 11,439 $ 694,916 Accrued wages 211,074 - - - 211,074 Deposits 2,225 - - - 2,225 Advance from developer - 465,024 - - 465,024 Due to other funds - - - 504 504 Total liabilities 406,687 950,765 4,348 11,943 1,373,743 Fund balance Restricted for: Debt service - - 6,331,575 - 6,331,575 Capital improvements - 3,562,686 - - 3,562,686 Community development - - - 393,379 393,379 Law enforcement - - - 140,459 140,459 Tourism - - - 461,546 461,546 Committed for, capital projects - - - 300,574 300,574 Unassigned 5,953,625 - - - 5,953,625 Total fund balance 5,953,625 3,562,686 6,331,575 1,295,958 17,143,844 Total liabilities and fund balance $ 6,360,312 $ 4,513,451 $ 6,335,923 $ 1,307,901 $ 18,517,587 See Accompanying Notes to the Basic Financial Statements. 23 City of Riverside, Missouri Reconciliation of the Governmental Fund Balances To the Net Position of Governmental Activities June 30, 2016 Total governmental fund balances Capital assets used in Government Activities are not current financial resources and, therefore, are not reported as assets in the Government Funds Balance Sheet Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. Long term liabilities at year end consist of the following: Accrued compensated absences $ OPEB liability Deferred gain from sale-leaseback Long-term portion of developer liability Accrued interest on long term debt TIF Bonds payable Net pension liability Deferred charge on refunding Bond premium (discount), net Pension related deferred outflows and inflows of resources are not due and payable in the current year and, therefore, are not reported in the governmental funds as follows: Deferred inflows of resources - pension related amounts Deferred outflows of resources - pension related amounts Net position of governmental activities (373,097) (132,237) (2,502,722) (1,762,783) (207,447) (28,395,000) (2,738,355) 263,885 (630,580) See Accompanying Notes to the Basic Financial Statement. 24 17,143,844 118,688,115 (36,478,336) (195,615) 1,416,772 $ 100,574,780 City of Riverside, Missouri Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds For the Year Ended June 30, 2016 See Accompanying Notes to the Basic Financial Statements. 25 TIF Nonmajor Capital Debt Governmental General Improvements Service . Funds Total Revenues Taxes: Sales and use tax $ 1,697,356 $ - $ - $ - $ 1,697,356 Franchise tax 813,186 - - - 813,186 Tourism tax - - - 217,779 217,779 Gaming revenue tax - 6,569,566 - - 6,569,566 Intergovernmental revenue 348,521 457,772 - 25,742 832,035 Charges for services - 1,860 - - 1,860 Investment earnings 49,110 112 38,730 - 87,952 Real estate income - gaming 4,394,870 - - - 4,394,870 Licenses and fees 176,323 - - - 176,323 Fines and forfeitures 244,208 - - 10,332 254,540 Recreation fees 31,837 - - 36,806 68,643 Miscellaneous 33,609 - - 6,536 40,145 Tax increment financing revenue - - 6,549,491 105,410 6,654,901 Developer contribution - 1,057,605 - - 1,057,605 Total revenues 7,789,020 8,086,915 6,588,221 402,605 22,866,761 Expenditures Current: Administrative and support 1,660,232 - 1,709,799 186,534 3,556,565 Municipal court 170,866 - - - 170,866 Public safety administration 423,449 - - 729 424,178 Police services 2,165,510 - - 167,409 2,332,919 Operations support 588,216 - - - 588,216 Fire services 1,569,163 - - 173 1,569,336 Public works 1,411,597 - - 99,221 1,510,818 Parks and recreation 642,074 - - - 642,074 Community development 447,262 - - 22,414 469,676 Engineering 199,203 - - - 199,203 Capital outlay - 2,768,726 - - 2,768,726 Debt service: Principal - - 3,775,000 - 3,775,000 Interest - - 1,373,481 - 1,373,481 Total expenditures 9,277,572 2,768,726 6,858,280 476,480 19,381,058 Excess (deficiency) of revenue over expenditures (1,488,552) 5,318,189 (270,059) (73,875) 3,485,703 Other financing sources (uses) Proceeds from sale of capital assets - - 268,875 - 268,875 Transfers in 2,300,000 - 139,106 304,631 2,743,737 Transfers out (443,737) (2,300,000) - - (2,743,737) Total other financing sources (uses) 1,856,263 (2,300,000) 407,981 304,631 268,875 Net change in fund balance 367,711 3,018,189 137,922 230,756 3,754,578 Fund balance, beginning of year 5,585,914 544,497 6,193,653 1,065,202 13,389,266 Fund balance, end of year $ 5,953,625 $ 3,562,686 $ 6,331,575 $ 1,295,958 $ 17,143,844 See Accompanying Notes to the Basic Financial Statements. 25 City of Riverside, Missouri Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds To the Statement of Activities For the Year Ended June 30, 2016 Amounts reported for governmental activities in the Statement of Activities are different because: Net change in fund balances - total governmental funds $ 3,754,578 Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay exceeded depreciation in the current period. Capital outlays $ 1,408,465 Proceeds on sale of capital assets (268,875) Gain on disposal of capital assets 134,135 Depreciation expense (2,814,716) (1,540,991) Revenues in the statement of activities that do not provide current financial resources are reported as deferred inflows of resources or are recognized as cash are received in the governmental funds. Lease revenue 1,165,529 The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. Long-term debt interest expense 23,304 Principal payments 3,775,000 Change in developer liability (804,626) Amortization of bond premium and discount 95,826 Amortization of deferred charge on refunding (65,971) 3,023,533 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. Change in compensated absences accrual (93,431) Change in OPEB accrual (19,081) Pension related amount, pension expense (300,258) Change in net position of governmental activities $ 5,989,879 See Accompanying Notes to the Basic Financial Statements. 26 Expenditures: General government: Elected officials See City of Riverside, Missouri 59,098 35,551 Statement of Revenues, Expenditures and Changes in Fund Balances 1,505,737 1,505,737 General Fund 1,032 Human resources 131,000 Budget to Actual 119,976 11,024 Municipal court For the Year Ended June 30, 2016 189,796 170,866 18,930 Budgeted Amounts 1,885,631 1,885,631 1,831,098 54,533 Public safety Variance with Original Final Actual Final Budget Revenues 531,422 423,449 107,973 Licenses and fees $ 95,500 $ 95,500 $ 176,323 $ 80,823 Fines and forfeitures 311,500 311,500 244,208 (67,292) Recreation fees 20,500 20,500 31,837 11,337 Sales taxes 1,444,300 1,444,300 1,697,356 253,056 Franchise taxes 727,200 727,200 813,186 85,986 Intergovernmental revenue 318,460 318,460 348,521 30,061 Investment earnings 15,000 15,000 49,110 34,110 Real estate income - gaming 4,000,000 4,000,000 4,394,870 394,870 Miscellaneous revenue 10,000 10,000 33,609 23,609 Total revenues 6,942,460 6,942,460 7,789,020 846,560 Expenditures: General government: Elected officials See 59,098 59,098 35,551 23,547 Administration 1,505,737 1,505,737 1,504,705 1,032 Human resources 131,000 131,000 119,976 11,024 Municipal court 189,796 189,796 170,866 18,930 Total general government 1,885,631 1,885,631 1,831,098 54,533 Public safety Public safety administration 531,422 531,422 423,449 107,973 Police services 2,286,043 2,286,043 2,165,510 120,533 Operations support 641,997 641,997 588,216 53,781 Fire services 1,638,722 1,638,722 1,569,163 69,559 Total public safety 5,098,184 5,098,184 4,746,338 351,846 Public works Public works 1,266,916 1,266,916 1,129,940 136,976 Building maintenance 334,000 334,000 281,657 52,343 Total public works 1,600,916 1,600,916 1,411,597 189,319 Parks & recreation Parks 460,100 460,100 212,678 247,422 Community center 387,108 387,108 429,396 (42,288) Total parks & recreation 847,208 847,208 642,074 205,134 Community development Community development 482,583 482,583 447,262 35,321 Engineering 217,847 217,847 199,203 18,644 Total community development 700,430 700,430 646,465 53,965 Total expenditures 10,132,369 10,132,369 9,277,572 854,797 Revenues(under)expenditures (3,189,909) (3,189,909) (1,488,552) 1,701,357 Other financing sources (uses) Transfers in 3,000,000 3,000,000 2,300,000 700,000 Transfers out (300,000) (300,000) (443,737) (143,737) Total other financing sources (uses) 2,700,000 2,700,000 1,856,263 556,263 Net change in fund balance $ (489,909) $ (489,909) 367,711 $ 2,257,620 Fund balance, beginning of year 5,585,914 Fund balance, end of year 5,953,-62-5- ,95 , 25 See Accompanying Notes to the Basic Financial Statements 27 City of Riverside, Missouri Statement of Assets and Liabilities Agency Fund June 30, 2016 Assets Cash and investments Liabilities Due to others Municipal Court Bond Account 14,934 $ 14,934 See Accompanying Notes to the Basic Financial Statements. 28 NOTES TO BASIC FINANCIAL STATEMENTS W CITY OF RIVERSIDE, MISSOURI NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2016 Note 1— Reporting Entity, Basis of Presentation, Measurement Focus and Basis of Accounting and Summary of Significant Accounting Policies Reporting Entity The City of Riverside, Missouri (the "City"), was incorporated in 1951. The City operates under a Board of Aldermen -City Administrator form of government. The City's major operations include police and fire protection, parks and recreation, public works and general administrative services. The City's reporting entity consists of the primary government, as well as its blended component units, which are legally separate organizations for which the elected officials of the primary government are financially accountable. Financial accountability is defined as appointment of a voting majority of the component unit's board, and either (a) the ability to impose will by the primary government, or (b) the possibility that the component unit will provide a financial benefit or impose a financial burden on the primary government. The accompanying financial statements present the City (the primary government) and its component units. The financial data of the component units are included in the City's reporting entity because of the significance of their operational or financial relationships with the City. The component units have a June 30, 2016 year-end. Blended component units: The Riverside Industrial Development Authority serves all the citizens of the government and is governed by a 5 -member board which is appointed by the Board of Aldermen. The Authority was established to finance infrastructure projects within blighted areas in the City. The services provided by the Authority are provided exclusively to the City or for the benefit of the City. The Tax Increment Financing Commission serves all the citizens of the government and is governed by a self-perpetuating 11 -member board of which 6 are appointed by the Board of Aldermen. The Commission was established to finance infrastructure projects within blighted areas in the City. The services provided by the Commission are provided exclusively to the City or for the benefit of the City. The Riverside Industrial Development Authority and the Tax Increment Financing Commission are reported within the Tax Increment Financing Debt Service Fund. Basis of Presentation Government -wide and fund financial statements: The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues and other non-exchange revenues. 30 The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and the fiduciary fund, even though the latter is excluded from the government -wide financial statements. Fund accounting: The accounts of the City are organized on the basis of funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self -balancing accounts which comprise its assets, liabilities, fund balance, revenues and expenditures, as appropriate. The City has the following fund types: Governmental Fund Types: Governmental fund types are those funds through which most governmental functions typically are financed. Governmental fund reporting focuses on the sources, uses and balances of current financial resources. Expendable assets are assigned to the various governmental funds according to the purposes for which they may or must be used; current liabilities are assigned to the fund from which they are paid; and the difference between governmental fund assets and liabilities, the fund equity, is referred to as "fund balance." The measurement focus is upon determination of changes in financial position, rather than upon net income determination. The City reports the following major governmental funds: General Fund: The General Fund is the City's primary operating fund. It accounts for all financial resources for the general government, except those required to be accounted for in another fund. Capital Improvements Fund: A Capital Projects Fund, accounts for real estate gaming income and other charges for services that are restricted for capital improvement projects. Tax Increment Financing Debt Service Fund: A Debt Service Fund, accounts for the resources accumulated and payments made for principal and interest on long-term debt. 31 The other governmental funds of the City are considered nonmajor and are as follows: Special Revenue Funds: Account for revenues and expenditures related to programs that are restricted in nature for specific purposes. The nonmajor special revenue funds account for the activities of the DUI Fund, Tourism Tax Fund, Federal & State Grants Fund, Officer Training Fund, Inmate Security Fund, and Fire -Police Athletic League Fund. Capital Projects Fund: Account for resources that are restricted for the construction or acquisition of designated capital assets or specific projects. The nonmajor capital projects funds account for the activities of the Capital Equipment Fund and Community Development Fund. Fiduciary Fund Types: Fiduciary fund types are used to account for assets held by a governmental unit in a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. The City has the following fiduciary fund type: Agency Fund: Accounts for resources received and held by the City as an agent and are to be expended as directed by the party for which the City is acting as an agent. The City's Agency Fund accounts for municipal court bonds held for individuals awaiting court dates, monies collected from fine assessment payable to the City. Measurement Focus and Basis of Accounting The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the fiduciary fund financial statements. Agency funds have no measurement focus. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, pensions and claims and judgments are recorded only when payment is due. Sales taxes, franchise taxes, gaming revenue tax, gaming lease revenue and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are generally recognized as revenue when cash is received by the City because they are generally not measurable until actually received. As a general rule the effect of inter -fund activity has been eliminated from the government - wide financial statements. Internal services provided and used (charges based on actual use) are not eliminated in the process of consolidation. 32 Summary of Significant Accounting Policies 1. Cash and Investments The City maintains a cash and investment pool that is available for use by all funds. Certain resources set aside are classified as restricted assets on the balance sheet because their use is limited by applicable bond requirements. The bond reserve account is used to report resources set aside to subsidize potential deficiencies that could adversely affect debt service payments. The amount available in the Debt Service Fund and the Capital Improvements Fund, capital projects fund is used to report resources accumulated for future debt service payments and construction. Investments in the U.S. Government Agencies are recorded at fair vlue. Investments in certificates of deposit and money market funds are recorded at amortized cost. The City's investment in the external investment pool (MOSIP) is not SEC -registered and is regulated by the State of Missouri. This external investment pool is reported at amortized cost pursuant to the criteria set forth in GASB Statement No. 79. Investment valuation and income recognition: Investments are recorded at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement, not an entity -specific measurement. For some assets and liabilities, observable market transactions or market information might be available; for others, it might not be available. However, the objective of a fair value measurement in both cases is the same—that is, to determine the price at which an orderly transaction to sell the asset or to transfer the liability would take place between the market and participants at the measurement date under current market conditions. Fair value is an exit price at the measurement date from the perspective of a market participant that controls the asset or is obligated for the liability. Purchases and sales of securities are recorded on a trade -date basis. See Note 2 for additional information regarding fair value measures. 2. Restricted Assets Certain funds have been set aside, in accordance with debt agreements, to cover debt payments in the event that the TIF Commission or the Riverside Industrial Development Authority were to default on their obligations on these liabilities. These resources have been shown as restricted. Cash and cash equivalents held in partnership trusts associated with agreements with developers is also shown as restricted in the TIF Debt Service Fund. 33 3. Capital Assets In the government -wide financial statements, capital assets are accounted for as assets in the Statement of Net Position. All capital assets are valued at historical cost or estimated historical cost if actual is unavailable, except for donated capital assets, which are recorded at acquisition value at the date of donation. Depreciation of all exhaustible capital assets is recorded as an expense in the Statement of Activities, with accumulated depreciation reflected in the Statement of Net Position. Depreciation is provided over the assets' estimated useful lives using the straight-line method of depreciation. The City utilizes a capitalization threshold of $10,000 for purposes of reporting capital assets. The range of estimated useful lives by type of asset is as follows: Buildings 10-50 years Improvements Other than Buildings 10-25 years Machinery, Furniture and Equipment 5-20 years Infrastructure 50 years 4. Deferred Ou flows of Resources Deferred outflows of resources: In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has two items that qualify for reporting in this category. They are the deferred charge on refunding and deferred pension related amounts reported in the government -wide statement of net position. A deferred charge on refunding results from the difference in the carrying value of the refunded debt and its requisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The pension related deferred outflow consists of the unamortized portion of the net difference between projected and actual experience on plan assumptions and plan investments and change in assumptions. 5. Deferred Inflows of Resources In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has two items that qualify for reporting in this category. They are the deferred gain from sale- leaseback transactions and deferred pension related amounts reported in the government -wide statement of net position. A deferred gain from a sale-leaseback transaction results from the difference between the acquisition cost of property and the amount paid by the lessee. The amount is deferred and amortized over the term of the lease. See Note 8E for information pertaining to the deferred gain from sale-leaseback reported on the City's statement of net position. The pension related deferred inflow consists of the unamortized portion of the difference between projected and actual experience on plan assumptions. 34 6. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave since the City does not have a policy to pay any amounts when employees separate from service with the City. All vacation pay is accrued when incurred in the government -wide statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. 7. Intenfund Transactions Interfund transactions are defined as transactions among City funds that would be treated as revenues and expenditures if they involved organizations external to City government and are accounted for as revenues and expenditures in the funds involved. Interfund services provided and used are not eliminated in the process of consolidation. Transactions which constitute reimbursements to a fund for expenditures initially made from it which are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the reimbursed fund. Transactions, which constitute the transfer of resources from a fund receiving revenues to a fund through which the revenues are to be expended, are separately reported in the respective funds' operating statements. Activity between funds that are representative of lending/borrowing arrangements at the end of the fiscal year are referred to as "due to/from other funds." 8. Long -Tenn Obligations In the government -wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts are deferred and amortized over the life of the debt using a method which approximates the effective interest method. Bond issuance costs are expensed as incurred. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuance are reported as other financing sources while discounts on debt issuance are reported as other financing uses. Bond issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 9. Pensions For the purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Missouri Local Government Employees Retirement System (LAGERS) and additions to/deductions from LAGERS fiduciary net position have been determined on the same basis as they are reported by LAGERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 35 10. Advance From Developer The City and a developer contributed cash to a partnership escrow account which is recorded as restricted cash and cash equivalents in the Capital Improvements Fund. The escrow account is used to fund City projects that will be sold to the developer upon completion. The advance from developer liability represents the unspent portion of funds contributed by the developer. As cash payments are made from escrow the City's portion of the expenditures is recorded as capital outlay and the developer's portion of the payment is recognized as developer contributions revenue in the statement of revenues, expenditures and changes in fund balance as all revenue recognition criteria have been met. 11. Developer Liability The City is currently constructing office buildings in connection with developer agreements. The agreements require the developer to provide an advance of cash for the project and upon sale of the property the advance will be returned to the developer with an additional 15% return on investment. The advance and an estimate of the return on investment is recorded as a developer liability on the statement of net position, in addition to the contributed escrow accounts already reported in the Capital Improvements Fund. 12. Fund Balance GASB Statement No. 54, Fund Balance Reporting and Government Fund Type Definition establishes criteria for reclassifying fund balances into specifically defined classifications and clarifies definitions for governmental fund types. In the governmental fund financial statements, fund balances are classified as follows: Nonspendable: Amounts which cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact. Restricted: Amounts restricted to specific purposes when constraints placed on the use of the resources are either externally imposed by creditors, grantors or state or federal laws or imposed by law through constitutional provisions or enabling legislation. Committed: Amounts which can be used only for specific purposes pursuant to constraints formally imposed by the Board of Alderman through ordinance approved prior to year-end. Those committed amounts cannot be used for any other purpose unless the Board of Alderman removes or changes the specified use by taking the same action it employed to commit those amounts. Assigned: Amounts constrained by the City's intent to use them for a specific purpose. The City's fund balance policy delegated the authority to assign fund balance to the City Manager and Finance Director. Unassigned: All amounts not included in other spendable classifications. The General Fund is the only fund that would report a positive amount in unassigned fund balance. When an expenditure is incurred in governmental funds which can be paid using either restricted or unrestricted resources, the City policy is to pay the expenditure from restricted fund balance and then from less -restrictive classifications — committed, assigned and then unassigned fund balances. 36 13. Net Position Net position represents the difference between assets and deferred outflows and liabilities and deferred inflows of resources. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on its use through enabling legislation or through external restrictions imposed by creditors, grantors or laws and regulations of other governments. Net position restricted through enabling legislation consist of $3,562,686 for capital improvements, $140,459 for law enforcement, $393,379 for community development which represents downtown neighborhood improvements and $461,546 for tourism. The City first applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position is available. 14. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States used by the City requires management to make estimates and assumptions that affect certain reported amounts in the financial statements and disclosures; accordingly, actual results could differ from those estimates. 15. Budgetary Information The Board of Aldermen annually adopts budgets for the following funds: General Fund Tourism Tax Fund — Nonmajor Special Revenue Fund Capital Improvements Fund — Major Capital Projects Fund Community Development Fund — Nonmajor Capital Projects Fund Capital Equipment Fund—Nonmajor Capital Projects Fund Tax Increment Financing Debt Service Fund The City does not adopt a budget for the DUI Fund, Federal & State Grants Fund, Officer Training Fund, the Inmate Security Fund and the Fire -Police Athletic League Fund. All appropriations are legally controlled at the fund level for the individual funds. On June 2, 2015, the Board of Aldermen formally approved the original adopted budget for fiscal year 2016. The City follows these procedures in establishing the budgetary data reflected in the financial statements: The City Administrator submits to the Board of Aldermen a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed operating expenditures, capital expenditures and the means for financing them. • Public hearings are conducted to obtain comments from all interested parties. 37 The budget for the coming year is formally adopted on or before the last day of the current fiscal year. • The City Administrator is authorized to make changes within departments, between departments and between functions within each fund. Changes or transfers at the fund level require approval by the Board of Aldermen. • Under Missouri law, expenditures may not legally exceed budgeted appropriations at the fund level. If expenditures for a fund exceed the budget, either the budget must be amended or the Board of Aldermen must pass a resolution authorizing the expenditures in excess of the budget. The budget was not amended during the fiscal year. The budgets are integrated into the accounting system, and the budgetary data, as presented in the financial statements for all funds with annual budgets, compare the expenditures with the amended budgets. All budgets are presented in the same format as the actual statements. Note 2 — Deposits and Investments Fair value measurements: During the fiscal year ending June 30, 2016, the City adopted GASB Statement No. 72, Fair Value Measurement and Application, which provides guidance for determining a fair value measurement for financial reporting purposes. The City categorizes its assets and liabilities measured at fair value within the hierarchy established by generally accepted accounting principles. Assets and liabilities valued at fair value are categorized based on inputs to valuation techniques as follows: Level I input: Quoted prices for identical assets or liabilities in an active market that an entity has the ability to access. Level 2 input: Inputs --other than quoted prices included within Level 1 -that are observable for an asset or liability, either directly or indirectly. Level 3 input: Inputs that are unobservable for the asset or liability which are typically based upon the Plan's own assumptions as there is little, if any, related market activity. Hierarchy: The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. Inputs: If the fair value of an asset or a liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement. 38 As of June 30, 2016, the City had the following investments: Investments at Fair Value U.S. Government Sponsored Enterprise Notes Investments at Amortized Cost Ameritrade Money Market Fund Local government investment pool-MOSIP Certificate of Deposits Federated Money Market Fund Total Fair Value Weighted Average Fair Value Maturity Hierarchy Fair Value Years Level $9,700,854 2.99 2 7,268 n/a 641 n/a 2,900,000 0.75 2,842,600 n/a $15,451,363 Interest Rate Risk. In accordance with its investment policy, the City manages its exposure to declines in fair values by limiting the final maturity date of all operating investments to 5 years or less from the date of purchase. Investments for bond proceeds and debt service reserve accounts may be extended to match the anticipated cash flow needs. Credit Risk/Concentration of Credit Risk. Missouri state statutes authorize the City, with certain restrictions, to investments which are: a. Obligations of the United States government, the State of Missouri, this city, or; b. In bonds, bills, notes, debentures or other obligations guaranteed as to payment of principal and interest by the government of the United States or any agency or instrumentality thereof, the State of Missouri or this city, or; c. In revenue bonds of the City, or; d. In certificates of deposit, savings accounts as defined in Chapter 369, Revised Missouri Statutes or in interest bearing time deposits when such funds are held in United States banks, state banks, savings and loan associations operating under Chapter 369, Revised Missouri Statutes, or savings and loan associations authorized by the United States government so long as such deposits, savings accounts, and interest bearing deposits are secured by one or more of the types of securities described in subparagraphs (a), (b), or (c) of this section. e. Banker's acceptances issued by domestic commercial banks possessing the highest rating issued by a nationally recognized rating agency, or; f. Commercial paper issued by domestic corporations which has received the highest rating issued by a nationally recognized rating agency. g. Investments permitted by the Board of Aldermen which are authorized in the model investment policy prepared by the State of Missouri for political subdivisions. 39 Generally, credit risk is the risk that the issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City's investment policy limits the percentage of the portfolio that can be in various investment classes. The investment classes and their respective limits are shown below. Investment Class Limit Bankers Acceptances 10% Collateralized Certificate of Deposit 100% U.S. Treasuries 100% U.S. Agencies 80% Collateralized Repurchase Agreements 50% The table below illustrates the City's exposure to credit risk and concentration of credit risk: Investment Tvae Federal Home Loan Bank Federal Home Loan Mortgage Corporation Federal National Mortgage Association Federal Farm Credit Bank Federated Treasury Obligation Fund Money Market Certificates of Deposit Missouri Securities Investment Program Money Market Percent of Standard & Poor's Total Credit Ratina Investments AA+ 9.7% AA+ 15.7% AA+ 32.5% AA+ 4.9% AAA N/A N/A 18.8% AAA N/A Investments in the Missouri Securities Investment Program and the Federated Treasury Obligation Fund are not subject to concentration of credit risk. Custodial Credit Risk The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the City will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the City will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. The City's policy is to collateralize the demand deposits and repurchase agreements with securities held by the financial institution's agent and in the City's name. At June 30, 2016, the City's deposits were insured by Federal depository insurance and uninsured deposits were fully collateralized by securities held in the City's name by their financial institution's agent. The City's securities were registered and held by the City's financial institution in the City's name. As of June 30, 2016, the City's bank balance of deposits with financial institutions of $1,923,041 and the City's investments were not exposed to custodial credit risk. aml Note 3 — Capital Assets The following is a summary of changes in capital assets for the year ended June 30, 2016: Capital assets not being depreciated: Land Construction in progress Total capital assets not being depreciated Capital assets being depreciated: Buildings Improvements Machinery and equipment Infrastructure Total capital assets being depreciated Less accumulated depreciation for: Buildings Improvements Machinery and equipment Infrastructure Total accumulated depreciation 2015 2016 Additions Deletions Balance $20,450,715 $ - $(133,952) $20,316,763 5,211,259 1,179,248 (2,527,507) 3,863,000 25.661.974 1.179.24R 19,026,865 - 4,078,591 - 5,816,473 229,217 87,509,452 2,527,507 (2,661,459) 24,179,763 19,026,865 4,078,591 (137,153) 5,908,537 90,036,959 116,431,381 2,756,724 (137,153) 119,050,952 (4,239,270) (383,956) - (4,623,226) (432,190) (80,085) - (512,275) (4,312,485) (549,936) 136,365 (4,726,056) (12,880,304) (1,800,739) - (14,681,043) (21,864,249) (2,814,716) 136,365 (24,542,600) Total capital assets, being depreciated, net 94,567,132 (57,992) (788) 94,508,352 Governmental activities capital assets, net $120,229,106 $1,121,256 $(2,662,247) $118,688,115 Depreciation expense was charged to functions/programs of the City as follows: Administrative and support $49,852 Police Services 379,308 Fire Services 72,844 Public Works 2,177,041 Parks and Recreation 132,746 Community Development 2,925 Total Depreciation Expense 2 814 716 41 Construction Commitments A summary of the City's commitments on uncompleted construction contracts and developer agreements and the amount, which is expected to be funded by the City as follows: Capital Improvements Fund Horizons Phase I Construction 41' & Helena Total Note 4 — Interfund Balances and Transfers Contract To Be Amount Completed Completed $10,698,691 $9,950,375 $748,316 864,500 842,887 21,613 $11,563,191 $10,793,262 $769,929 Interfund balances at June 30, 2016 consisted of: General fund Nonmaj or governmental funds Total Due From Due To $504 $ - - 504 $504 Transfers for the year ended June 30, 2016 consisted of: Transfers In General fund $ 2,300,000 Capital improvements fund - TIF debt service fund 139,106 Nonmajor governmental funds 304,631 Total $2,743,737 $504 Transfers Out $ 443,737 2,300,000 $2,743,737 Transfers are used to move unrestricted revenues in the general fund and gaming revenues in the Capital Improvements Fund to finance various programs that the City must account for in other funds in accordance with budgetary authorizations, including for debt service subsidies or matching funds for various grant programs and to fund capital expenditures. 11Y) Note 5 — Long -Term Debt Long-term liability balances and activity for the year ended June 30, 2016 were as follows: Compensated absences, net pension liability and OPEB liability are usually liquidated by the General Fund. Tax increment financing bonds payable as of June 30, 2016 is comprised of the following individual issues: Fiscal Year Outstanding Balance Issued Maturity Date Interest Rates June 30, 2016 Series 2007A Tax Increment Financing Debt $30,265,000 Balance Series 2007B Tax Balance Amounts Due Debt $10,000,000 June 30, Series 2011 Tax June 30, Within One Debt $2,385,000 2015 Additions Retirements 2016 Year Tax Increment 2014 Total Financing Bonds $32,170,000 $ - $3,775,000 $28,395,000 $3,635,000 Premium 726,406 - 95,826 630,580 - (discount) on bonds, net Net pension 1,747,126 991,229 - 2,738,355 - liability OPEB Liability 113,156 20,081 1,000 132,237 - Compensated absences 279,666 373,097 279,666 373,097 249,975 Total $35,036,354 $1,384,407 $4,151,492 $32,269,269 $3,884,975 Compensated absences, net pension liability and OPEB liability are usually liquidated by the General Fund. Tax increment financing bonds payable as of June 30, 2016 is comprised of the following individual issues: Fiscal Year Outstanding Balance Issued Maturity Date Interest Rates June 30, 2016 Series 2007A Tax Increment Financing Debt $30,265,000 2007 Series 2007B Tax Increment Financing Debt $10,000,000 2007 Series 2011 Tax Increment Financing Debt $2,385,000 2011 Series 2014 Tax Increment Financing Debt $7,640,000 2014 Total 5/1/08 — 5/1/26 4.5% to 5.0% 5/1/14 — 5/1/26 5/1/12-5/1/20 4.5% 2.0% to 4.0% $16,750,000 5,415,000 850,000 5/1/15 — 5/1/20 5.0% to 5.25% 5,380,000 $28,395,000 43 Annual debt service requirements to maturity for tax increment financing bonds are as follows: Fiscal Year Principal Interest 2017 $3,635,000 $1,244,681 2018 3,780,000 1,111,156 2019 3,925,000 970,319 2020 3,735,000 809,168 2021 2,335,000 639,738 2022-2026 10,985,000 1,433,023 Total $28,395,000 $ 6,208,085 The Series 2007 A and B Tax Increment Financing Bonds are collateralized by land owned by the City of Riverside. During 2007, the Riverside Industrial Development Authority, a blended component unit of the City, issued $40,265,000 of Tax Increment Financing Revenue Bonds to finance construction of infrastructure within the Horizons Business Park. These bonds are payable solely from property tax increment received with respect to the financial projects and are collateralized by land owned by the City. Incremental property taxes were projected to produce $64,706,572 or 100% of the debt service requirements over the life of the bonds. These bonds are not direct obligations of the City. Total principal and interest remaining on the bonds is $27,895,185 payable through 2026. For the current year, principal and interest paid and total incremental tax revenues were $3,623,513 and $4,064,293, respectively. During 2011, the Tax Increment Financing Commission, a blended component unit of the City, issued $2,385,000 of Tax Increment Financing Revenue Bonds for a current refunding of the City's Series 1998, 1999 and 2002 Tax Increment Financing Revenue Bonds. Total principal and interest remaining on the bonds is $926,050 payable through 2020. During 2014, the Riverside Industrial Development Authority, a blended component unit of the City, issued $7,640,000 of Tax Increment Financing Revenue Bonds for an advance refunding of the City's Series 2004 Tax Increment Financing Revenue Bonds. Total principal and interest remaining on the bonds is $5,781,850 payable through 2020. Conduit Debt Obligations The City has issued Missouri recovery facility revenue bonds to provide financial assistance to a private business for economic development purposes. The bonds are secured by properties financed as well as letters of credit and are payable solely from payments received from the private businesses involved. Ownership of the acquired facilities is in the name of the private business served by the bond issuance. Neither the City nor any political subdivision thereof is obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying basic financial statements. As of June 30, 2016, there was one issue of Missouri recovery zone facility revenue bonds outstanding with an aggregate original issue amount of $20,000,000, and a principal balance outstanding of $11,250,000. MM Note 6 — Real Estate Income — Gaming The City has an agreement with Penn Gaming to operate a riverboat casino on land owned by the City. Under the agreement, Penn Gaming agreed to pay the City a percentage of the casino's adjusted gross receipts. Adjusted Gross Receipts % Payable to City $0 to $50,000,000 3% $50,000,0000 to $100,000,000 4% Over $100,000,000 1 '/2% The agreement expires in fiscal year 2020, with five remaining five-year options to extend the terms of the lease. The amount of revenue recorded on the statement of revenues, expenditures and changes in fund balance in the General Fund for the fiscal year ended June 30, 2016 is $4,394,870. Note 7 — Other Post Employment Benefits Plan Description: The City provides for retiree Medical and Dental coverage to qualifying former employees through Midwest Public Risk (MPR), a public -entity risk pool. MPR functions as an agent multiple -employer plan. To be eligible, employees must be full-time with at least ten years of service with an MPR employer. Retirees and their spouses may obtain coverage until Medicare eligibility by paying required premium rates. Upon retiree death or attainment of age 65 spouses may continue coverage for up to three years not to exceed to their own age 65. The City maintains a trust arrangement with MPR to collect premiums and pay claims/administrative costs. This trust arrangement does not qualify as an "OPEB Plan" and is not treated as holding assets in order to offset OPEB liabilities. However, GASB does require the "Plan" to determine the valuation interest rate (or discount rate) based on expected return of the MPR Health & Dental Fund since it is used to pay retiree claims. The plan is not accounted for as a trust fund since an irrevocable trust has not been established. There is no stand alone financial report for the plan. Funding_ policy: The City does not pay retiree benefits directly; they are paid implicitly over time through employer subsidization of active premiums that would be lower if retirees were not part of the experience group. Retirees who elect to continue coverage in the medical and dental plans offered through MPR are required to pay a contribution until the employee becomes eligible for Medicare. Since the retirees pay the premiums each year, the City's share of any premium cost is determined on the basis of a blended rate or implicit rate subsidy calculation. The plan is financed on a pay-as-you-go basis. The benefits and benefit levels are governed by City policy and the MPR trust agreement. As of June 30, 2016, there was 1 City retiree participating in the plan. 45 Annual OPEB Cost and Net OPEB Obli ag tion: The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance to the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years. The following table shows the components of the City's annual OPEB cost for the year, the amount actuarially contributed to the plan and changes in the City's annual OPEB obligation: Annual required contribution $21,637 Interest on net OPEB obligation 5,092 Adjustment to annual required contribution (6,648) Annual OPEB cost (expense) 20,081 Contributions and payments made (1,000) Increase in net OPEB obligation 19,081 Net OPEB obligation — July 1, 2015 113,156 Net OPEB obligation —June 30, 2016 $132,237 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligations follows: Fiscal Year Ending Annual OPEB Cost Annual OPEB Cost Contributed Net OPEB Obligation June 30, 2014 21,916 0.0% 90,206 June 30, 2015 22,950 0.0% 113,156 June 30, 2016 20,081 5.0% 132,237 Funded status and funding_ progress: As of July 1, 2015, the most recent actuarial valuation date, the plan was 0 percent funded. The actuarial accrued liability for benefits was $115,281 and the actuarial value of assets is none, resulting in an unfunded actuarial accrued liability (UAAL) of $115,281. The covered payroll (annual payroll of active employees covered by the plan) was $3,736,067 and the ratio of the UAAL to the covered payroll was 3.1 percent. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the health care cost trend. Amounts determined regarding the funded status of the plan and annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Actuarial methods and assumptions: Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and included in the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the July 1, 2015 actuarial valuation, projected unit credit actuarial cost method was used. The actuarial assumptions included a 4.5 percent investment rate of return (net of administrative expenses), projected medical cost trend rate of 7.0 percent initially, grading down to 5 percent over 6 years. The City's unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open group. The remaining amortization period at July 1, 2015, was 30 years. Note 8 — Other Information A. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. To protect itself against these risks of loss, the City is a member of Midwest Public Risk (MPR) and MOPERM, not-for-profit corporations consisting of governmental entities formed to acquire insurance for its members. MPR and MOPERM operate as a purchasing pool and are not joint venture activities of the City. The City has no control over budgeting, financing, management selection, or the governing bodies. MPR and MOPERM provide both conventional and self-insurance coverage for their members, including medical, dental, property, casualty, general liability, and workers' compensation. The City participates in property casualty, general liability and workers' compensation insurance coverage. MPR and MOPERM manage the cash and investment pool, funded by insurance premiums, on behalf of its members. MPR's and MOPERM's investment pools consist of interest- bearing deposits, U.S. Treasury strips, U.S. Governmental agency obligations, and collateralized mortgage obligations. In the event that a deficit occurs with respect to any fiscal year of MPR or MOPERM for which the City was a participant at any time during such year, and in the event that MARCIT or MOPERM determines that an assessment is required in order to provide additional funds for the obligations of the insurance company for such year, and further, in the event that the City was covered by the types of benefits requiring the assessment during the time period in which the assessment arose, the City is obligated to pay its pro rata share of any such assessment whether or not the City is a member of MPR or MOPERM at the time of such assessment. Management of the City is not aware of any deficit situation in either risk pool that would require an accrual of a liability as of June 30, 2016. There has been no significant change in insurance coverage from the previous fiscal year. Settled claims have not exceeded insurance coverage in any of the past three years. 47 a. Torts, errors and omissions Purchased commercial insurance health and life b. Workers Compensation: Purchased commercial insurance Employee injuries c. Physical property loss and Purchased commercial insurance natural disasters sm Ow - e T managemnt =eves suen covTr-a—ge is su I Tent to pr cl-u-de any significant unins to the City. Settled claims have not exceeded this insurance coverage in any of the past three fiscal years. B. Retirement Plan – LAGE Plan Description: I The City's defined benefit pension plan provides certain retirement, disability and death benefits to plan members and beneficiaries. The City participates in the Missouri Local Government Employees Retirement System (LAGERS). LAGERS is an agent multiple- eniployer, statewide public employee pension plan established in 1967 and administered in accordance with RSMo. 70.600-70,755. As such, it is LAGERS responsibility to administer the law in accordance with the expressed intent of the General Assembly. The plan is qualified under the Internal Revenue Code Section 401(a) and is tax exempt. The responsibility for the operations and administration of LAGERS is vested in the LAGERS Board of Trustees consisting of seven persons. LAGERS issues a publicly available financial report that includes financial statements and required supplementary information. This report may be obtained by accessing the LAGERS website at w Benefits provided: LAGERS provides retirement, death and disability benefits. Benefit provisions are adopted by the governing body of the eniployer, within the options available in the state statutes governing LAGERS. All benefits vest after 5 years of credited service, Employees who retire on or after age 60 (55 for police and fire) with 5 or more years of service are entitled to an allowance for life based upon the benefit program information provided below. Employees may retire with an early retirement benefit with a minimum of 5 years of credited service and after attaining age 55 (50 for police and fire) and receive a reduced allowance. City of Riverside Valuation Benefit Multiplier: 2.0% Final Average Salary 5 Years Member Contributions 0% Benefit terms provide for annual post retirement adjustments to each member's retirement allowance subsequent to the member's retirement date. The annual adjustinent is based on the increase in the Consumer Price Index and is hinited to 4% each year. En., Employees covered by benefit terms: At June 30, 2016, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 29 Inactive employees entitled to but not yet receiving benefits 26 Active employees 75 Total 130 Contributions: The employer is required to contribute amounts at least equal to the actuarially determined rate, as established by LAGERS. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amoun to finance an unfunded accrued liability. Employees of the City do not contribute to the pension plan. The City's employer contribution rates are 15.9% (General), 22.2% (Police), and 14.5% (Fire) of annual covered payroll. Net Pension Liability: The City's net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of February 29, 2016 and rolled forward to the measurement date using standard update procedures. Actuarial assumptions: The total pension liability in the February 28, 2016 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 3.25% wage inflation; 2.50% price inflation Salary Increase 3.25% to 6.55% including wage inflation Investment rate of return 7.25%, net of investment and administration expenses Mortality rates were based on RP -2014 Healthy Annuitant Mortality table for males and females for healthy retirees, the RP -2014 Disabled Mortality table for males and females for disabled retirees and the RP -2014 Employees Mortality table for males and females for preretirement employees. The tables were set back 10 years and adjusted for the MP -2015 improvement scale. The actuarial assumptions used in the February 29, 2016 valuation were based upon experience observed during the most recent 5 -year period study for the period March 1, 2010 through February 28, 2015. The long-term expected rate of return on pension plan investments was determined using a model method in which the best -estimate ranges of expected future real rates of return (expected returns, net of investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: K UO Asset Class Equity Fixed Income Real Assets Strategic Assets Target Allocation 43.00% 26.00% 21.00% 10.00% Long -Term Expected Real Rate of Return 5.00% 3.00% 3.25% 5.60% Discount rate: The discount rate used to measure the total pension liability is 7.25%. The projection of cash flows used to determine the discount rate assumes that employer and employee contributions will be made at the rates agreed upon for employees and the actuarially determined rates for employers. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to pay all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payment to determine the total pension liability. Balances at 6/30/2015 Changes for the year: Service Cost Interest Difference between expected & actual experience Change in assumptions Contributions — employer Net investment income Benefit payments, including refunds Administrative expense Other changes Net changes Balances at 6/30/16 Increase (Decrease Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) — (b) $ 10,852,609 $9,105,483 $1,747,126 480,583 795,380 (51,982) 393,633 (240,061) 1,377,603 $12,230,212 700,760 10,866 (240,061) (9,845) (75,346) 386,374 $9,491,857 480,583 795,380 (51,932) 393,633 (700,760) (10, 866) 9,845 75,346 991,229 $2,738,355 Sensitivity of the net pension liability to changes in the discount rate: The following presents the Net Pension Liability of the City, calculated using the discount rate of 7.25%, as well as what the City's Net Pension Liability would be using a discount rate that is 1 percentage point lower (6.25%) or one percentage point higher (8.25%) than the current rate. I% Decrease 6.25% $4,969,916 Current Single Discount Rate Assumption 7.25% c $2,738,355 I% Increase 8.25% $949,126 Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions: For the year ended June 30, 2016, the City recognized pension expense of $1,001,018. The City reported deferred outflows and inflows of resources related to pensions from the following sources: Differences in experience Excess (deficit) investment returns Change in assumptions Total Deferred Outflows Deferred Inflows of Resources $269,386 809,354 of Resources ($195,615) 338,032 - $1,416,772 ($195,615) Amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 30: 2017 $313,385 2018 313,385 2019 313,387 2020 220,309 2021 60,067 Thereafter 624 Total $1,221,157 The deferred outflows of resources related to the difference between expected and actual investment earnings is being amortized over a closed five-year period. The remaining deferred outflows and inflows of resources are being amortized over a closed period equal to the average of the expected service lives of all employees as of the beginning of each measurement period. Payable to the Pension Plan: The City reported a payable of $53,068 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2016. C. Commitments and Contingencies There are no claims for lawsuits to which the City is a part as a result of certain injuries and various other matters and complaints arising in the ordinary course of City activities. The City's management and legal counsel anticipate that any unknown potential claims, if any, against the City not covered by insurance would not have a material effect on the financial position of the City. 51 D. Federal and State Grants In the current and prior years the City has participated in a number of federal and state programs that were fully or partially funded by grants received from other governmental units. Expenditures financed by grants are subject to audit by the appropriate grantor government. If expenditures are disallowed due to noncompliance with grant program regulations, the City may be required to reimburse the grantor government. As of June 30, 2016 certain grant expenditures have not been audited by grantor governments, but the City believes that disallowed expenditures, if any, based on subsequent audits will not have a material effect on any of the individual governmental funds or the overall financial position of the City. E. Lease During fiscal year 2011, the City entered into a sales -type lease agreement with a private business (the lessee) which expires in fiscal year 2021. In connection with the agreement, the City purchased land for an approximate cost of $630,012. The lessee will pay the City $1,655,280 in order to lease the land; the title of the land will not transfer to the third party until the end of the lease term (December 2020). The lessee paid the City $762,300 during fiscal year 2011. The remaining balance of $892,980 was received in fiscal year 2012. In accordance with GASB Statement No. 62, this transaction resulted in a gain on a sales -type lease of $1,025,268 (difference between the cost of the land and the amount paid by the lessee). Because the title to the land will not be transferred to the lessee until the end of the lease term, this gain was recorded as a deferred inflow of resources - deferred gain on the City's government -wide statement of net position and is being recognized as revenue on a straight-line basis over the life of the lease. The amount of revenue recorded on the City's government -wide statement of activities for fiscal year ending June 30, 2016 is $102,526. The balance of the deferred gain on sales- leaseback as of June 30, 2016 is $1,091,382. During fiscal year 2015, the City entered into a sales -type lease agreement with a private business (the lessee) which expires in fiscal year 2017. In connection with the agreement, the City purchased land for an approximate cost of $553,434. The lessee paid the City $2,659,438 in order to lease the land; the title of the land will not transfer to the third party until the end of the lease term (June 2017). In accordance with GASB Statement No. 62, this transaction resulted in a gain on a sales -type lease. Because the title to the land will not be transferred to the lessee until the end of the lease term, this gain was recorded as a deferred inflow of resources - deferred gain on the City's government -wide statement of net position and is being recognized as revenue on a straight-line basis over the life of the lease. The amount of revenue recorded on the City's government -wide statement of activities for fiscal year ending June 30, 2016 is $1,063,003. The balance of the deferred gain on sales- leaseback as of June 30, 2016 is $1,411,340. 52 Note 9 — Governmental Accounting Standards Board Statements GASB has issued several statements not yet required to be implemented by the City. The City's management has not yet determined the effect these Statements will have on the City's financial statements. However, the City plans to implement all standards by required dates. The Statements which may impact the City are as follows: GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, issued in June 2015, will be effective for the City beginning with its fiscal year ending June 30, 2018. The Statement replaces the requirements of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions and requires governments to report a liability on the face of the financial statements for the OPEB they provide and outlines the reporting requirements by governments for defined benefit OPEB plans administered through a trust, cost-sharing OPEB plans administered through a trust and OPEB not provided through a trust. The Statement also requires governments to present more extensive note disclosures and required supplementary information about their OPEB liabilities. Some governments are legally responsible to make contributions directly to an OPEB plan or make benefit payments directly as OPEB comes due for employees of other governments. In certain circumstances, called special funding situations, the Statement requires these governments to recognize in their financial statements a share of the other government's net OPEB liability. GASB Statement No. 77, Tax Abatement Disclosures, issued August 2015, will be effective for the City beginning with its fiscal year ending June 30, 2017. This statement requires governments to disclose information about their own tax abatements separately from information about tax abatements that are entered into by other governments and reduce the reporting government's tax revenues. The disclosures about the government's own tax abatement agreements includes the purpose of the tax abatement program, the tax being abated, the amount of tax being abated, the provisions of recapturing abated taxes, the types of commitments made by tax abatement recipients, and other commitments made by government in tax abatement agreements. The disclosures about tax abatements that are entered into by other governments and reduce the reporting government's tax revenues includes the name of the government entering into the abatement agreement, the tax being abated, and the amount of the reporting government's tax being abated. GASB Statement No. 82, Pension Issues, issued April 2016, will be effective for the City, beginning with its fiscal year ending June 30, 2017. Statement No. 82 is designed to improve consistency in the application of the pension standards by clarifying or amending related areas of existing guidance with respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions, and No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. Specifically, this Statement addresses issues regarding (1) the presentation of payroll -related measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan member) contribution requirements. 53 City of Riverside, Missouri Required Supplementary Information Other Post Employment Benefit Plan Schedule of Funding Progress The information presented in the required supplementary schedule was determined as part of the actuarial valuation date as of July 1, 2015. Additional information follows: a. The actuarial method used to determine the ARC is the projected unit credit actuarial cost method. b. There are no plan assets. c. The actuarial assumptions included: (1) 4.5 percent investment rate of return and (b) a projected 7.0 percent cost trend for medical claims and prescriptions; reduced by decrements to an ultimate rate of 5 percent in 6 years. d. The amortization method is level percentage of pay over 30 years based on an open group. 54 (b -a) (b) Unfunded [(b-a)/c] (a) Actuarial (Over (c) UAAL as a Fiscal Actuarial Actuarial Accrued funded) (a/b) Annual Percentage Year Valuation Value Liability AAL Funded Covered of Covered Ended Date of Assets (AAL) (UAAL) Ratio Payroll Payroll 2014 7/1/2013 $ - $ 114,404 $ 114,404 - % $ 3,691,345 3.1% 2015 7/1/2013 - 114,404 114,404 - % 3,691,345 3.1% 2016 7/1/2015 - 115,281 115,281 - % 3,736,067 3.1% The information presented in the required supplementary schedule was determined as part of the actuarial valuation date as of July 1, 2015. Additional information follows: a. The actuarial method used to determine the ARC is the projected unit credit actuarial cost method. b. There are no plan assets. c. The actuarial assumptions included: (1) 4.5 percent investment rate of return and (b) a projected 7.0 percent cost trend for medical claims and prescriptions; reduced by decrements to an ultimate rate of 5 percent in 6 years. d. The amortization method is level percentage of pay over 30 years based on an open group. 54 City of Riverside, Missouri Missouri Local Government Employees Retirement System Required Supplementary Information Schedule of Changes in Net Pension Liability and Related Ratios Last 10 Fiscal Years Fiscal year ending June 30, Total Pension Liability Service Cost Interest on the Total Pension Liability Benefit Changes Difference between expected and actual experience Assumption Changes Benefit Payments Refunds Net Change in Total Pension Liability Total Pension Liability beginning Total Pension Liability ending Plan Fiduciary Net Position Contributions -employer Contributions -employee Pension Plan Net Investment income Benefit Payments Refunds Pension Plan Administrative expense Other Net Change in Plan Fiduciary Net Position Plan Fiduciary Net Position beginning Plan Fiduciary Net Position ending Employer Net Pension Liability Plan Fiduciary Net Position as a percentage of the Total Pension Liability Covered Employee Payroll Employer's Net Pension Liability as a percentage of covered employee payroll 2016 2015 $ 480,583 $ 465,251 795,380 715,173 (51,932) 195,168 393,633 - (240,061) (312,317) 1,377,603 1,063,275 10,852,609 9,789,334 $ 12,230,212 $ 10,852,609 $ 700,760 $ 713,467 10,866 167,165 (240,061) (312,317) (9,845) (9,599) (75,346) 28,155 386,374 586,871 9,105,483 8,518,612 $ 9,491,857 $ 9,105,483 $ 2,738,355 $ 1,747,126 97.20% 104.09% $ 4,106,637 $ 3,814,750 66.68% 45.80% Notes to schedule: GASB Statement No. 68 requires ten years of information to be presented in this table. However, until a full 10 -year trend is compiled, the City will present information for those years for which information is available. 55 (THIS PAGE LEFT BLANK INTENTIONALLY) City of Riverside, Missouri Missouri Local Government Employees Retirement System Required Supplementary Information SCHEDULE OF CONTRIBUTIONS Last 10 Fiscal Years 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Actuarially determined contribution $700,103 $717,000 $703,828 $649,559 $626,517 $605,177 $530,374 $344,093 $293,701 $214,625 Contributions in relation to the actuarially determined contribution 700,103 712,502 676,577 642,214 626,517 605,177 530,374 343,732 293,701 214,521 Contribution deficiency (excess) $0 $4,498 $27,251 $7,345 $0 $0 $0 $361 $0 $104 Covered -employee payroll $4,039,173 $3,926,513 $3,868,205 $3,692,007 $3,724,212 $3,585,177 $3,360,791 $2,853,226 $2,393,671 $2,001,069 Contributions as a percentage of covered - employee payroll 17.33% 18.15% 17.49% 17.39% 16.82% 16.88% 15.78% 12.05% 12.27% 10.72% Note: For a complete description of the actuarial assumptions used in the annual valuations, please refer to Footnote 8.6. or please contact the LAGERS office in Jefferson City. 56 City of Riverside, Missouri Combining Balance Sheet Nonmajor Governmental Funds June 30, 2016 Special Revenue 57 DUI Tourism Federal & State Fund Tax Grants Assets Cash and investments $ 34,695 $ 439,276 $ - Taxes receivable - 22,270 - Due from other governments - - 504 Total assets $ 34,695 $ 461,546 $ 504 Liabilities Accounts payable $ - $ - $ - Due to other funds - - 504 Total liabilities - - 504 Fund balances Restricted for: Law enforcement 34,695 - - Tourism - 461,546 - Community development - - - Committed for, capital projects - - - Total fund balance 34,695 461,546 - Total liabilities and fund balances $ 34,695 $ 461,546 $ 504 57 Special Revenue Capital Project Total Nonmajor Officer Inmate Fire -Police Capital Community Governmental Training Security Athletic League Equipment Development Funds $ 11,561 $ 28,268 $ 67,318 $ 310,630 $ 393,379 $ 1,285,127 - - - - - 22,270 504 11,561 $ 28,268 $ 67,318 $ 310,630 $ 393,379 $ 1,307,901 $ 262 $ - $ 1,121 $ 10,056 $ - $ 11,439 - - - - - 504 262 - 1,121 10,056 - 11,943 11,299 28,268 66,197 - - 140,459 - - - - - 461,546 - - - 393,379 393,379 - - - 300,574 - 300,574 11,299 28,268 66,197 300,574 393,379 1,295,958 $ 11,561 $ 28,268 $ 67,318 $ 310,630 $ 393,379 $ 1,307,901 58 City of Riverside, Missouri Combining Statement of Revenues, Expenditures and Changes in Fund Balance Nonmajor Governmental Funds For the Year Ended June 30, 2016 Revenue: Taxes, tourism tax Intergovernmental revenue Fines and forfeitures Recreation fees Miscellaneous revenue Tax increment financing revenue Total revenue Expenditures: Current: Administrative and support Public safety administration Police services Fire services Public works Community Development Total expenditures Excess of revenue over/(under) expenditures Other financing sources/(uses) Transfers in Total other financing sources Net change in fund balance Fund balance, beginning of year Fund balance, end of year Special Revenue DUI Tourism Federal & State Fund Tax Grants - $ 217,779 $ - - - 25,742 2,043 - - - 450 - 25,742 2,043 218,229 160,270 - 225 - 10,575 17,843 225 160,270 28,418 1,818 57,959 (2,676) 2,676 2,676 1,818 57,959 - 32,877 403,587 - $ 34,695 $ 461,546 $ - 59 Special Revenue Capital Project - - - 26,264 Total 186,534 - - - Nonmajor Officer Inmate Fire -Police Capital Community Governmental Training Security Athletic League Equipment Development Funds $ - $ - $ - $ - $ - $ 217,779 - - - - - 25,742 5,005 3,284 - - - 10,332 - - 36,356 - - 36,806 - - 6,536 - - 6,536 - - - - 105,410 105,410 5,005 3,284 42,892 - 105,410 402,605 - - - 26,264 - 186,534 - - - 729 - 729 12,162 - 35,757 108,690 - 167,409 - - - 173 - 173 - - - 81,378 - 99,221 - - - 22,414 - 22,414 12,162 - 35,757 239,648 - 476,480 (7,157) 3,284 7,135 (239,648) 105,410 (73,875) - - - 300,000 1,955 304,631 - - - 300,000 1,955 304,631 (7,157) 3,284 7,135 60,352 107,365 230,756 18,456 24,984 59,062 240,222 286,014 1,065,202 $ 11,299 $ 28,268 $ 66,197 $ 300,574 $ 393,379 $ 1,295,958 (THIS PAGE LEFT BLANK INTENTIONALLY) City of Riverside, Missouri Combining Schedule of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds Budget to Actual For the Year Ended June 30, 2016 Revenues: Taxes, tourism tax Recreation fees Total revenues Expenditures: Current: Administrative and support Revenues over expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year 61 Tourism Tax Fund Budget Actual $ 175,000 $ 217,779 - 450 175,000 218,229 175,000 160,270 57,959 $ - 57,959 403,587 $ 461,546 City of Riverside, Missouri Combining Schedule of Revenues, Expenditures and Changes in Fund Balances Capital Project Funds Budget to Actual For the Year Ended June 30, 2016 Revenues: Gaming revenue Charges for services Investment earnings Intergovernmental revenue Tax increment financing revenue Developer contributions Total revenues Expenditures: Current: Administrative and support Public safety administration Police services Fire services Public works Community development Capital outlay Total expenditures Revenues (under) expenditures Other financing sources: Transfers in Transfers out Bond proceeds Total other financing sources (uses) Net change in fund balance Fund balance, beginning of year Fund balance, end of year Capital Improvements Fund Community Development Fund Budget Actual Budget Actual $ 5,842,500 $ 6,569,566 $ - $ - - 1,860 - - 400 112 400 - 1,200,000 457,772 - - - - 101,500 105,410 1,057,605 - - 7,042,900 8,086,915 101,900 105,410 4,724,700 2,768,726 650,000 - 4,724,700 2,768,726 650,000 - 2,318,200 5,318,189 (548,100) 105,410 1,955 (3,000,000) (2,300,000) - - 1,100,000 - (3,000,000) (2,300,000) 1,100,000 1,955 $ (681,800) 3,018,189 $ 551,900 107,365 544,497 286,014 $ 3,562,686 $ 393,379 Capital Equipment Fund Budget Actual 31,500 26,264 - 729 115,000 108,690 - 173 106,000 81,378 30,000 22,414 282,500 239,648 (282,500) (239,648) 300,000 300,000 300,000 300,000 $ 17,500 60,352 240,222 $ 300,574 63 (THIS PAGE LEFT BLANK INTENTIONALLY) City of Riverside, Missouri Schedule of Revenues, Expenditures and Changes in Fund Balances Tax Increment Financing Debt Service Fund Budget to Actual For the Year Ended June 30, 2016 Revenues: Investment earnings Tax increment financing revenue Total revenues Expenditures: Current: Administrative and support Debt service: Principal Interest Total expenditures Revenues (under) expenditures Other financing sources (uses), Proceeds from sale - leaseback Transfers in Total other financing sources (uses) Changes in fund balance Fund balance, beginning of year Fund balance, end of year Budget Actual $ 50,000 $ 38,730 5,965,000 6,549,491 6,015,000 6,588,221 1,618,000 1,709,799 3,775,000 3,775,000 1,497,000 1,373,481 6,890,000 6,858,280 (875,000) (270,059) 268,875 - 139,106 407,981 $ (875,000) 137,922 6,193,653 $ 6,331,575 City of Riverside, Missouri Statement of Changes in Assets and Liabilities - Agency Fund For the Year Ended June 30, 2016 Municipal Court Bond Account Assets: Cash and investments Liabilities: Due to others Balance Balance June 30, 2015 Additions Deletions June 30, 2016 $ 20,629 $ 50,479 $ 56,174 $ 14,934 $ 20,629 $ 50,479 $ 56,174 $ 14,934 65 Statistical Section This part of the City of Riverside's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. Contents Page Financial Trends 67-74 These schedules contain trend information to help the reader understand how the government's financial performance and well- being have changed over time. Revenue Capacity 75-79 These schedules contain information to help the reader assess the government's most significant local revenue source, the gaming revenue. Debt Capacity 80-81 These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. Demographic and Economic Information 82-83 These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. Operating Information 84-86 These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. City of Riverside, Missouri Net Position Last Ten Fiscal Years (Accrual Basis of Accounting) (unaudited) Note: The City adopted GASB Statement No. 68 in fiscal year 2015. Although beginning net position on the basic financial statements was restated, this schedule has not been adjusted for years prior to 2015. Note 2: Beginning with year 2014, the City reclassified the presentation of certain amounts previously presented as restricted. This schedule has not been adjusted for years prior to 2014. 67 Fiscal Year 2016 2015 2014 2013 Governmental Activities Net investment in capital assets $ 95,665,293 $ 95,152,969 $ 93,573,067 $ 97,455,751 Restricted 4,940,502 1,369,477 803,511 8,978,799 Unrestricted 590,015 (1,937,545) (1,482,081) (7,486,325) Total governmental activities net position $ 101,195,810 $ 94,584,901 $ 92,894,497 $ 98,948,225 Note: The City adopted GASB Statement No. 68 in fiscal year 2015. Although beginning net position on the basic financial statements was restated, this schedule has not been adjusted for years prior to 2015. Note 2: Beginning with year 2014, the City reclassified the presentation of certain amounts previously presented as restricted. This schedule has not been adjusted for years prior to 2014. 67 Fiscal Year 2012 2011 2010 2009 2008 2007 $ 87,447,540 $ 80,614,617 $ 61,176,406 $ 53,635,284 $ 48,718,762 $ 41,078,438 11,601,649 7,372,933 6,038,985 6,518,739 7,597,468 10,829,277 (440,616) 9,318,551 22,635,921 25,348,214 21,798,661 18,414,707 $ 98,608,573 $ 97,306,101 $ 89,851,312 $ 85,502,237 $ 78,114,891 $ 70,322,422 68 City of Riverside, Missouri Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (unaudited) Expenses Governmental activities Administrative and support Municipal court Public safety administration* Police services Operations support Fire services Public works Parks and recreation Community development Engineering* Interest on long-term debt Total governmental activities expenses Program revenues Governmental activities Charges for services: Administrative and support Police services Public works Parks and recreation Community development Operating grants and contributions: Police services Public works Capital grants and contributions Total governmental activities program revenues Net (expense)/revenue governmental activities General revenue and other changes in net position Governmental activities Taxes Sales taxes Franchise taxes Tourism taxes Tax increment financing Unrestricted grants and contributions Interest on accounts Real estate income - gaming Gaming revenue Gain on purchase of bonds Gain on land lease Gain on sale of capital position Miscellaneous Total governmental activities Change in net position Governmental activities Fiscal Year 2016 2015 2014 2013 $ 3,519,978 $ 3,536,140 $ 3,361,653 $ 3,291,806 170,276 178,317 175,443 168,189 430,164 435,851 512,170 645,375 2,651,575 2,551,494 2,560,182 2,543,564 591,337 585,905 549,291 606,699 1,677,323 1,582,358 1,563,803 1,418,114 5,251,959 5,191,014 14,302,013 9,024,716 773,345 745,998 773,333 725,478 449,579 442,382 368,024 499,425 206,224 202,569 201,177 - 1,666,391 1,982,428 2,395,524 2,481,272 17,388,151 17,434,456 26,762,613 21,404,638 47,948 45,850 42,498 41,535 254,540 289,082 366,880 356,142 400,424 278,171 - 186,168 68,643 62,537 68,084 77,587 128,375 103,251 57,701 58,196 25,742 13,822 6,455 8,906 457,772 46,767 1,165,046 3,512,010 1,383,444 839,480 1,706,664 4,240,544 ######### (16,594,976) (25,055,949) (17,164,094) 1,697,356 1,378,151 1,445,549 1,397,363 813,186 716,542 714,460 651,528 217,779 184,262 166,584 169,910 6,654,901 5,123,842 3,883,538 3,335,920 348,521 371,948 254,291 238,557 87,952 89,580 47,676 51,762 4,394,870 4,182,418 4,060,295 4,155,181 6,569,566 6,303,001 6,399,850 7,133,275 1,300,452 1,094,726 1,843,665 1,153,512 141,443 111,632 186,313 26,529 22,226,026 19,556,102 19,002,221 18,313,537 $ 6,221,319 $ 2,961,126 j__( 6,053,728) $ 1,149,443 *In fiscal year 2009, the public safety administration division was separated out of the police services division. **In fiscal year 2014, the engineering division was separated out of the community services division. Note: The City adopted GASB Statement No. 68 in fiscal year 2015. Although beginning net position on the basic financial statements was restated, this schedule has not been adjusted for years prior to 2015. •4 Fiscal Year 2012 2011 2010 2009 2008 2007 $ 3,340,602 $ 3,167,034 $ 2,878,084 $ 2,439,544 $ 2,150,847 $ 2,694,557 163,037 151,884 144,889 139,254 128,042 145,539 555,516 474,639 462,810 460,205 - - 2,331,412 2,132,814 2,119,296 2,081,567 2,455,356 2,432,659 700,555 633,732 563,120 532,437 322,307 314,216 1,247,599 1,256,523 1,175,275 653,289 563,689 337,003 9,347,065 5,585,388 7,064,953 6,079,598 6,521,927 10,322,100 776,223 595,934 514,852 394,585 467,388 434,439 560,864 613,821 438,747 569,776 613,444 220,725 2,673,512 2,393,978 2,532,675 2,657,463 2,759,984 1,407,112 21,696,3 85 17,005,747 17,894,701 16,007,718 15,982,984 18,308, 350 40,154 41,426 39,500 48,735 57,344 54,434 269,042 272,520 336,073 250,397 188,911 227,052 347,037 4,004,893 1,761,757 1,661,146 - - 66,564 54,281 57,851 34,102 22,279 24,370 47,773 25,695 26,265 42,540 48,474 43,235 32,747 12,122 14,710 19,403 29,303 45,604 - - - - 9,113 32,377 21279,000 510,410 443,985 - 1,030,000 - 3,082,317 4,921,347 2,680,141 2,056,323 1,385,424 427,072 (18,614,068) (12,084,400) (15,214,560) (13,951,395) (14,597,560) (17,881,278) 1,358,640 1,256,558 1,207,371 1,162,363 1,264,328 1,301,457 587,217 583,266 605,841 505,060 614,565 437,693 173,663 176,958 175,603 178,053 182,475 52,028 2,615,532 2,531,727 2,322,386 2,422,337 2,190,264 1,922,001 287,393 297,315 288,481 290,614 271,772 292,251 187,308 274,702 413,453 1,624,693 3,554,557 2,244,178 4,424,307 4,972,759 4,876,918 5,079,236 5,049,125 4,913,928 8,528,022 9,333,622 9,550,347 9,718,310 9,170,049 8,550,830 - 120,000 20,000 341,800 - - 325,557 51,263 - - - - 1,410,165 18,736 44,782 103,235 16,275 92,894 25,310 19,916,540 19,642,952 19,563,635 21,338,741 22,390,029 19,739,676 $ 1,302,472 $ 7,558,552 $ 4,349,075 $ 7,387,346 $ 7,792,469 $ 1,858,398 70 City of Riverside, Missouri Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (unaudited) Total all other governmental funds $ 11,197,651 $ 7,803,352 $ 6,923,593 $ 9,034,040 $ 11,755,164 71 Fiscal Year 2016 2015 2014 2013 2012 General fund Unassigned $ 6,328,625 $ 5,585,914 $ 5,564,281 $ 7,391,475 $ 12,642,233 Total general fund $ 6,328,625 $ 5,585,914 $ 5,564,281 $ 7,391,475 $ 12,642,233 All other governmental funds Restricted for: Debt service $ 5,956,575 $ 6,193,653 $ 5,945,362 $ 6,466,375 $ 5,327,671 Capital improvements 3,945,118 544,497 98,722 1,867,992 4,200,664 Community development 393,379 286,014 184,514 145,884 1,618,153 Law enforcement 140,459 135,379 128,051 106,265 76,991 Tourism 461,546 403,587 392,224 392,283 378,170 Committed for, capital projects 300,574 240,222 174,720 55,241 153,515 Total all other governmental funds $ 11,197,651 $ 7,803,352 $ 6,923,593 $ 9,034,040 $ 11,755,164 71 Fiscal Year 2011 2010 2009 2008 2007 $ 22,822,235 $ 25,730,000 $ 28,304,417 $ 34,169,319 $ 33,106,575 $ 22,822,235 $ 25,730,000 $ 28,304,417 $ 34,169,319 $ 33,106,575 5,712,998 $ 5,819,205 $ 6,318,578 $ 5,783,385 $ 5,309,363 284,563 7,165,710 14,452,483 25,249,399 37,847,937 985,069 3,439,590 4,057,846 2,819,163 2,999,512 68,250 59,645 77,775 80,031 14,062 322,053 296,299 315,274 262,967 75,968 106,335 329,317 647,410 413,319 149,187 $ 7,479,268 $ 17,109,766 $ 25,869,366 $ 34,608,264 $ 46,396,029 72 City of Riverside, Missouri Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (unaudited) Fiscal Year 2016 2015 2014 2013 2012 Revenues Taxes $ 2,728,321 $ 2,278,955 $ 2,326,593 $ 2,218,801 $ 2,119,520 Intergovernmental revenue 832,035 432,537 1,080,549 3,496,318 1,399,140 Charges for services 1,860 28,173 345,243 186,168 347,037 Investment earnings 87,952 89,580 47,676 51,762 187,308 Real estate income - gaming 4,394,870 4,182,418 4,060,295 4,155,181 4,424,307 Gaming revenue 6,569,566 6,303,001 6,399,850 7,133,275 8,528,022 Licenses and fees 176,323 149,101 100,199 99,731 87,927 Fines and forfeitures 254,540 289,082 366,880 356,142 269,042 Recreation fees 68,643 62,537 68,084 77,587 66,546 Miscellaneous 40,145 12,194 138,950 26,429 18,736 TIF revenue 6,654,901 5,123,842 3,883,538 3,432,013 2,519,439 Developer contribution 1,057,605 1,717,957 1,396,227 2,540,649 1,757,460 Proceeds from sale-leaseback 268,875 494,745 367,115 405,087 1,681,691 Total revenues 23,135,636 21,164,122 20,581,199 24,179,143 23,406,175 Expenditures Administrative and support 3,556,565 3,505,623 3,296,734 3,166,187 3,203,812 Municipal court 170,866 177,974 172,938 166,973 161,947 Public safety administration** 424,178 439,051 512,201 617,544 590,283 Police services 2,332,919 2,242,909 2,282,508 2,241,434 2,060,787 Operations support 588,216 594,077 545,778 594,086 674,363 Fire services 1,569,336 1,563,418 1,497,050 1,331,481 1,182,911 Public works 1,510,818 1,400,168 1,469,270 1,548,537 1,202,728 Parks and recreation 642,074 585,065 617,043 598,104 661,711 Community development 469,676 440,189 366,814 488,233 553,536 Engineering* 199,203 198,042 194,649 - - Capital outlay 2,386,294 4,455,505 7,808,465 16,861,669 14,402,799 Principal 3,775,000 3,190,000 3,665,000 3,395,000 5,060,000 Interest 1,373,481 1,470,709 1,870,256 2,012,606 2,161,639 Bond issuance costs - 106,758 - 79,419 Total expenditures 18,998,626 20,262,730 24,405,464 33,021,854 31,995,935 Excess of revenues over(under)expenditures 4,137,010 901,392 (3,824,265) (8,842,711) (8,589,760) Other financing sources (uses) Transfers in 3,118,737 3,504,604 4,504,978 5,908,490 11,042,374 Transfers out (3,118,737) (3,504,604) (4,504,978) (5,908,490) (11,042,374) Issuance of TIF bonds - - 7,640,000 - 2,385,000 Payment to refunded bond escrow agent - - (8,065,827) - - 5ale of capital assets - - - 870,829 282,826 Premium on bonds issuance - - 312,451 - 17,810 Discount on bonds issuance - - - Total other financing sources (uses) - - (113,376) 870,829 2,685,636 Net change in fund balances $ 4,137,010 $ 901,392 $ (3,937,641) $ (7,971,882) $ (5,904,124) Debt service as a percentage of noncapital expenditures 29% 27% 30% 25% 31% *In fiscal year 2014, the engineering division was separated out of the community development division. **In fiscal year 2009, the public safety administration division was separated out of the police services division 73 Fiscal Year 2011 2010 2009 2008 2007 $ 2,152,052 $ 1,853,545 $ 1,845,476 $ 2,061,368 $ 1,791,178 809,437 316,176 310,017 310,188 370,232 4,060,752 1,705,898 1,661,146 - - 274,702 413,453 1,624,693 3,554,557 2,244,178 4,972,759 4,876,918 5,079,236 5,049,125 4,913,928 9,333,622 9,550,347 9,718,310 9,170,049 8,550,830 67,121 65,765 91,275 105,818 97,669 272,520 336,073 250,397 188,911 227,052 54,281 57,851 34,102 22,279 24,370 44,782 103,235 16,275 92,894 25,310 2,531,727 2,322,386 2,422,337 2,190,264 1,922,001 762,300 - - - - 25,336,055 21,601,647 23,053,264 22,745,453 20,166,748 3,101,376 2,845,019 2,329,588 2,106,530 2,595,393 151,678 143,329 138,671 127,247 145,525 500,781 468,776 447,162 - - 2,083,386 2,059,677 1,957,651 2,370,824 2,156,671 607,814 574,827 504,515 369,433 296,153 1,173,397 1,140,734 590,159 501,427 387,864 1,225,402 1,271,986 1,045,468 796,276 832,589 592,584 506,783 406,136 382,808 307,784 467,172 448,632 575,992 610,839 218,351 21,080,414 18,557,731 23,436,065 18,862,799 16,678,172 4,340,000 2,275,000 3,548,200 1,880,000 940,000 2,420,314 2,539,407 2,677,457 2,762,291 937,915 - - - - 996,670 37,874,318 32,831,901 37,657,064 30,770,474 26,493,087 (13,300,563) (11,230,254) (14,603,800) (8,025,021) (6,326,339) 5,844,652 4,736,748 7,269,467 2,043,799 10,083,923 (5,844,652) (4,736,748) (7,269,467) (2,043,799) (10,083,923) 40,265,000 846,479 (62,500) 762,300 - - - 41,048,979 $(12,538,263) $ (11,230,254) $(14,603,800) $ (8,025,021) $ 34,722,640 35% 27% 34% 28% 11% 74 City of Riverside, Missouri Tax Revenues by Source Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (unaudited) Fiscal Year Sales Tax Franchise Tax Tourism Tax 2007 1,301,457 437,693 52,028 2008 1,264,328 614,565 182,475 2009 1,162,363 505,060 178,053 2010 1,207,371 470,571 175,603 2011 1,256,558 583,266 176,958 2012 1,358,640 587,217 173,663 2013 1,397,363 651,528 169,910 2014 1,445,549 714,460 166,584 2015 1,378,151 716,542 184,262 2016 1,697,356 813,186 217,779 Vill Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 City of Riverside, Missouri Direct and Overlapping Sales Tax Rates Last Ten Fiscal Years (unaudited) City 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 County* 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 * Source: Missouri Department of Revenue FL State* 4.225 4.225 4.225 4.225 4.225 4.225 4.225 4.225 4.225 4.225 Total 6.600 6.600 6.600 6.600 6.600 6.600 6.600 6.600 6.600 6.600 Fiscal Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 City of Riverside, Missouri Gaming Revenue and Real Estate Income Last Ten Fiscal Years (Modified Accrual Basis of Accounting)* (unaudited) Gaming Revenue 8,550,830 9,170,049 9,718,310 9,550,347 9,333,622 8,528,022 7,133,275 6,399,850 6,303,001 6,549,491 Real Estate Income Total 4,913,928 13,464,758 5,049,125 14,219,174 5,079,236 14,797,546 4,876,918 14,427,265 4,972,759 14,306,381 4,424,307 12,952,329 4,155,181 11,288,456 4,060,295 10,460,145 4,182,418 10,485,419 4,394,870 10,944,361 *In FY 2012, a fifth casino was opened in the Kansas City metropolitan area. Fiscal Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 City of Riverside, Missouri Gaming Revenue Rates Last Ten Fiscal Years (unaudited) Admission Fee $1 per patron $1 per patron $1 per patron $1 per patron $1 per patron $1 per patron $1 per patron $1 per patron $1 per patron $1 per patron Source: Missouri Gaming Commission 77 % of Adjusted Gross Revenue 2.0% 2.0% 2.1% 2.1% 2.1% 2.1% 2.1% 2.1% 2.1% 2.1% City of Riverside, Missouri Riverside Argosy Casino Kansas City Market Share Last Ten Fiscal Years (unaudited) Source: Missouri Gaming Commission & Kansas Gaming Commission *In FY 2012, a fifth casino was opened in the Kansas City metropolitan area. 78 Percentage of Adjusted Fiscal Year Gross Receipts 2007 23.83% 2008 26.04% 2009 27.48% 2010 27.31% 2011 27.16% 2012 24.14% 2013 20.36% 2014 19.77% 2015 19.34% 2016 20.91% Source: Missouri Gaming Commission & Kansas Gaming Commission *In FY 2012, a fifth casino was opened in the Kansas City metropolitan area. 78 City of Riverside, Missouri Ratios of Outstanding Debt Last Ten Fiscal Years (unaudited) Percentage Fiscal TIF of Personal Year Bonds Income* 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 57,650,000 55,770,000 51,880,000 49,585,000 45,125,000 42,450,000 39,055,000 35,360,000 32,896,406 29,025,580 45.81% 40.26% 38.62% 38.67% 33.42% 30.04% 26.87% 23.21% 20.55% 17.74% Per Capita* 19,070 18,309 16,817 16,808 15,148 14,089 12,834 11,425 10,345 9,128 * See the Schedule of Demographic and Economic Statistics on page 83 for personal income and population data. 79 Direct Debt: City of Riverside Overlapping Debt: Platte County, Missouri Park Hill School District Total overlapping debt Total direct and overlapping debt City of Riverside, Missouri Direct and Overlapping Debt As of June 30, 2016 (unaudited) Outstanding Debt 29,025,580 43,525,058 87,007,229 130,532,287 159,557,867 4.9% 2,119,326 7.2% 6,271,219 8,390,544 37,416,124 (1) Determined by ratio of assessed value in overlapping unit compared to the taxable assessed value within the corporate limits of the City of Riverside. 80 2,218,319,502 1,498,600,310 Estimated Estimated Share of Percentage Overlapping Applicable (1) Debt Assessed Valuation 100.0% 29,025,580 108,014,589 4.9% 2,119,326 7.2% 6,271,219 8,390,544 37,416,124 (1) Determined by ratio of assessed value in overlapping unit compared to the taxable assessed value within the corporate limits of the City of Riverside. 80 2,218,319,502 1,498,600,310 Fiscal Year TIF Revenues 2007 1,922,001 2008 2,190,264 2009 2,422,337 2010 2,278,764 2011 2,469,629 2012 * 2,406,697 2013 3,334,312 2014 ** 3,773,369 2015 5,018,593 2016 6,549,491 City of Riverside, Missouri Pledged -Revenue Coverage Last Ten Fiscal Years (unaudited) Debt Service Principal Interest Coverage 940,000 1,407,112 0.82 1,880,000 2,759,983 0.47 3,548,200 2,677,457 0.39 2,275,000 2,539,407 0.47 4,340,000 2,420,314 0.37 2,675,000 2,161,639 0.50 3,395,000 2,012,606 0.62 3,665,000 1,870,256 0.68 3,190,000 1,470,709 1.08 3,775,000 1,373,481 1.27 *In 2012, the City issued $2,385,000 of bonds to refund the 1998, 1999 and 2002 Tax Increment Financing Revenue Bonds, which has been excluded from above principal payments. **In 2014, the City issued $7,640,000 of bonds to refund the 2004 Tax Increment Financing Revenue Bonds, which has been excluded from above principal payments. 81 City of Riverside, Missouri Demographic and Economic Statistics Last Ten Fiscal Years (unaudited) Sources: (a) Mid-America Regional Council Research Services - (www.metrodataline.org) (b) U.S. Bureau of Economic Analysis (c) American Community Survey (d) U.S. Department of Labor for Platte County, Missouri 82 Per Capita Total Median Personal Personal Family Unemployment Population Income Income Income Rate Fiscal Year (a) (b) (b) (c) (d) 2007 3,023 41,627 125,838,421 64,907 3.9% 2008 3,046 45,474 138,513,804 64,347 4.1% 2009 3,085 43,539 134,317,815 65,383 5.1% 2010 2,950 43,463 128,215,850 65,948 7.8% 2011 2,979 45,320 135,008,280 66,487 7.2% 2012 3,013 46,893 141,288,609 67,419 5.8% 2013 3,043 47,771 145,367,153 67,721 6.0% 2014 3,095 49,232 152,373,040 68,638 5.5% 2015 3,180 50,328 160,043,612 70,166 4.7% 2016 3,180 51,447 163,601,030 71,726 4.6% Sources: (a) Mid-America Regional Council Research Services - (www.metrodataline.org) (b) U.S. Bureau of Economic Analysis (c) American Community Survey (d) U.S. Department of Labor for Platte County, Missouri 82 Employer Adient/Hoover Universal Argosy Casino Yanfeng USA U.S. Farathane Martinrea Riverside Capital Electric ABC Employment Holdings Park Hill School District Woodbridge Northpoint Development Co. Alpine Nursing/Rehab Center Faurecia/ Riverside Seat Company Knappco/Civacon Corner Caf6 Red X Apria Medical Intercontinental Engineering Total City of Riverside, Missouri Principal Employers Current Year and Nine Years Ago (unaudited) Employees 755 750 586 381 375 355 277 160 153 120 3,157 2016 Rank 1 2 3 4 5 6 7 8 9 10 Percentage of Percentage of Total City Total City Employment Employees 11.4% - 11.3% 934 8.9% - 5.8% - 5.7% - 5.4% - 4.2% - 2.4% 160 2.3% 164 1.8% - 0.0% 167 0.0% 144 0.0% 142 0.0% 120 0.0% 105 0.0% 100 0.0% 79 47.8% 2,115 Source: City of Riverside city clerk business license database. 83 2007 Percentage of Total City Rank Employment - 0.0% 1 24.8% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% 4 4.2% 3 4.4% - 0.0% 2 4.4% 5 6.2% 6 3.8% 7 3.2% 8 2.7% 9 2.8% 10 2.1% City of Riverside, Missouri Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years (unaudited) 84 Fiscal Year 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Function General government 8 8 7 7 8 8 7 7 7 7 Municipal court 1 1 1 1 1 1 1 1 1 1 Public safety Public safety administration 2 2 3 3 3 3 3 3 - - Police Officers 24 24 25 25 25 24 24 24 25 23 Civilians - - - - - - - - 1 1 Operations support 1 l 11 11 10 10 10 10 8 6 6 Fire 14 14 14 14 14 14 14 11 3 1 Public works 9 9 9 9 8 8 8 8 8 9 Engineering 2 2 2 - - - - - - - Parks & recreation 2 2 2 2 2 2 2 2 2 2 Community development 5 5 4 7 5 5 5 4 4 4 Total 78 78 78 78 76 75 74 68 57 54 Source: City of Riverside operating budget documents 84 City of Riverside, Missouri Operating Indicators by Function/Program Last Ten Fiscal Years (unaudited) Note: Data is not available for the fire services division prior to 2007. 85 Fiscal Year 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Function/Program Police Services*: Traffic & ordinance citations 2,898 2,062 2,965 3,225 2,825 2,180 3,491 2,667 3,798 2,939 Municipal & state arrests 1,044 1,335 1,298 1,328 1,151 1,023 1,293 1,018 901 1,067 Fire Services* Structure fires 9 8 10 13 5 7 9 8 5 9 Calls for service 1,387 1,084 1,048 1,049 1,105 1,075 943 788 487 293 Inspections conducted 533 590 568 535 418 416 397 479 354 5 Building Codes**: Commercial building permits 4 7 34 45 32 19 17 25 20 9 Residential building permits 42 22 40 65 24 15 19 23 20 49 *Source: City of Riverside public safety department * * Source: City of Riverside community development department Note: Data is not available for the fire services division prior to 2007. 85 City of Riverside, Missouri Capital Asset Statistics by Function/Program Last Ten Fiscal Years (unaudited) Fiscal Year 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Function/Program Police stations* l 1 1 1 1 1 1 1 1 1 Fire stations* l 1 1 1 1 1 1 1 1 1 Parks & recreation** Acreage 73 73 73 73 73 73 73 73 73 73 Parks 3 3 3 3 3 3 3 3 3 3 Softballfbaseball diamonds 1 1 1 1 1 1 1 1 1 1 Skateboard parks 1 1 1 1 1 1 1 1 1 1 Community center 1 1 1 1 1 1 1 1 1 1 Pools 1 1 1 1 1 1 1 1 1 1 Lane miles maintained by City*** 69 69 68 65 63 59 59 59 58 55 *Source: City of Riverside public safety department ** Source: City of Riverside parks and recreation division ***Source: City of Riverside public works department (THIS PAGE LEFT BLANK INTENTIONALLY) APPENDIX C DEFINITIONS OF WORDS AND TERMS AND SUMMARIES OF CERTAIN LEGAL DOCUMENTS (THIS PAGE LEFT BLANK INTENTIONALLY) APPENDIX C DEFINITIONS OF WORDS AND TERMS AND SUMMARIES OF CERTAIN LEGAL DOCUMENTS DEFINITIONS OF WORDS AND TERMS In addition to words and terms defined elsewhere in this Oficial Statement, the following are definitions of certain words and terms used in the Indenture, the Financing Agreement, the Authorizing Ordinance, the Continuing Disclosure Agreement and this Oficial Statement unless the context clearly otherwise requires. Reference is hereby made to the Indenture for complete definitions of all terms. "Act" means under the Missouri Industrial Development Corporation Act, Chapter 349 of the Revised Statutes of Missouri, as from time to time amended. "Additional Bonds" means any additional parity Bonds issued by the Authority pursuant to Section 203 of this Indenture that stand on a parity and equality under this Indenture with the Series 2017 Bonds (except with respect to the Series 2017 Debt Service Reserve Fund). "Additional Payments" means the Additional Payments described in the Financing Agreement. "Annual Report" means any Annual Report filed by the City pursuant to, and as described in, the Continuing Disclosure Agreement. "Authority Representative" means the Chairman, Vice Chairman, President, Vice President or Executive Director of the Authority, and any other duly authorized officer of the Authority whose authority to execute any particular instrument or take a particular action under the Indenture or the Financing Agreement shall be evidenced by a written certificate furnished to the City and the Trustee containing the specimen signature of such person or persons and signed on behalf of the Authority by its Chairman, President or Executive Director. "Authorizing Ordinance" means Ordinance No. 1565 of the City passed on October 17, 2017. "Beneficial Owner" means any Registered Owner of any Bonds and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Bond" or "Bonds" means the Series 2017 Bonds and any Additional Bonds issued pursuant to the Indenture. "Bond Issuance Date" means November 1, 2017. "Business Day" (i) with respect to the Indenture, means a day on which the Trustee and any Paying Agent shall be scheduled in the normal course of its operations to be open to the public for conduct of its banking operations and (ii) with respect to the Continuing Disclosure Agreement, means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal corporate trust office or designated payment office of the Bond Trustee or the Dissemination Agent is located are required or authorized by law to remain closed, or (c) a day on which the Securities Depository or the New York Stock Exchange is closed. C-1 "Cede & Co." means Cede & Co., as nominee of The Depository Trust Company, New York, New York. "City Representative" means the Mayor, City Administrator, the Director of Finance or the City Attorney, and any other duly authorized official of the City whose authority to execute any particular instrument or take a particular action under the Indenture or the Financing Agreement shall be evidenced by a written certificate furnished to the Authority and the Trustee containing the specimen signature of such person or persons and signed on behalf of the City by the City Administrator. "Continuing Disclosure Agreement" the Continuing Disclosure Agreement dated as of November 1, 2017, by and between the City and UMB Bank, N.A., as dissemination agent, for the benefit of holders of the Bonds, as from time to time amended in accordance with the provisions thereof. "Cooperation Agreement" means the Cooperation Agreement dated as of January 12, 2017, among the City, the Authority, UMB Bank, N.A., as trustee, Platte County, Missouri and the Riverside-Quindaro Bend Levee District of Platte County, Missouri, as amended from time to time in accordance with the provisions thereof. "Costs of Issuance" means issuance costs with respect to the Bonds, including but not limited to the following: (a) underwriter's spread (whether realized directly or derived through purchase of Bonds at a discount below the price at which they are expected to be sold to the public); (b) counsel fees (including bond counsel, disclosure counsel, City's counsel, as well as any other specialized counsel fees incurred in connection with the borrowing); (c) financial advisor fees of any financial advisor to the Authority or the City incurred in connection with the issuance of the Bonds; (d) raring agency fees; (e) trustee, escrow agent and paying agent fees; (f) accountant fees and other expenses related to issuance of the Bonds; (g) printing costs (for the Bonds and of the preliminary and final Official Statement relating to the Bonds); and (h) fees and expenses of the Authority incurred in connection with the issuance of the Bonds. "Costs of Issuance Fund" means the fund by that name created by the Indenture. "Debt Service Fund" means the fund by that name created by the Indenture. "Debt Service Reserve Fund" means the fund by that name created by the Indenture. "Debt Service Reserve Fund Requirement" means with respect to the Series 2017 Bonds, the amount of $1,000,000. C-2 "Default" means any event or condition which constitutes, or with the giving of any requisite notice or upon the passage of any requisite time period or upon the occurrence of both would constitute, an Event of Default. "Defeasance Obligations" means: (a) Government Obligations which are not subject to redemption prior to maturity; or (b) Cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with Government Obligations). "Dissemination Agent" means UMB Bank, N.A., acting in its capacity as Dissemination Agent under the Continuing Disclosure Agreement, or any successor Dissemination Agent designated in writing by the City. "Economic Activity Tax Revenues" means the revenues attributable to 50% of the increase in tax revenues (other than real property tax revenues) generated by economic activities within the Redevelopment Area, including sales and utility taxes, but excluding personal property taxes, hotel/motel taxes, licenses, fees and special assessments. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Environmental Regulations" means any federal, state or local law, statute, code, ordinance, regulation, requirement or rule defining and governing dangerous, toxic or hazardous pollutants, contaminants, chemicals, materials, or substances. "Escrow Agent" means UMB Bank, N.A., as Trustee and Paying Agent for the Refunded Bonds. "Escrow Agreement" means the Escrow Letter of Instructions from the City and the Authority to the Trustee dated the date of issuance of the Series 2017 Bonds and related to the refunding of the Refunded Bonds. "Escrow Fund" means the fund by that name created under the Escrow Agreement. "Event of Default" means any event of default as defined in the Indenture. "Event of Nonappropriation" means failure of the City to budget and appropriate on or before the last day of any Fiscal Year, moneys sufficient to pay the Financing Payments and reasonably expected Additional Payments due and payable during the next Fiscal Year. "Financing" means the Authority making the proceeds of the Series 2017 Bonds available to the City pursuant to the Financing Agreement. "Financing Agreement" means the Financing Agreement dated as of November 1, 2017, between the Authority and the City as from time to time amended by Supplemental Financing Agreements in accordance with the provisions of the Financing Agreement. "Financing Payment Date" means on or before the Business Day preceding the date any payment is due on the Series 2017 Bonds. "Financing Payments" means the payments of principal and interest on the Financing referred to in Section 3.2 of the Financing Agreement. C-3 "Fiscal Year" (i) with respect to the Indenture, means the City's fiscal year, which is currently July 1 to June 30, or as it may be defined by the City and (ii) with respect to the Continuing Disclosure Agreement, means the 12 -month period beginning on July 1 and ending on June 30 or any other 12 -month period selected by the City as the Fiscal Year of the City for financial reporting purposes. "Government Obligations" means the following: (a) bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed by, the United States of America; and (b) evidences of direct ownership of a proportionate or individual interest in future interest or principal payments on specified direct obligations of, or obligations the payment of the principal of and interest on which are unconditionally guaranteed by, the United States of America, which obligations are held by a bank or trust company organized and existing under the laws of the United States of America or any state thereof in the capacity of custodian in form and substance satisfactory to the Trustee. "Incremental Tax Revenues" means revenues which consist of (a) PILOTS derived from the Redevelopment Area, (b) Economic Activity Tax Revenues received by the City with respect to the Redevelopment Area and (c) the New State Revenues received by the City with respect to the Redevelopment Area. "Indenture" means the Bond Trust Indenture as originally executed by the Authority and the Trustee, as from time to time amended and supplemented by Supplemental Indentures in accordance with the provisions of the Indenture. "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended, and, when appropriate, any statutory predecessor or successor thereto, and all applicable regulations (whether proposed, temporary or final) thereunder and any applicable official rulings, announcements, notices, procedures and judicial determinations relating to the foregoing. "Material Events" means any of the events listed in the Continuing Disclosure Agreement. "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Trustee. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "New State Revenues" means revenue appropriated each year by the General Assembly of the State of Missouri pursuant to the State Supplemental Tax Increment Financing Program Amended Certificate of Approval. "Officer's Certificate" means a written certificate in the form described in the Indenture of the City by the City Representative, which certificate shall be deemed to constitute a representation of, and shall be binding upon, the City with respect to matters set forth therein, and which certificate in each instance, including the scope, form, substance and other aspects thereof, is acceptable to the Trustee. C-4 "Opinion of Bond Counsel" means a written opinion in the form described the Indenture of any legal counsel acceptable to the Authority and the Trustee who shall be nationally recognized as expert in matters pertaining to the validity of obligations of governmental issuers and the exemption from federal income taxation of interest on such obligations. "Opinion of Counsel" means a written opinion in the form described in the Indenture of any legal counsel acceptable to the City and the Trustee and, to the extent the Authority is asked to take action in reliance thereon, the Authority, who may be an employee of or counsel to the Trustee or the City. "Original Purchaser" means Stifel, Nicolaus & Company, Incorporated, underwriter of the Series 2017 Bonds. "Outstanding" means when used with respect to Bonds, as of the date of determination, all Bonds theretofore authenticated and delivered under the Indenture, except: (1) Bonds theretofore cancelled by the Trustee or delivered to the Trustee for cancellation as provided in the Indenture; (2) Bonds for whose payment or redemption money or Government Obligations in the necessary amount has been deposited with the Trustee or any Paying Agent in trust for the owners of such Bonds as provided in the Indenture, provided that, if such Bonds are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture or provision therefor satisfactory to the Trustee has been made; (3) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered under the Indenture; and (4) Bonds alleged to have been destroyed, lost or stolen which have been paid as provided in the Indenture. "Participants" means those financial institutions for whom the Securities Depository effects book -entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. "Participating Underwriter" means any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Paying Agent" means the Trustee and any other commercial bank or trust institution organized under the laws of any state of the United States of America or any national banking association designated pursuant to the Indenture or any Supplemental Indenture as paying agent for any series of Bonds at which the principal of, redemption premium, if any, and interest on such Bonds shall be payable. "Payments in Lieu of Taxes" or G°PILOTS" means those revenues attributable to the increase in the assessed valuation of real property within the Redevelopment Area over and above the initial assessed valuation of real property in the Redevelopment Area as of the date on which tax increment financing for the Redevelopment Area was adopted, which increase is multiplied by the then -current aggregate tax rate applicable to such property to determine the amount of PILOTS due. "Permitted Investments" means, if and to the extent the same are at the time legal for investment of funds held under the Indenture: (1) cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in paragraph (2) below); C-5 (2) direct obligations of (including obligations issued or held in book entry form on the books of) the Department of Treasury of the United States of America; (3) obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: - Export - Import Bank, - Farm Credit System Financial Assistance Corporation, - Rural Economic Community Development Administration (formerly the Farmers Home Administration), - General Services Administration, - U.S. Maritime Administration, - Small Business Administration, - Government National Mortgage Association (GNMA), - U.S. Department of Housing & Urban Development (PHA's), - Federal Housing Administration, and - Federal Financing Bank; (4) direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: Senior debt obligations rated at least as high as the sovereign debt rating of the United States by Moody's and "AAA" by Standard & Poor's issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC), Obligations of the Resolution Funding Corporation (REFCORP), and Senior debt obligations of the Federal Home Loan Bank System; (5) U.S. dollar denominated deposit accounts, federal funds and banker's acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "A-1" or "A-1+" by Standard & Poor's and "PA" by Moody's and maturing no more than 360 days after the date of purchase (ratings on holding companies are not considered as the rating of the bank); (6) commercial paper which is rated at the time of purchase in the single highest classification, "A-1+" by Standard & Poor's and "P-1" by Moody's and which matures not more than 270 days after the date of purchase; (7) investments in a money market fund rated "AAAm" or "AAAm-G" by Standard & Poor's; (8) "Pre -refunded Municipal Obligations," defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (A) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of Standard & Poor's and Moody's or any successors thereto; or (B) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (2) above, which escrow may be applied only to the payment of such principal of and interest and C-6 redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to above, as appropriate; provided, however, that Pre -refunded Municipal Obligations meeting the requirements of this subsection (B) may not be used as Permitted Investments without the prior written approval of Standard & Poor's. (9) general obligations of states with a rating of at least "AVA" or higher by both Moody's and Standard & Poor's; and (10) investment agreements (supported by appropriate opinions of counsel) with notice to Standard & Poor's. The value, which shall be determined as of each date any payment is due on the Series 2017 Bonds, of the above investments shall be calculated as follows: (a) as to investments the prices of which are received by the Trustee from pricing services utilized by it in the ordinary course of its trust business, the price received from such services; (b) as to certificates of deposit and bankers acceptances: the face amount thereof; and (c) as to any investment not specified above: the value thereof established by prior agreement between the City and the Trustee. "Person" means any natural person, firm, association, corporation, partnership, limited liability company, joint stock company, a joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. "Prime Rate" means, for any date of determination, the interest rate per annum publicly announced from time to time by the Trustee as its "prime rate." "Rebate Fund" means the fund by that name created by the Indenture. "Record Date" means the 15th day (whether or not a Business Day) of the calendar month next preceding the month in which an interest payment on any Bond is to be made. "Redevelopment Area" means the area described as such in the Cooperation Agreement. "Refunded Bonds" means, collectively, the Series 2007A Bonds and the Series 2007B Bonds. "Replacement Bonds" means Bonds issued to the beneficial owners of the Bonds in accordance with the Indenture. "Rule" means Rule 15c2 -12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "Securities Depository" means, initially, The Depository Trust Company, New York, New York, and its successors and assigns. C-7 "Series 2007A Bonds" means the Authority's outstanding Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007A, issued in the original principal amount of $30,265,000. "Series 2007B Bonds" means the means the Authority's outstanding Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007B, issued in the original principal amount of $10,000,000. "Series 2011A Bonds" means the Authority's Tax Increment Refunding Revenue Bonds (L-385 Levee Project), Series 2011A, issued in the original principal amount of $2,385,000. "Series 2014 Bonds" means the Authority's Tax Increment Refunding Revenue Bonds (L-385 Project), Series 2014, issued in the original principal amount of $7,640,000. "Series 2017 Bonds" means the Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017, aggregating the principal amount of $18,370,000, issued pursuant to the Indenture. "Series 2017 Levee District Bonds" means the Levee District Improvement Refunding Revenue Bonds (L-385 Project), Series 2017, issued by the Riverside-Quindaro Bend Levee District of Platte County, Missouri in the original aggregate principal amount of $12,620,000. "Special Allocation Fund" means the fund where the deposits of Incremental Tax Revenues pledged for Financing Payments are held. "Standard & Poor's" means Standard & Poor's Ratings Services, a Division of The McGraw Hill Companies, Inc., New York, New York, and its successors and assigns, and, if such firm shall be dissolved or liquidated or shall no longer perform the functions of a securities rating service, Standard & Poor's shall be deemed to refer to any other nationally recognized securities rating service designated by the City, with notice to the Authority and the Trustee. "Supplemental Financing Agreement" means any agreement supplemental or amendatory to the Financing Agreement entered into by the Authority and the City pursuant to the Financing Agreement. "Supplemental Indenture" means any indenture supplemental or amendatory to the Indenture entered into by the Authority and the Trustee pursuant to the Indenture. "Tax Compliance Agreement" means the Tax Compliance Agreement dated as of November 1, 2017, among the Authority, the City and the Trustee. "TIF Act" means the Real Property Tax Increment Allocation Redevelopment Act, Sections 99.800-99.865 of the Revised Statutes of Missouri, as amended. "Transaction Documents" means the Indenture, the Bonds, the Financing Agreement, the Official Statement relating to the Bonds, the Continuing Disclosure Agreement, the Tax Compliance Agreement, the Escrow Agreement, the Authorizing Ordinance and any and all other documents or instruments that evidence or are a part of the transactions referred to in the Indenture, the Financing Agreement or the Official Statement or contemplated by the Indenture, the Financing Agreement or the Official Statement; and any and all future renewals and extensions or restatements of, or amendments or supplements to, any of the foregoing; provided, however, that when the words "Transaction Documents" are used in the context of the authorization, execution, delivery, approval or performance of Transaction Documents by a particular party, the same shall mean only those Transaction Documents that provide for or contemplate authorization, execution, delivery, approval or performance by such party. C-8 "Trust Estate" means the Trust Estate described in the Granting Clauses of the Indenture. "Trustee" means UMB Bank, N.A., Kansas City, Missouri, and its successor or successors and any other corporation or association which at any time may be substituted in its place pursuant to and at the time serving as trustee under the Indenture. "Unassigned Authority's Rights" means the Authority's rights to reimbursement and payment of its costs and expenses under the Financing Agreement, its rights of access under the Financing Agreement, its rights to indemnify under the Financing Agreement, its rights to exemption from liability under the Financing Agreement, its rights to receive notices, reports and other statements and its rights to consent to certain matters. [Continues on following page] C-9 SUMMARY OF THE INDENTURE The following is a summary of certain provisions contained in the Indenture. The following is not a comprehensive description, however, and is qualified in its entirety by reference to the Indenture for a complete recital of the terms thereof. Trust Estate The Trust Estate created by the Indenture in favor of the Trustee for the benefit and security of the owners of the Bonds consists of: (a) All rights, title and interest of the Authority (including, but not limited to, the right to enforce any of the terms thereof) in, to and under (1) the Financing Agreement, including, without limitation, all Financing Payments and other payments to be received by the Authority and paid by the City under and pursuant to and subject to the provisions of the Financing Agreement (except the Authority's rights to payment of its fees and expenses and to indemnification as set forth in the Financing Agreement and as otherwise expressly set forth therein), and (2) all financing statements or other instruments or documents evidencing, securing or otherwise relating to the use of the proceeds of the Bonds; and (b) All moneys and securities (except moneys and securities held in the Rebate Fund) from time to time held by the Trustee under the terms of the Indenture; and (c) Any and all other property (real, personal or mixed) of every kind and nature from time to time, by delivery or by writing of any kind, pledged, assigned or transferred as and for additional security under the Indenture by the Authority or by anyone in its behalf or with its written consent, to the Trustee, which is thereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms thereof. The Trustee shall hold in trust and administer the Trust Estate, upon the terms and conditions set forth in the Indenture for the equal and pro rata benefit and security of each and every owner of Bonds, without preference, priority or distinction as to participation in the lien, benefit and protection of the Indenture of one Bond over or from the others, except as otherwise expressly provided therein. Authorization of Additional Bonds Additional Bonds may be issued under and equally and ratably secured by the Indenture on a parity (except as otherwise provided in the Indenture) with the Series 2017 Bonds and any other Additional Bonds at any time and from time to time, upon compliance with the conditions set forth in the Indenture and in the Financing Agreement, for any purpose authorized under the Act. Before any Additional Bonds are issued under the provisions of the Indenture, the Authority shall adopt a resolution (1) authorizing the issuance of such Additional Bonds, fixing the principal amount thereof and describing the purpose or purposes for which such Additional Bonds are being issued, (2) authorizing the Authority to enter into a Supplemental Indenture for the purpose of issuing such Additional Bonds and establishing the terms and provisions of such series of Bonds and the form of the Bonds of such series, (3) authorizing the Authority to enter into a Supplemental Financing Agreement with the City to provide for payments, which may be subject to annual appropriation, at least sufficient to pay the principal of, redemption premium, if any, and interest on the Bonds then to be Outstanding (including the Additional Bonds to be issued) as the same become due, and to extend the term of the Financing Agreement if the maturity of any of the Additional Bonds would otherwise occur after the expiration of the term of the Financing Agreement, and C-10 (4) providing for such other matters as are appropriate because of the issuance of the Additional Bonds, which matters, in the judgment of the Authority, are not prejudicial to the Authority or the owners of the Bonds previously issued. Such Additional Bonds shall have the same general title as the Series 2017 Bonds, except for an identifying project, series or date, and shall be dated, shall mature on such dates, shall be numbered, shall bear interest at such rates not exceeding the maximum rate then permitted by law payable at such times, and shall be redeemable at such times and prices (subject to the provisions of the Indenture), all as provided by the Supplemental Indenture authorizing the issuance of such Additional Bonds. Except as to any difference in the date, the maturities, the rates of interest or the provisions for redemption, such Additional Bonds shall be on a parity with and shall be entitled to the same benefit and security of the Indenture as the Series 2017 Bonds and any other Additional Bonds, provided that any Additional Bonds shall not be entitled to the benefit of the Series 2017 Debt Service Reserve Fund. Such Additional Bonds shall be executed in the manner set forth in the Indenture and shall be deposited with the Trustee for authentication, but prior to or simultaneously with the authentication and delivery of such Additional Bonds by the Trustee, and as a condition precedent thereto, there shall be filed with the Trustee the following: (a) A copy, certified by the Secretary or Assistant Secretary of the Authority, of the resolution adopted by the Authority authorizing the issuance of such Additional Bonds and the execution of the Supplemental Indenture, Supplemental Financing Agreement and supplements to any other Transaction Documents as may be necessary. (b) A copy, certified by the City Clerk of the ordinances and/or resolutions adopted by the City authorizing the execution and delivery of the Supplemental Financing Agreement and supplements to any other Transaction Documents. (c) An original executed counterpart of the Supplemental Indenture, executed by the Authority and the Trustee, authorizing the issuance of the Additional Bonds being issued, specifying, among other things, the terms thereof, and providing for the disposition of the proceeds of such Additional Bonds and the Supplemental Financing Agreement. (d) An original executed counterpart of the Supplemental Financing Agreement, executed by the City and the Authority, specifying, among other things, the principal amount, rate of interest, maturity and terms of optional prepayment. (e) An Officer's Certificate (1) staring that no event of default under the Financing Agreement has occurred and is continuing and that no event has occurred and is continuing which with the lapse of time or giving of notice, or both, would constitute such an event of default, and (2) stating the purpose or purposes for which such Additional Bonds are being issued and accompanied by the certificates, reports or opinions demonstrating compliance with the applicable tests set forth in the Financing Agreement. (f) A request and authorization to the Trustee, on behalf of the Authority, executed by a City Representative, to authenticate the Additional Bonds and deliver said Additional Bonds to the purchasers therein identified upon payment to the Trustee, for the account of the Authority, of the purchase price thereof. The Trustee shall be entitled to rely conclusively upon such request and authorization as to the names of the purchasers and the amounts of such purchase price. (g) If such Additional Bonds are to be insured or guaranteed by a bond insurer or other credit enhancer, an insurance policy or other credit enhancement in each case in form or substance satisfactory to the Authority, the City and the Trustee. C-11 (h) An Opinion of Bond Counsel to the effect that all requirements for the issuance of such Additional Bonds have been met and the issuance of such Additional Bonds will not result in the interest on any Bonds then Outstanding becoming includible in gross income for purposes of federal income taxation. (i) Such other certificates, statements, receipts and documents required by any of the Transaction Documents or as the Authority, the City or the Trustee shall reasonably require for the delivery of the Additional Bonds. When the documents specified above have been filed with the Trustee, and when such Additional Bonds have been executed and authenticated as required by the Indenture, the Trustee shall deliver such Additional Bonds to or upon the order of the purchasers thereof, but only upon payment to the Trustee of the purchase price of such Additional Bonds. The proceeds of the sale of such Additional Bonds, including accrued interest and premium thereon, if any, shall be immediately paid over to the Trustee and shall be deposited and applied by the Trustee as provided in the Indenture and in the Supplemental Indenture authorizing the issuance of such Additional Bonds. Creation of Funds and Accounts The Indenture creates and establishes in the custody of the Trustee the following special trust funds in the name of the Authority to be designated as follows: (a) "The Industrial Development Authority of the City of Riverside, Missouri—Riverside Horizons Project Costs of Issuance Fund" (the "Costs of Issuance Fund"), and within such fund separate accounts for each Series of Bonds, initially a "Series 2017 Costs of Issuance Account;" (b) "The Industrial Development Authority of the City of Riverside, Missouri—Riverside Horizons Project Debt Service Fund" (the "Debt Service Fund") and within such fund separate accounts for each Series of Bonds, initially a "Series 2017 Debt Service Account," and within each such account a subaccount for capitalized interest on such Series, if any; (c) The "The Industrial Development Authority of the City of Riverside, Missouri— Riverside Horizons Project Series 2017 Debt Service Reserve Fund" (the "Series 2017 Debt Service Reserve Fund"); and (d) "The Industrial Development Authority of the City of Riverside, Missouri—Riverside Horizons Project Rebate Fund" (the "Rebate Fund") and within such fund separate accounts for each Series of Bonds, initially a "Series 2075 Rebate Account." In addition, the Escrow Agreement establishes the Escrow Fund to be held and administered by the Escrow Agent in accordance with the provisions of the Escrow Agreement. Debt Service Fund The Trustee shall deposit and credit to the Debt Service Fund, as and when received, as follows: (a) The amounts required to be deposited therein under the Indenture, and all Financing Payments made by the City pursuant to the Financing Agreement; (b) Interest earnings and other income on Permitted Investments required to be deposited in the Debt Service Fund pursuant to the Indenture; C-12 (c) Any amounts required by a Supplemental Indenture authorizing the issuance of Additional Bonds to be deposited in the Debt Service Fund, as specified in such Supplemental Indenture; and (d) All other moneys received by the Trustee under and pursuant to any of the provisions of the Indenture or the Financing Agreement or any other Transaction Document, when accompanied by directions from the person depositing such moneys that such moneys are to be paid into the Debt Service Fund. Debt Service Reserve Fund The Trustee shall deposit into the Series 2017 Debt Service Reserve Fund, as and when received: (1) From the proceeds from the sale of the Series 2017 Bonds, an amount equal to the Series 2017 Debt Service Reserve Fund Requirement. (2) The amounts to be paid by the City pursuant to the Financing Agreement. (3) The earnings accrued on the investment of moneys in the Series 2017 Debt Service Reserve Fund and required to be deposited into the Series 2017 Debt Service Reserve Fund pursuant to the Indenture. (4) All other moneys received by the Trustee when accompanied by directions from the person depositing such moneys that such moneys are to be paid into the Series 2017 Debt Service Reserve Fund. (5) Moneys from the Sales Proceeds Account as described in the Indenture. Rebate Fund There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Tax Compliance Agreement. All amounts on deposit at any time in the Rebate Fund shall be held by the Trustee in trust to the extent required to pay rebatable arbitrage to the United States of America, and neither the City, the Authority nor the owner of any Bonds shall have any rights in or claim to such money. All amounts held in the Rebate Fund shall be governed by the Indenture and by the Tax Compliance Agreement (which are incorporated therein by reference). Investment of Moneys Moneys held in each of the funds and accounts under the Indenture shall, pursuant to written directions of the City Representative, or in the absence of such direction at the discretion of the Trustee, be invested and reinvested by the Trustee in accordance with the provisions of the Indenture and the Tax Compliance Agreement in Permitted Investments which mature or are subject to redemption by the owner thereof prior to the date such funds are expected to be needed. The Trustee may make any investments permitted by the provisions of the Indenture through its own bond department or short-term investment department or that of any affiliate of the Trustee and may pool moneys for investment purposes, except moneys held in any fund or account that are required to be yield restricted in accordance with the Tax Compliance Agreement, which shall be invested separately. Any such Permitted Investments shall be held by or under the control of the Trustee and shall be deemed at all times a part of the fund or account in which such moneys are originally held. The interest accruing on each fund or account and any profit realized from such Permitted Investments (other than any amount required to be deposited in the Rebate Fund pursuant to the Indenture) shall be credited to such fund or account, and any loss resulting from such Permitted Investments shall be charged to such fund or account; provided that if the most recent valuation of the amount invested in C-13 the Series 2017 Debt Service Reserve Fund equals or exceeds the Series 2017 Debt Service Reserve Requirement then all interest accruing thereon shall be automatically deposited into the Debt Service Fund. The Trustee shall sell or present for redemption and reduce to cash a sufficient amount of such Permitted Investments whenever it shall be necessary to provide moneys in any fund or account for the purposes of such fund or account and the Trustee shall not be liable for any loss resulting from such investments. In determining the balance in any Fund (other than the Series 2017 Debt Service Reserve Fund), investments in such Fund shall be valued at the lower of their original cost or their fair market value as of the most recent interest payment date. Permitted Investments in the Series 2017 Debt Service Reserve Fund shall be valued at fair market value, exclusive of accrued interest. Investments in the Funds under this Indenture shall be valued on each May 1 and November 1 in each year beginning May 1, 2018. Events of Default The term f°event of default," wherever used in the Indenture, means any one of the following events (whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) default in the payment of any interest on any Bond when such interest becomes due and payable; or (b) default in the payment of the principal of (or premium, if any, on) any Bond when the same becomes due and payable (whether at maturity, upon proceedings for redemption, by acceleration or otherwise); or (c) default in the performance, or breach, of any covenant or agreement of the Authority in the Indenture (other than a covenant or agreement a default in the performance or breach of which is specifically dealt with elsewhere in the Indenture), and continuance of such default or breach for a period of 60 days after there has been given to the Authority and the City by the Trustee or to the Authority and the City and the Trustee by the owners of at least 10% in principal amount of the Bonds Outstanding, a written notice specifying such default or breach and requiring it to be remedied; provided, that if such default cannot be fully remedied within such 60 -day period, but can reasonably be expected to be fully remedied, such default shall not constitute an event of default if the Authority shall immediately upon receipt of such notice commence the curing of such default and shall thereafter prosecute and complete the same with due diligence and dispatch; or (d) any event of default under the Financing Agreement shall occur and is continuing and has not been waived. With regard to any alleged default concerning which notice is given to the City under the provisions of the Indenture, the Authority thereby grants the City full authority for the account of the Authority to perform any covenant or obligation, the nonperformance of which is alleged in said notice to constitute a default, in the name and stead of the Authority, with full power to do any and all things and acts to the same extent that the Authority could do and perform any such things and acts in order to remedy such default. Acceleration of Maturity; Rescission and Annulment If an event of default occurs and is continuing, the Trustee may, and shall, if requested by the owners of not less than 25% in principal amount of the Bonds Outstanding, by written notice to the Authority and the City, declare the principal of all Bonds Outstanding and the interest accrued thereon to be due and payable, and upon any such declaration such principal and interest shall become immediately due and payable. C-14 At any time after such a declaration of acceleration has been made, but before any judgment or decree for payment of money due on any Bonds has been obtained by the Trustee as provided in the Indenture, the owners of a majority in principal amount of the Bonds Outstanding may, by written notice to the Authority, the City and the Trustee, rescind and annul such declaration and its consequences if: (a) the Authority has deposited with the Trustee a sum sufficient to pay (1) all overdue installments of interest on all Bonds, (2) the principal of (and premium, if any, on) any Bonds which have become due otherwise than by such declaration of acceleration and interest thereon at the rate prescribed therefor in the Bonds, (3) interest upon overdue installments of interest at the rate prescribed therefor in the Bonds, and (4) all sums paid or advanced by the Trustee thereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (b) all events of default, other than the non-payment of the principal of Bonds which have become due solely by such declaration of acceleration, have been cured or have been waived as provided in the Indenture. No such rescission and annulment shall affect any subsequent default or impair any right consequent thereon. Exercise of Remedies by the Trustee Upon the occurrence and continuance of any event of default under this Indenture, unless the same is waived as provided in this Indenture, the Trustee shall have the following rights and remedies, in addition to any other rights and remedies provided under this Indenture or by law: (a) Right to Bring Suit, Etc. The Trustee may pursue any available remedy at law or in equity by suit, action, mandamus or other proceeding to enforce the payment of the principal of, premium, if any, and interest on the Bonds Outstanding, including interest on overdue principal (and premium, if any) and on overdue installments of interest, and any other sums due under this Indenture, to realize on or to foreclose any of its interests or liens under this Indenture or any other Transaction Document, to enforce and compel the performance of the duties and obligations of the Authority as set forth in this Indenture and to enforce or preserve any other rights or interests of the Trustee under this Indenture with respect to any of the Trust Estate or otherwise existing at law or in equity. (b) Exercise of Remedies at Direction of Bondowners. If requested in writing to do so by the owners of not less than 25% in principal amount of Bonds Outstanding and if indemnified as provided in Section 802(e) of this Indenture, the Trustee shall be obligated to exercise such one or more of the rights and remedies conferred by this Article as the Trustee shall deem most expedient in the interests of the Bondowners. (c) Appointment of Receiver. Upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Bondowners under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the C-15 Trust Estate, pending such proceedings, with such powers as the court making such appointment shall confer. (d) Suits to Protect the Trust Estate. The Trustee shall have power to institute and to maintain such proceedings as it may deem expedient to prevent any impairment of the Trust Estate by any acts which may be unlawful or in violation of this Indenture and to protect its interests and the interests of the Bondowners in the Trust Estate, including power to institute and maintain proceedings to restrain the enforcement of or compliance with any governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement of or compliance with such enactment, rule or order would impair the security under this Indenture or be prejudicial to the interests of the Bondowners or the Trustee, or to intervene (subject to the approval of a court of competent jurisdiction) on behalf of the Bondowners in any judicial proceeding to which the Authority or the City is a party and which in the judgment of the Trustee has a substantial bearing on the interests of the Bondowners. (e) Enforcement Without Possession of Bonds. All rights of action under this Indenture or any of the Bonds may be enforced and prosecuted by the Trustee without the possession of any of the Bonds or the production thereof in any suit or other proceeding relating thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust. Any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and subject to the provisions of Section 707 hereof, be for the equal and ratable benefit of the owners of the Bonds in respect of which such judgment has been recovered. (f) Restoration of Positions. If the Trustee or any Bondowner has instituted any proceeding to enforce any right or remedy under this Indenture by suit, foreclosure, the appointment of a receiver, or otherwise, and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Bondowner, then and in every case the Authority, the City, the Trustee and the Bondowners shall, subject to any determination in such proceeding, be restored to their former positions and rights under this Indenture, and thereafter all rights and remedies of the Trustee and the Bondowners shall continue as though no such proceeding had been instituted. Limitation on Suits by Bondowners No owner of any Bond shall have any right to institute any proceeding, judicial or otherwise, under or with respect to the Indenture, or for the appointment of a receiver or trustee or for any other remedy under the Indenture, unless: (a) such owner has previously given written notice to the Trustee of a continuing event of default; (b) the owners of not less than 25% in principal amount of the Bonds Outstanding shall have made written request to the Trustee to institute proceedings in respect of such event of default in its own name as Trustee under the Indenture; (c) such owner or owners have offered to the Trustee indemnity as provided in the Indenture against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and C-16 (e) no direction inconsistent with such written request has been given to the Trustee during such 60 -day period by the owners of a majority in principal amount of the Outstanding Bonds; it being understood and intended that no one or more owners of Bonds shall have any right in any manner whatever by virtue of, or by availing of, any provision of the Indenture to affect, disturb or prejudice the lien of the Indenture or the rights of any other owners of Bonds, or to obtain or to seek to obtain priority or preference over any other owners or to enforce any right under the Indenture, except in the manner therein provided and for the equal and ratable benefit of all Outstanding Bonds. Notwithstanding the foregoing or any other provision in the Indenture, however, the owner of any Bond shall have the right which is absolute and unconditional to receive payment of the principal of (and premium, if any) and interest on such Bond on the respective stated maturities expressed in such Bond (or, in the case of redemption, on the redemption date) and nothing contained in the Indenture shall affect or impair the right of any owner to institute suit for the enforcement of any such payment. Control of Proceedings by Bondowners The owners of a majority in principal amount of the Bonds Outstanding shall have the right, during the continuance of an event of default, provided indemnity has been provided to the Trustee in accordance with the Indenture: (a) to require the Trustee to proceed to enforce the Indenture, either by judicial proceedings for the enforcement of the payment of the Bonds and the foreclosure of the Indenture, or otherwise; and (b) to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under the Indenture, provided that (1) such direction shall not be in conflict with any rule of law or the Indenture, (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, and (3) the Trustee shall not determine that the action so directed would be unjustly preiudicial to the owners not taking part in such direction. Application of Moneys Collected Any moneys collected by the Trustee pursuant to the Indenture (after the deductions for payment of costs and expenses of proceedings resulting in the collection of such moneys) together with any other sums then held by the Trustee as part of the Trust Estate, shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Bonds and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: (a) First: To the payment of all unpaid amounts due the Trustee under the Indenture; (b) Second: To the payment of the whole amount then due and unpaid upon the Outstanding Bonds for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected, with interest (to the extent that such interest has been collected by the Trustee or a sum sufficient therefor has been so collected and payment thereof is legally enforceable at the respective rate or rates prescribed therefor in the Bonds) on overdue C-17 principal (and premium, if any) and on overdue installments of interest; and in case such proceeds shall be insufficient to pay in full the whole amount so due and unpaid upon such Bonds, then to the payment of such principal and interest, without any preference or priority, ratably according to the aggregate amount so due; and (c) Third: To the payment of the remainder, if any, to the Authority or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct. Whenever moneys are to be applied by the Trustee pursuant to the provisions of the Indenture, such moneys shall be applied by it at such times, and from time to time, as the Trustee shall determine, having due regard for the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such moneys, it shall fix the date (which shall be an interest payment date unless it shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date, in accordance with the Indenture, and shall not be required to make payment to the owner of any unpaid Bond until such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid. Resignation and Removal of Trustee (a) The Trustee may resign at any time by giving written notice thereof to the Authority, the City and each owner of Bonds Outstanding as shown by the list of Bondowners required by the Indenture to be kept at the office of the Trustee. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. (b) If the Trustee has or shall acquire any conflicting interest (as determined by the Trustee), it shall, within 90 days after ascertaining that it has a conflicting interest, or within 30 days after receiving written notice from the Authority or the City (so long as the City is not in default under the Financing Agreement) that it has a conflicting interest, either eliminate such conflicting interest or resign in the manner and with the effect specified in subsection (a) above. (c) The Trustee may be removed at any time by an instrument or concurrent instruments in writing delivered to the Authority and the Trustee signed by the owners of a majority in principal amount of the Outstanding Bonds, or, so long as the City is not in default and no condition that with the giving of notice or passage of time, or both, would constitute a default by the City under the Financing Agreement. The Authority, the City or any Bondowner may at any time petition any court of competent jurisdiction for the removal for cause of the Trustee. (d) If at any time: (1) the Trustee shall fail to comply with subsection (b) after written request therefor by the Authority or the City, or (2) the Trustee shall cease to be eligible under the Indenture and shall fail to resign after written request therefor by the Authority or by any Bondowner, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, C-18 then, in any such case, (A) the Authority may remove the Trustee, or (B) the City or any Bondowner may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (e) The Trustee shall give notice at the expense of the City of each resignation and each removal of the Trustee and each appointment of a successor Trustee by mailing written notice of such event by first- class mail, postage prepaid, to the Authority, the City and the registered owners of Bonds as their names and addresses appear in the bond register maintained by the Trustee. Each notice shall include the name of the successor Trustee and the address of its principal corporate trust office. (f) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to the Indenture shall become effective until the acceptance of appointment by the successor Trustee under the Indenture. Appointment of Successor Trustee If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Authority, with the written consent of the City if no event of default under the Financing Agreement has occurred and is continuing (which consent shall not be unreasonably withheld), or the owners of a majority in principal amount of Bonds Outstanding (if an event of default thereunder or under the Financing Agreement has occurred and is continuing), by an instrument or concurrent instruments in writing delivered to the Authority and the retiring Trustee, shall promptly appoint a successor Trustee. In case all or substantially all of the Trust Estate shall be in the possession of a receiver or trustee lawfully appointed, such receiver or trustee, by written instrument, may similarly appoint a temporary successor to fill such vacancy until a new Trustee shall be so appointed by the Authority or the Bondowners. If, within 30 days after such resignation, removal or incapability or the occurrence of such vacancy, a successor Trustee shall be appointed in the manner therein provided, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the retiring Trustee and any temporary successor Trustee appointed by such receiver or trustee. If no successor Trustee shall have been so appointed and accepted appointment in the manner therein provided, any Bondowner may petition any court of competent jurisdiction for the appointment of a successor Trustee, until a successor shall have been appointed as above provided. The successor so appointed by such court shall immediately and without further act be superseded by any successor appointed as above provided. Every such successor Trustee appointed pursuant to the provisions of the Indenture shall be a bank or trust company in good standing under the law of the jurisdiction in which it was created and by which it exists, meeting the eligibility requirements of the Indenture. Supplemental Indentures without Consent of Bondowners Without the consent of the owners of any Bonds, the Authority and the Trustee may from time to time enter into one or more Supplemental Indentures for any of the following purposes: (a) to correct or amplify the description of any property at any time subject to the lien of the Indenture, or better to assure, convey and conium unto the Trustee any property subject or required to be subjected to the lien of the Indenture, or to subject to the lien of the Indenture additional property; or (b) to add to the conditions, limitations and restrictions on the authorized amount, terms or purposes of issue, authentication and delivery of Bonds or of any series of Bonds, as therein set forth, additional conditions, limitations and restrictions thereafter to be observed; or (c) to authorize the issuance of any series of Additional Bonds and make such other provisions as provided in the Indenture; or C-19 (d) to evidence the appointment of a separate trustee or the succession of a new trustee under the Indenture; or (e) to add to the covenants of the Authority or to the rights, powers and remedies of the Trustee for the benefit of the owners of all Bonds or to surrender any right or power therein conferred upon the Authority; or (f) to cure any ambiguity, to correct or supplement any provision in the Indenture which may be inconsistent with any other provision therein or to make any other change, with respect to matters or questions arising under the Indenture, which shall not be inconsistent with the provisions of the Indenture, provided such action shall not materially adversely affect the interests of the owners of the Bonds; or (g) to modify, eliminate or add to the provisions of the Indenture to such extent as shall be necessary to effect the qualification of the Indenture under the Trust Indenture Act of 1939, as amended, or under any similar federal statute thereafter enacted, or to permit the qualification of the Bonds for sale under the securities laws of the United States or any state of the United States. Supplemental Indentures with Consent of Bondowners With the consent of the owners of not less than a majority in principal amount of the Bonds then Outstanding affected by such Supplemental Indenture, the Authority and the Trustee may enter into one or more Supplemental Indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of modifying in any manner the rights of the owners of the Bonds under the Indenture; provided, however, that no such Supplemental Indenture shall, without the consent of the owner of each Outstanding Bond affected thereby, (a) change the stated maturity of the principal of, or any installment of interest on, any Bond, or reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or change any place of payment where (except as may be required in connection with the appointment of a successor Trustee), or the coin or currency in which, any Bond, or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the stated maturity thereof (or, in the case of redemption, on or after the redemption date); or (b) reduce the percentage in principal amount of the Outstanding Bonds, the consent of whose owners is required for any such Supplemental Indenture, or the consent of whose owners is required for any waiver provided for in the Indenture of compliance with certain provisions of the Indenture or certain defaults thereunder and their consequences; or (c) modify the obligation of the Authority to make payment on or provide funds for the payment of any Bond; or (d) modify any of the provisions of the Indenture, except to increase any percentage provided thereby or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the owner of each Bond affected thereby; or (e) permit the creation of any lien ranking prior to or, except with respect to any Additional Bonds, on a parity with the lien of the Indenture with respect to any of the Trust Estate or terminate the lien of the Indenture on any property at any time subject thereto or deprive the owner of any Bond of the security afforded by the lien of the Indenture. C-20 The Trustee may in its discretion determine whether or not any Bonds would be affected by any Supplemental Indenture and any such determination shall be conclusive upon the owners of all Bonds, whether theretofore or thereafter authenticated and delivered thereunder. The Trustee shall not be liable for any such determination made in good faith. It shall not be necessary for the required percentage of owners of Bonds under the Indenture to approve the particular form of any proposed Supplemental Indenture, but it shall be sufficient if such act shall approve the substance thereof. Payment, Discharge and Defeasance of Bonds Bonds will be deemed to be paid and discharged and no longer Outstanding under the Indenture and will cease to be entitled to any lien, benefit or security of the Indenture if the Authority shall pay or provide for the payment of such Bonds in any one or more of the following ways: (a) by paying or causing to be paid the principal of (including redemption premium, if any) and interest on such Bonds, as and when the same become due and payable; (b) by delivering such Bonds to the Trustee for cancellation; or (c) by depositing in trust with the Trustee or other Paying Agent moneys and Defeasance Obligations in an amount, together with the income or increment to accrue thereon, without consideration of any reinvestment thereof, sufficient to pay or redeem (when redeemable) and discharge the indebtedness on such Bonds at or before their respective maturity or redemption dates (including the payment of the principal of, premium, if any, and interest payable on such Bonds to the maturity or redemption date thereof); provided that, if any such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption is given in accordance with the requirements of the Indenture or provision satisfactory to the Trustee is made for the giving of such notice. The Bonds may be defeased in advance of their maturity or redemption dates only with cash or Defeasance Obligations pursuant to subsection (c) above, subject to receipt by the Trustee of (1) a verification report in form and substance satisfactory to the Trustee prepared by independent certified public accountants, or other verification agent, satisfactory to the Trustee and (2) an Opinion of Bond Counsel addressed and delivered to the Trustee and the Authority in form and substance satisfactory to the Trustee to the effect that the payment of the principal of and redemption premium, if any, and interest on all of the Bonds then Outstanding and any and all other amounts required to be paid under the provisions of the Indenture has been provided for in the manner set forth in the Indenture and to the effect that so providing for the payment of any Bonds will not cause the interest on the Bonds to be included in gross income for federal income tax purposes, notwithstanding the satisfaction and discharge of the Indenture. The foregoing notwithstanding, the liability of the Authority in respect of such Bonds shall continue, but the owners thereof shall thereafter be entitled to payment only out of the moneys and Defeasance Obligations deposited with the Trustee as aforesaid. Moneys and Defeasance Obligations so deposited with the Trustee pursuant to the Indenture shall not be a part of the Trust Estate but shall constitute a separate trust fund for the benefit of the Persons entitled thereto. Such moneys and Defeasance Obligations shall be applied by the Trustee to the payment (either directly or through any Paying Agent, as the Trustee may determine) to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such moneys and Defeasance Obligations have been deposited with the Trustee. C-21 Satisfaction and Discharge of Indenture The Indenture and the lien, rights and interests created by the Indenture shall cease, determine and become null and void (except as to any surviving rights pursuant to the Indenture) if the following conditions are met: (a) the principal of, premium, if any, and interest on all Bonds has been paid or is deemed to be paid and discharged by meeting the conditions of the Indenture; (b) all other sums payable under the Indenture with respect to the Bonds are paid or provision satisfactory to the Trustee is made for such payment; (c) the Trustee receives an Opinion of Bond Counsel (which may be based upon a ruling or rulings of the Internal Revenue Service) to the effect that so providing for the payment of any Bonds will not cause the interest on the Bonds to be included in gross income for federal income tax purposes, notwithstanding the satisfaction and discharge of the Indenture; (d) the Trustee receives an Opinion of Counsel to the effect that all conditions precedent in the Indenture to the satisfaction and discharge of the Indenture have been complied with; and (e) if such Bonds are to be redeemed or final payment is to occur on a date which is more than 90 days from the date of the deposit under the Indenture, the Authority and the City shall have received (1) the report of a verification agent acceptable to and addressed to each of them, confirming the mathematical accuracy of the calculations used to determine the sufficiency of the moneys or Defeasance Obligations; and (2) the escrow deposit agreement Thereupon, the Trustee shall execute and deliver to the Authority a termination statement and such instruments of satisfaction and discharge of the Indenture as may be necessary at the written request of the Authority, and shall pay, assign, transfer and deliver to the Authority, or other Persons entitled thereto, all moneys, securities and other property then held by it under the Indenture as a part of the Trust Estate, other than moneys or Defeasance Obligations held in trust by the Trustee as therein provided for the payment of the principal of, premium, if any, and interest on the Bonds. SUMMARY OF THE FINANCING AGREEMENT The following is a summary of certain provisions contained in the Financing Agreement. The following is not a comprehensive description, however, and is qualified in its entirety by reference to the Financing Agreement for a complete recital of the terms thereof. Amount and Source of the Financing; Issuance of Bonds The Authority agrees to make available to the City, upon the terms and conditions in the Financing Agreement and in the Indenture specified, the net proceeds received by the Authority from the sale of the Series 2017 Bonds (the "Financing"). In order to provide funds for the Financing, to finance the Costs of the Project and to refund the Refunded Bonds, the Authority agrees that it will issue, sell and deliver the Series 2017 Bonds to the Original Purchaser. The proceeds of the sale of the Series 2017 Bonds shall be paid over to the Trustee for the account of the Authority and shall be administered, disbursed and applied to finance the Costs of the Project and refund the Refunded Bonds and other purposes upon the terms and in the manner as provided in the Indenture and in the Financing Agreement. C-22 Financing Payments Subject to the limitations on appropriation set forth in Sections 3.5, 3.7 and 4.1 hereof, the City shall pay the following amounts to the Trustee, all as "Financing Payments" under this Financing Agreement: (a) Debt Service Fund — Interest: On or before the third Business Day preceding each May 1 and November 1, commencing on the third Business Day preceding May 1, 2018, an amount which is not less than the interest to become due on the next interest payment date on the Series 2017 Bonds; provided, however that the City may be entitled to certain credits on such payments as permitted under Section 3.3 of this Financing Agreement; (b) Debt Service Fund — Principal: On or before the third Business Day preceding each May 1, commencing on the third Business Day preceding May 1, 2018, an amount which is not less than the next installment of principal due on the Series 2017 Bonds on the next principal payment date by maturity; provided, however, that the City may be entitled to certain credits on such payments as permitted under Section 3.3 of this Financing Agreement; and Notwithstanding any schedule of payments set forth in this Financing Agreement or the Indenture, the City shall make payments hereunder and shall be liable therefor at the times and in the amounts (including interest, principal, and redemption premium, if any) equal to the amounts to be paid as interest, principal and redemption premium, if any, whether at maturity or by optional or mandatory redemption, as applicable, upon all Bonds from time to time Outstanding under the Indenture. Additional Payments Subject to the limitations of the Financing Agreement, the City shall pay the following amounts to the following persons, all as "Additional Payments" under the Financing Agreement: (a) to the Trustee, when due, all reasonable fees and charges for its services rendered under the Indenture, the Financing Agreement and any other Transaction Documents, and all reasonable expenses (including without limitation reasonable fees and charges of any Paying Agent, bond registrar, counsel, accountant, engineer or other person) incurred in the performance of the duties of the Trustee under the Indenture, the Financing Agreement and any other Transaction Documents for which the Trustee and other persons are entitled to repayment or reimbursement; (b) to the Trustee, upon demand, an amount necessary to pay rebatable arbitrage in accordance with the Tax Compliance Agreement and the Indenture; (c) to the Trustee or the party due, upon written demand all other amounts payable in accordance with the Tax Compliance Agreement; (d) to the Authority, on the Bond Issuance Date, its regular administrative and issuance fees and charges, if any, and all expenses (including without limitation attorneys' fees) incurred by the Authority in relation to the transactions contemplated by the Financing Agreement and the Indenture, which are not otherwise to be paid by the City under the Financing Agreement or the Indenture; (e) to the appropriate person, such payments as are required (i) as payment for or reimbursement of any and all reasonable costs, expenses and liabilities incurred by the Authority or the Trustee or any of them in satisfaction of any obligations of the City under the Financing Agreement that the City does not perform, or incurred in the defense of any action or proceeding with respect to the Well Project, the Financing Agreement or the Indenture, or (ii) as reimbursement for expenses paid, or as prepayment of expenses to be paid, by the Authority or the Trustee and that are C-23 incurred as a result of a request by the City, or a requirement of the Financing Agreement and that the City is not otherwise required to pay under the Financing Agreement; (f) to the Trustee, upon written demand of the Trustee, the amount required by the Indenture, subject to the provisions hereof and of the Indenture, necessary to restore the Series 2017 Debt Service Reserve Fund to an amount equal to the Series 2017 Debt Service Reserve Fund Requirement. If applicable, any Supplemental Financing Agreement shall provide for deposits into the debt service reserve funds) for Additional Bonds of amounts sufficient to maintain such fund(s) as required by the Indenture; (g) to the appropriate person, any other amounts required to be paid by the City under the Financing Agreement or the Indenture; and (h) any past due Additional Payments shall continue as an obligation of the City until they are paid and shall bear interest at the Prime Rate plus 2% during the period such Additional Payments remain unpaid. Annual Appropriations The City intends, on or before the last day of each Fiscal Year, to budget and appropriate, specifically with respect to the Financing Agreement, moneys sufficient to pay all the Financing Payments and reasonably estimated Additional Payments for the next succeeding Fiscal Year. The City shall deliver written notice to the Trustee no later than 15 days after the commencement of its Fiscal Year stating whether or not the Board of Aldermen has appropriated funds sufficient for the purpose of paying the Financing Payments and reasonably estimated Additional Payments to become due during such Fiscal Year. If the Board of Aldermen shall have made the appropriation necessary to pay the Financing Payments and reasonably estimated Additional Payments to become due during such Fiscal Year, the failure of the City to deliver the foregoing notice on or before the 15th day after the commencement of its Fiscal Year shall not constitute an Event of Nonappropriation and, on failure to receive such notice 15 days after the commencement of the City's Fiscal Year, the Trustee shall make independent inquiry of the fact of whether or not such appropriation has been made. If the Board of Aldermen shall not have made the appropriation necessary to pay the Financing Payments and Additional Payments reasonably estimated to become due during such succeeding Fiscal Year, the failure of the City to deliver the foregoing notice on or before the 15'h day after the commencement of its Fiscal Year shall constitute an Event of Nonappropriation. Annual Budget Request The City Administrator or other officer of the City at any time charged with the responsibility of formulating budget proposals shall include in the budget proposals submitted to the Board of Aldermen, in each Fiscal Year in which the Financing Agreement shall be in effect, an appropriation for all the Financing Payments and reasonable estimated Additional Payments required for the ensuing Fiscal Year; it being the intention of the City that the decision to appropriate or not to appropriate under the Financing Agreement shall be made solely by the Board of Aldermen and not by any other official of the City. The City intends, subject to the provisions above respecting the failure of the City to budget or appropriate funds to make Financing Payments and Additional Payments, to pay the Financing Payments and Additional Payments thereunder. The City reasonably believes that legally available funds in an amount sufficient to make all Financing Payments and Additional Payments during each Fiscal Year can be obtained. The City further intends to do all things lawfully within its power to obtain and maintain funds from which the Financing Payments and Additional Payments may be made, including making provision for such Financing Payments and Additional Payments to the extent necessary in each proposed annual budget submitted for approval in accordance with applicable procedures of the City and to exhaust all available reviews and appeals in the event such portion of the budget is not approved. The City's Director of Finance is directed to do all things lawfully within such person's power to obtain and maintain funds from which the Financing Payments and Additional Payments may be C-24 paid, including making provision for such Financing Payments and Additional Payments to the extent necessary in each proposed annual budget submitted for approval or by supplemental appropriation in accordance with applicable procedures of the City and to exhaust all available reviews and appeals in the event such portion of the budget or supplemental appropriation is not approved. Notwithstanding the foregoing, the decision to budget and appropriate funds is to be made in accordance with the City's normal procedures for such decisions. Financing Payments to Constitute Current Expenses of the City Except as provided in the Financing Agreement, the Authority and the City acknowledge and agree that the Financing Payments and Additional Payments under the Financing Agreement shall constitute currently budgeted expenditures of the City, and shall not in any way be construed or interpreted as creating a liability or a general obligation or debt of the City in contravention of any applicable constitutional or statutory limitations or requirements concerning the creation of indebtedness by the City, nor shall anything contained in the Financing Agreement constitute a pledge of the general credit, tax revenues, funds or moneys of the City. The City's obligations to pay Financing Payments and Additional Payments under the Financing Agreement shall be from year to year only, and shall not constitute a mandatory payment obligation of the City in any ensuing Fiscal Year beyond the then current Fiscal Year. Neither the Financing Agreement nor the issuance of the Series 2017 Bonds shall directly or indirectly obligate the City to levy or pledge any form of taxation or make any appropriation or make any payments beyond those appropriated for the City's then current Fiscal Year, but in each Fiscal Year Financing Payments and Additional Payments shall be payable solely from the amounts budgeted or appropriated therefor out of the income and revenue provided for such year, plus any unencumbered balances from previous years; provided, however, that nothing in the Financing Agreement shall be construed to limit the rights of the Owners of the Series 2017 Bonds or the Trustee to receive any amounts which may be realized from the Trust Estate pursuant to the Indenture. Failure of the City to budget and appropriate said moneys on or before the last day of any Fiscal Year shall be deemed an Event of Nonappropriation. Security for the Financing The City's obligations to pay the Financing Payments and Additional Payments described in the Financing Agreement and any amounts required to be paid under the Financing Agreement, as applicable, shall be limited, special obligations of the City payable solely from, and secured as to the payment of principal and interest by, (i) subject to annual appropriation by the City as provided in the Financing Agreement, a pledge of all legally available revenues of the City and (ii) on a subordinate basis, amounts in the Special Allocation Fund as defined in the Redevelopment Plan, in each case as provided in the Authorizing Ordinance. The taxing power of the City is not pledged to the payment of the Financing Payments or Additional Payments either as to principal or interest. The City's obligation to pay the Financing Payments and Additional Payments shall not constitute general obligations of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional or statutory provision, limitation or restriction. Notwithstanding the foregoing, the Incremental Tax Revenues derived from the Redevelopment Area deposited into the Special Allocation Fund are pledged by the City pursuant to the Authorizing Ordinance to secure the Financing Payments and Additional Payments, which pledge is subordinate to the pledge of such revenues securing the Series 2011A Bonds, the Series 2014 Bonds, the Series 2017 Levee District Bonds and any additional bonds issued under the respective trust indentures related to such bonds (together, the "Senior Obligations"). The "Incremental Tax Revenues" consist of (a) PILOTS derived from the Redevelopment Area, (b) subject to annual appropriation by the City, Economic Activity Tax Revenues received by the City with respect to the Redevelopment Area and (c) the New State Revenues received by the City with respect to the Redevelopment Area. Any moneys and securities in the Special Allocation Fund not required to pay debt service on the Senior Obligations in any year may be used by the City for Financing Payments and Additional Payments. C-25 Additional Bonds The Authority from time to time may, in its sole discretion, at the written request of the City, authorize the issuance of Additional Bonds for the purposes and upon the terms and conditions provided in the Indenture; provided that (1) the terms of such Additional Bonds, the purchase price to be paid therefor and the manner in which the proceeds thereof are to be disbursed shall have been approved by resolutions adopted by the Authority and the City; (2) the Authority and the City shall have entered into a Supplemental Financing Agreement to acknowledge that Financing Payments are revised to the extent necessary to provide for the payment of the principal of, redemption premium, if any, and interest on the Additional Bonds and to extend the term of the Financing Agreement if the maturity of any of the Additional Bonds would otherwise occur after the expiration of the term of the Financing Agreement; and (3) the Authority and the City shall have otherwise complied with the provisions of the Financing Agreement and the Indenture with respect to the issuance of such Additional Bonds. Events of Default Defined The term "Event of Default" or "Default" shall mean any one or more of the following events: (a) Failure by the City to make timely payment of any Financing Payment. (b) Failure by the City to make any Additional Payment when due and, after notice of such failure, the City shall have failed to make such payment within 10 days following the due date. (c) Failure by the City to observe and perform any covenant, condition or agreement on the part of the City under the Financing Agreement or the Indenture, other than as referred to in the preceding subparagraphs (a) and (b), for a period of 30 days after written notice of such default has been given to the City by the Trustee or the Authority during which time such default is neither cured by the City nor waived in writing by the Trustee and the Authority, provided that, if the failure stated in the notice cannot be corrected within said 30 -day period, the Trustee and the Authority may consent in writing to an extension of such time prior to its expiration and the Trustee and the Authority will not unreasonably withhold their consent to such an extension if corrective action is instituted by the City within the 30 -day period and diligently pursued to completion and if such consent, in their judgment, does not materially adversely affect the interests of the Bondowners. (d) Any representation or warranty by the City in the Financing Agreement or in any certificate or other instrument delivered under or pursuant to the Financing Agreement or the Indenture or in connection with the financing of the Well Project shall prove to have been false, incorrect, misleading or breached in any material respect on the date when made, unless waived in writing by the Authority and the Trustee or cured by the City, if such representation or warranty can be cured to the satisfaction of the Authority and the Trustee within 30 days after notice thereof has been given to the City. Remedies on Default Subject to the provisions of the Financing Agreement, whenever any Event of Default shall have occurred and be continuing, the Trustee, as the assignee of the Authority, may take any one or more of the following remedial steps; provided that if the principal of all Bonds then Outstanding and the interest accrued thereon shall have been declared immediately due and payable pursuant to the provisions of the Indenture, all Financing Payments for the remainder of the term of the Financing shall become immediately due and payable without any further act or action on the part of the Authority or the Trustee and the Trustee may immediately proceed (subject to the provisions of the Financing Agreement) to take any one or more of the remedial steps set forth in subparagraph (b) below: C-26 (a) By written notice to the City declare the outstanding principal of the Financing Payments to be immediately due and payable, together with interest on overdue payments of principal and redemption premium, if any, and, to the extent permitted by law, interest, at the rate or rates of interest specified in the respective Bonds or the Indenture, without presentment, demand or protest, all of which are expressly waived. (b) Take whatever other action at law or in equity is necessary and appropriate to exercise or to cause the exercise of the rights and powers set forth in the Financing Agreement or in the Indenture, as may appear necessary or desirable to collect the amounts payable pursuant to the Financing Agreement then due and thereafter to become due or to enforce the performance and observance of any obligation, agreement or covenant of the City under the Financing Agreement or the Indenture. In the enforcement of the remedies provided in the Financing Agreement, the Trustee may treat all fees, costs and expenses of enforcement, including reasonable legal, accounting and advertising fees and expenses, as Additional Payments then due and payable by the City. Any amount collected pursuant to action taken under the Financing Agreement shall be paid to the Trustee and applied, first, to the payment of any costs, expenses and fees incurred by the Authority or the Trustee as a result of taking such action and, next, any balance shall be used to satisfy any Financing Payments then due by payment into the Debt Service Fund and applied in accordance with the Indenture and, then, to satisfy any other Additional Payments then due or to cure any other Event of Default. Notwithstanding the foregoing, the Trustee shall not be obligated to take any step that in its opinion will or might cause it to expend time or money or otherwise incur liability, unless and until indemnity satisfactory to it has been furnished to the Trustee at no cost or expense to the Trustee, as provided in the Indenture. The provisions of this Section are subject to the limitation that the annulment of a declaration that the Bonds are immediately due and payable shall automatically constitute an annulment of any corresponding declaration made pursuant to subparagraph (a) of this Section and a waiver and rescission of the consequences of such declaration and of the Event of Default with respect to which such declaration has been made, provided that no such waiver or rescission shall extend to or affect any other or subsequent Default or impair any right consequent thereon. In the event any covenant, condition or agreement contained in the Financing Agreement shall be breached or any Event of Default shall have occurred and such breach or Event of Default shall thereafter be waived by the Trustee, such waiver shall be limited to such particular breach or Event of Default. No Remedy Exclusive Subject to the provisions of the Financing Agreement, no remedy in the Financing Agreement conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under the Financing Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon a Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Trustee to exercise any remedy reserved to it in the Financing Agreement, it shall not be necessary to give any notice, other than such notice as may be therein expressly required. Agreement to Pay Attorneys' Fees and Expenses Subject to the provisions of the Financing Agreement, in connection with any Event of Default by the City, if the Authority or the Trustee employs attorneys or incurs other expenses for the collection of amounts C-27 payable under the Financing Agreement or the enforcement of the performance or observance of any covenants or agreements on the part of the City therein contained, the City agrees that it will, on demand therefor, pay to the Authority and the Trustee the reasonable fees of such attorneys and such other reasonable fees, costs and expenses so incurred by the Authority and the Trustee. Authority and City to Give Notice of Default The Authority and the City shall each, at the expense of the City, promptly give to the Trustee written notice of any Default of which the Authority or the City, as the case may be, shall have actual knowledge or written notice, but the Authority shall not be liable for failing to give such notice. Remedial Rights Assigned to the Trustee Upon the execution and delivery of the Indenture, the Authority will thereby have assigned to the Trustee all rights and remedies conferred upon or reserved to the Authority by the Financing Agreement, reserving only the Unassigned Authority's Rights. The Trustee shall have the exclusive right to exercise such rights and remedies conferred upon or reserved to the Authority by the Financing Agreement in the same manner and to the same extent, but under the limitations and conditions imposed by the Indenture and by the Financing Agreement. The Trustee and the Bondowners shall be deemed third party creditor beneficiaries of all representations, warranties, covenants and agreements contained in the Financing Agreement. Supplemental Financing Agreements without Consent of Bondowners Without the consent of the Owners of any Bonds, the Authority and the City may from time to time enter into one or more Supplemental Financing Agreements, for any of the following purposes: (a) to subject to the Financing Agreement additional property or to more precisely identify any project financed or refinanced out of the proceeds of any series of Bonds, or to substitute or add additional property thereto; or (b) to add to the conditions, limitations and restrictions on the authorized amount, terms or purposes of the Financing, as set forth in the Financing Agreement, additional conditions, limitations and restrictions thereafter to be observed; or (c) in connection with the issuance of any Additional Bonds, to make such other provisions as provided in the Financing Agreement; or (d) to evidence the succession of another entity to the City and the assumption by any such successor of the covenants of the City contained in the Financing Agreement; or (e) to add to the covenants of the City or to the rights, powers and remedies of the Trustee for the benefit of the Owners of all or any series of Bonds or to surrender any right or power in the Financing Agreement conferred upon the City; or (f) to cure any ambiguity, to correct or supplement any provision in the Financing Agreement which may be inconsistent with any other provision in the Financing Agreement or to make any other provisions, with respect to matters or questions arising under the Financing Agreement, which shall not be inconsistent with the provisions of the Financing Agreement, provided such action shall not adversely affect the interests of the Owners of the Bonds. C-28 Supplemental Financing Agreements with Consent of Bondowners With the prior written consent of the Owners of not less than a majority in principal amount of the Bonds then Outstanding affected by such Supplemental Financing Agreement, the Authority and the City may enter into Supplemental Financing Agreements, in form satisfactory to the Trustee, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Financing Agreement or of modifying in any manner the rights of the Trustee and the Owners of the Bonds under the Financing Agreement; provided, however, that no such Supplemental Financing Agreement shall, without the consent of the Owner of each Outstanding Bond affected thereby: (a) change the stated maturity of the principal of, or any installment of interest on, the Financing Payments, or reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or change any place of payment where (except as may be required in connection with the appoint of a successor Trustee), or the coin or currency in which, the Financing Payments are payable, or impair the right to institute suit for the enforcement of any such payment on or after the stated maturity thereof (or, in the case of redemption, on or after the redemption date); or (b) reduce the percentage in principal amount of the Outstanding Bonds, the consent of whose Owners is required for any such Supplemental Financing Agreement, or the consent of whose Owners is required for any waiver provided for in the Financing Agreement of compliance with certain provisions of the Financing Agreement or certain defaults thereunder and their consequences; or (c) modify any of the provisions of this Section, except to increase any percentage provided thereby or to provide that certain other provisions of the Financing Agreement cannot be modified or waived without the consent of the Owner of each Bond affected thereby. The Trustee may in its discretion determine whether or not any Bonds would be affected by any Supplemental Financing Agreement and any such determination shall be conclusive upon the Owners of all Bonds, whether theretofore or thereafter authenticated and delivered under the Indenture. The Trustee shall not be liable for any such determination made in good faith. It shall not be necessary for the required percentage of Owners of Bonds under this Section to approve the particular form of any proposed Supplemental Financing Agreement, but it shall be sufficient if such act shall approve the substance thereof. SUMMARY OF THE AUTHORIZING ORDINANCE The following is a summary of certain provisions contained in the Authorizing Ordinance. The following is not a comprehensive description, however, and is quaked in its entirety by reference to the Authorizing Ordinance for a complete recital of the terms thereof. Limited Obligations Except as otherwise provided in the Authorizing Ordinance, the City's obligation to make Financing Payments and Additional Payments under the Financing Agreement shall be subject to annual appropriation and shall not constitute a debt, liability or indebtedness within the meaning of any constitutional, statutory or charter debt limitation or restriction, all as more fully provided in the Financing Agreement. Notwithstanding any schedule of payments upon the Financing set forth in the Financing Agreement or the Bond Trust Indenture under which the Bonds are issued (the "Indenture"), the City shall make payments upon the Financing and shall be liable therefor at the times and in the amounts (including interest, principal, and C-29 redemption premium, if any) equal to the amounts to be paid as interest, principal and redemption premium, if any, whether at maturity or by optional or mandatory redemption upon all Bonds from time to time outstanding under the Indenture, as further provided in the Financing Agreement.. Security for the Financing (a) Except as provided in the following paragraph, the City's obligation to make Financing Payments and Additional Payments pursuant to the Financing Agreement shall be subject to annual appropriation as provided in the Financing Agreement. Notwithstanding the foregoing, Payments in Lieu of Taxes and New State Revenues deposited into the Special Allocation Fund are not subject to annual appropriation and are pledged by the City pursuant the Authorizing Ordinance to secure the Financing Payments and Additional Payments, however any moneys and securities in the Special Allocation Fund not required to pay debt service on such bonds in any year may be used by the City for other reimbursable project costs pursuant to the Act. The pledge of the Payments in Lieu of Taxes and the New State Revenues is subordinate to the pledge of such revenues securing the Series 2011A Bonds, the Series 2014 Bonds, the Series 2017 Levee District Bonds and any additional bonds issued under the respective Trust Indentures related to such bonds. (b) As additional security for the City's obligation to make Financing Payments and Additional Payments pursuant to the Financing Agreement, such payments shall be payable from and secured as to the payment of principal and interest by (a) a pledge of the Payments in Lieu of Taxes deposited in the PILOTS Account of the Special Allocation Fund, (b) a pledge of the New State Revenues deposited in the New State Revenues Account of the Special Allocation Fund and (c) subject to annual appropriation by the Board of Aldermen as provided in the Authorizing Ordinance, the Economic Activity Tax Revenues deposited in the Economic Activity Tax Account of the Special Allocation Fund. The taxing power of the City is not pledged to the payment of the Financing either as to principal or interest. The Financing shall not constitute a general obligation of the City, nor shall it constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction. Annual Appropriation of Economic Activity Taxes The City currently intends to appropriate in each year the Economic Activity Tax Revenues in the Special Allocation Fund to the repayment of the Financing. In preparing the City's annual budget the City Administrator or such other office of the City at any time charged with the responsibility of formulating budget proposals shall include or cause to be included in each budget submitted to the Board of Aldermen such appropriation. Notwithstanding the foregoing, the decision of whether or not to appropriate is solely within the discretion of the Board of Aldermen. In the event the Board of Aldermen votes to not appropriate the Economic Activity Tax Revenues, the City shall immediately notify in writing the following persons of such Event of Nonappropriation: (i) the Authority, (ii) the Trustee, (iii) the Municipal Securities Rulemaking Board, via its EMMA portal, and (iv) each nationally recognized rating agency which currently maintains a rating on any of the City's bonds. SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT The following is a summary of certain provisions contained in the Continuing Disclosure Agreement. The following is not a comprehensive description, however, and is quaked in its entirety by reference to the Continuing Disclosure Agreement for a complete recital of the terms thereof. C-30 Provision of Annual Reports (a) The City shall, or shall cause the Dissemination Agent to, not later than the last day of the seventh month after the end of the City's Fiscal Year, commencing with the year ending June 30, 2017, file with the MSRB, through EMMA, the following financial information and operating data (the "Annual Report"): (1) The audited financial statements of the City for the prior Fiscal Year prepared in accordance with accounting principles generally accepted in the United States. If audited financial statements are not available by the time the Annual Report is required to be filed pursuant to this Section, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement relating to the Bonds, and the audited financial statements shall be filed in the same manner as the Annual Report promptly after they become available; and (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement, as described under the heading Financial Information and Operating Data to be Included in Annual Report below, in substantially the same format contained in the final Official Statement. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the City is an "obligated person" (as defined by the Rule), which have been filed with the MSRB or the Commission. If the document included by reference is a final official statement, it must be available from the MSRB on EMMA. The City shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the City's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3(d). (b) Not later than three (3) Business Days prior to the date specified in subsection (a) for providing the Annual Report to the MSRB, the City shall either (1) provide the Annual Report to the Dissemination Agent, with written instructions to file the Annual Report as specified in subsection (a), or (2) provide written notice to the Dissemination Agent that the City has filed the Annual Report with the MSRB. If the Annual Report is provided to the Dissemination Agent with instructions to file the Annual Report, the City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such information constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may rely conclusively on any such certificate of the City and shall have no independent duty to review such Annual Report. (c) If the Dissemination Agent has not received either an Annual Report with filing instructions and written certification of the City referred to in Section 2(b) or a written notice from the City that it has filed an Annual Report with the MSRB by the date required in subsection (a), the Dissemination Agent shall send a notice in a timely manner to the MSRB and the Underwriter in substantially the form attached as Exhibit B to the Continuing Disclosure Agreement. C-31 (d) The Dissemination Agent shall, (1) notify the City each year, not later than 30 days prior to the date for providing the Annual Report to the MSRB, of the date on which its Annual Report must be provided to the Dissemination Agent or the MSRB, and (2) unless the City has filed the Annual Report with the MSRB, promptly following receipt of the Annual Report, instructions and written certification required in subsections (a) and (b) above, file the Annual Report with the MSRB and file a report with the City, the Authority and (if the Dissemination Agent is not the Bond Trustee) the Bond Trustee certifying that the Annual Report has been filed pursuant to the Continuing Disclosure Agreement and stating the date it was filed. (e) In addition to the foregoing requirements of this Section, the City agrees to provide copies of the most recent Annual Report to any requesting bondowner or prospective bondowner, but only after the same has been filed with the MSRB on EMMA. (f) The Annual Report shall be provided to the MSRB in such manner or format as prescribed by the MSRB. Reporting of Material Events (a) No later than 10 business days after the occurrence of any of the following events, the City shall give, or cause to be given, to the MSRB notice of the occurrence of any of the following events with respect to the Bonds ( "Material Events"): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions; the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bond, or other material events affecting the tax status of the Bonds; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and, whether or not material, tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the City; (13) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, in each case if material; and (14) appointment of a successor or additional trustee or the change of name of the trustee, if material. (b) The Dissemination Agent shall, promptly after obtaining actual knowledge of the occurrence of any event that it believes may constitute a Material Event, contact the chief financial officer of the City or his or her designee or such other person as the City shall designate in writing to the Dissemination Agent from time to time, inform such person of the event, and request that the City promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to subsection (d). If in response to a request under C-32 this subsection (b), the City determines that the event does not constitute a Material Event, the City shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent whether or not to report the occurrence pursuant to subsection (d). For the purpose of the Continuing Disclosure Agreement, "actual knowledge" of the Material Events means knowledge by an officer of the Dissemination Agent with responsibility for matters related to the Bond Indenture or the Continuing Disclosure Agreement. (c) Whenever the City obtains knowledge of the occurrence of a Material Event, because of a notice from the Dissemination Agent pursuant to subsection (b) or otherwise, the City shall promptly report the occurrence to the MSRB pursuant to subsection (a), or notify and instruct the Dissemination Agent in writing to report the occurrence pursuant to subsection (d). (d) If the Dissemination Agent receives written instructions from the City to report the occurrence of a Material Event, the Dissemination Agent shall promptly file a notice of such occurrence in a timely manner with the MSRB, with a copy to the City. If the Bond Indenture provides that notice of either of the Material Events described in subsections (a)(8) or (9) be provided to the registered owners of affected Bonds, then notwithstanding the foregoing requirements of this subsection, notice of the Material Event need not be given under this subsection any earlier than the notice of the underlying event provided under the Indenture. Termination of Reporting Obligation The City's obligations under the Continuing Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If the City's obligations under the Continuing Disclosure Agreement are assumed in full by some other entity, such person shall be responsible for compliance with the Continuing Disclosure Agreement in the same manner as if it were the City, and the City shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Bonds, the City shall give notice of such termination or substitution in the same manner as for a Material Event under the Continuing Disclosure Agreement. Dissemination Agent The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under the Continuing Disclosure Agreement, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the City. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the City pursuant to the Continuing Disclosure Agreement. The initial Dissemination Agent is UMB Bank, N.A. Amendment; Waiver Notwithstanding any other provision of the Continuing Disclosure Agreement, the City and Dissemination Agent may not amend the Continuing Disclosure Agreement and no provision of the Continuing Disclosure Agreement may be waived, unless Bond Counsel or other counsel experienced in federal securities law matters provides the City with its written opinion that the undertaking contained in the Continuing Disclosure Agreement, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to the Continuing Disclosure Agreement. In the event of any amendment or waiver of a provision of the Continuing Disclosure Agreement, the City shall (a) provide notice of such amendment or waiver in the same manner as for a Material Event under Section 4 of the Continuing Disclosure Agreement, and (b) describe such amendment or waiver in the next C-33 Annual Report. Both the notice of amendment or waiver and the description of any amendment or waiver in the next Annual Report required pursuant to (a) and (b) in the preceding sentence, respectively, shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Additional Information Nothing in the Continuing Disclosure Agreement shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in the Continuing Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by the Continuing Disclosure Agreement. If the City chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is specifically required by the Continuing Disclosure Agreement, the City shall have no obligation under the Continuing Disclosure Agreement to update such information or include it in any future Annual Report, as the case may be, or notice of occurrence of a Material Event. Default If there is a failure of the City or the Dissemination Agent to comply with any provision of the Continuing Disclosure Agreement, the Underwriter or any Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the City or the Dissemination Agent, as the case may be, to comply with its obligations under the Continuing Disclosure Agreement. A default under the Continuing Disclosure Agreement shall not be deemed an event of default under the Bond Indenture or the Financing Agreement, and the sole remedy under the Continuing Disclosure Agreement if there is any failure of the City or the Dissemination Agent to comply with the Continuing Disclosure Agreement shall be an action to compel performance. If the Underwriter or any Beneficial Owner of the Bonds requests the Dissemination Agent to enforce the obligations of the Issuer under the Continuing Disclosure Agreement, the Dissemination Agent shall not be required to take any action unless and until it has received written indemnity with respect to taking such enforcement action, in form and substance satisfactory to the Dissemination Agent, from such persons as in the sole judgment of the Dissemination Agent are acceptable to it. Duties and Liabilities of Dissemination Agent The Dissemination Agent shall have only such duties as are specifically set forth in the Continuing Disclosure Agreement, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent shall not be responsible the City's failure to submit a complete Annual Report to the MSRB. The Dissemination Agent is not responsible for ensuring the compliance with any rule or regulation of the City or Underwriter in connection with the filings of information in the Continuing Disclosure Agreement but is merely responsible for the filing of any such information provided to the Dissemination Agent by the City. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. The City shall pay the fees, charges and expenses of the Dissemination Agent in connection with its administration of the Continuing Disclosure Agreement. C-34 Financial Information and Operating Data to be Included in Annual Report The financial information and operating data contained in the tables set forth under the following headings in Appendix A of the final Official Statement: 1. THE CITY — GENERAL - - Economic Information - - Commerce, Industry and Employment; 2. CITY DEBT STRUCTURE - - Long -Term Indebtedness; 3. FINANCIAL INFORMATION CONCERNING THE CITY - - Sources of Revenue; 4. FINANCIAL INFORMATION CONCERNING THE CITY - - City's Financial Relationship with Argosy Casino; 5. FINANCIAL INFORMATION CONCERNING THE CITY - - Retail Sales Tax; and 6. PROPERTY TAX - - Property Valuations - - History of Property Valuation. C-35 (THIS PAGE LEFT BLANK INTENTIONALLY) APPENDIX D FORM OF OPINION OF BOND COUNSEL The Industrial Development Authority of the City of Riverside, Missouri Riverside, Missouri City of Riverside, Missouri Riverside, Missouri UMB Bank, N.A., as Trustee Kansas City, Missouri Stifel Nicolaus & Company, Incorporated St. Louis, Missouri Re: $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri City of Riverside, Missouri Special Obligation Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017 We have acted as Bond Counsel to The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") of the above -referenced bonds (the "Bonds"). In this capacity, we have examined the law and the certified proceedings, certifications and other documents that we deem necessary to render this opinion. The Bonds are issued under Chapter 349 of the Revised Statutes of Missouri (the "Act"), and a Bond Trust Indenture dated as of November 1, 2017 (the "Indenture"), between the Authority and UMB Bank, N.A., as trustee (the "Trustee"). Capitalized terms used and not otherwise defined in this opinion have the meanings assigned in the Indenture. Regarding questions of fact material to our opinion, we have relied on representations of the Authority and the City of Riverside, Missouri (the "City") contained in the Financing Agreement and the Tax Compliance Agreement and certified proceedings and other certifications of the Authority, the City and others furnished to us, without undertaking to verify them by independent investigation. We have also relied on the legal opinion of Spencer Fane LLP, Special Counsel to the City, dated the date of this opinion, regarding certain matters, including (a) the corporate status and due organization of the City, (a) the power of the City to enter into and perform its obligations under the Financing Agreement and the Tax Compliance Agreement, and (b) the due authorization, execution and delivery of the Financing Agreement and the Tax Compliance Agreement by the City and the binding effect and enforceability of those documents against the City. Based on and subject to the foregoing, we are of the opinion, under existing law, as follows: 1. The Authority is validly existing as a body corporate and politic and public instrumentality under the laws of the State of Missouri (the "State"), including particularly the Act, with lawful power and authority to issue the Bonds and to enter into and perform its obligations under the Indenture, the Financing Agreement and the Tax Compliance Agreement. D-1 2. The Bonds have been duly authorized, executed and delivered by the Authority and are valid and legally binding special, limited obligations of the Authority. 3. The Bonds are payable solely from, and secured by a valid and enforceable pledge and assignment of the Trust Estate, all in the manner provided in the Indenture. The Bonds do not constitute an indebtedness of the State or of any political subdivision of the State within the meaning of any constitutional or statutory provision or limitation and do not constitute a pledge of the full faith and credit of the State or of any political subdivision of the State. The issuance of the Bonds will not, directly, indirectly or contingently, obligate the State or any political subdivision of the State to levy any form of taxation or to make any appropriation for the payment of the Bonds. 4. The Indenture, the Financing Agreement and the Tax Compliance Agreement have been duly authorized, executed and delivered by the Authority and are valid and legally binding agreements of the Authority enforceable against the Authority. 5. The interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinion set forth in this paragraph is subject to the condition that the Authority and the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the Bonds in order to preserve the exclusion of the interest on the Bonds from gross income for federal income tax purposes. The Authority and the City have covenanted to comply with all of these requirements. Failure to comply with certain of these requirements may cause the interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Bonds have not been designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. 6. The interest on the Bonds is exempt from income taxation by the State. We express no opinion regarding (a) the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds (except to the extent, if any, stated in the Official Statement), (b) the perfection or priority of the lien on the Trust Estate pledged under the Indenture, or (c) federal or state tax consequences arising with respect to the Bonds, other than as expressly set forth in this opinion. The rights of the owners of the Bonds and the enforceability of the Bonds, the Indenture, the Financing Agreement and the Tax Compliance Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and by equitable principles, whether considered at law or in equity. This opinion is given as of its date, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may come to our attention or any changes in law that may occur after the date of this opinion. Very truly yours, 1-2 UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC-), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MAD CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN ORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR O R USE HEREOF FOR VALUE OR OTHERWISE BY OR Y 5 NIS WRONGFUL INASMUCH AS THE REGISTERED O, REOF, CEDE & CO., HAS AN INTEREST HEREIN. Registered No. R - UNITED STATES OF � CI INDUSTRIAL D Interest Rate STATE OF & CO. Registered r AUTHORITY MISSOURI 'VENUE REFUNDING BONDS ,ASTRUCTURE PROJECT) 2017 Dated Date CUSIP November _, 2017 Taxpayer I.D. No. 13-2555119 DOLLARS JM `IVDU litic DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI, a body and corporate and a public instrumentality (the "Authority"), for value received, promises to pa t solely from the sources herein specified to the registered owner named above, or registered assigns, the principal amount stated above on the maturity date stated above, except as the provisions herein set forth with respect to redemption prior to maturity may become applicable hereto, and in like manner to pay interest on said principal amount at the interest rate per annum stated above (computed on the basis of a 360 -day year of twelve 30 -day months) from the date of Bonds stated above or from the most recent interest payment date to which interest has been paid or duly provided for, payable semi- annually on each May 1 and November 1, beginning on May 1, 2018, until said principal amount is paid. Method and Place of Payment. The principal of and interest on this Bond shall be payable in any coin or currency of the United States of American which on the respective dates of payment thereof is legal tender for the payment of public and private debts. The principal of and redemption premium, if any, on this Bond shall be payable by check or draft to the registered owner at the maturity or redemption date upon presentation and surrender of this Bond at the principal corporate trust office of UMB BANK, N.A., in the City of Kansas City, Missouri (the "Trustee"). The interest payable on this Bood on any interest payment date shall be paid by the Trustee to the registered owner of this Bond ap g on the bond register maintained by the Trustee at the close of business on the Record Date for such int t, which shall be the 15th day (whether or not a business day) of the calendar month next precedin such ' " est payment date and shall be paid by (1) check or draft of the Trustee mailed to such `1°` address as it appears on such bond register or at such other address furnished in ting uch registered owner to the Trustee, or (2) at the written request addressed to the Trustee b registe owner of Bonds in the aggregate principal amount of at least $1,000,000, by electronic sfeoto the b or credit to the ABA routing number and account number filed with the Trustee no ys eding the Record Date. Any such written notice for electronic transfer shall be sign by owner shall include the name of the bank, its address, its ABA routing number and the e, num ' d ntact name related to such owner's account at such bank to which the payment is to 'ted. Limited Obligations. The Bonds and the interest t eoffiWispecial, limited obligations of the Authority payable solely out of Financing Pa in t Indenture) derived by the Authority under the Financing Agreement and are sec d b assignment of such Financing Payments and other funds as provided in the Indenture a Bon all not a deemed to constitute a debt or liability of the State of Missouri or of any political ' ' on ther . . the meaning of any state constitutional provision or statutory limitation and sh of co to a p dge of the full faith and credit of the State of Missouri or of any political subdivis' thereof, but a payable solely from the funds provided for in the Financing Agreement and the denture. Th is ce of the Bonds shall not directly or indirectly obligate the State of Missouri, an olitical subdi 'sion thereof, the Authority or its officers, directors or employees to provide any ds f \`" , e paymen f such Bonds. The issuance of the Bonds shall not, directly, indirectly or cont' ly, tate of Missouri or any political subdivision thereof to levy any form of taxatio erer to F any appropriation for their payment. The State of Missouri shall not in any event b le fo a ent of the principal of, premium, if any, or interest on the Bonds or for the performance o edge, gage, obligation or agreement of any kind whatsoever which may be undertake , , Au breach by the Authority of any such pledge, mortgage, obligation or agreement m imp any lia , pecuniary or otherwise, upon the State of Missouri or any charge upon its gene I dit o s taxing ower. The Authority has no power to tax. ' atio o ds. This Bond is one of a duly authorized series of bonds of the Authority design d "Industrial ' ' lopment Revenue Refunding Bonds (Riverside Horizons Infrastructure Projec a aggregate principal amount of $18,370,000 (the "Bonds"), issued pursuant to the auth and in 11 compliance with the Constitution and statutes of the State of Missouri, including particularly Chapter 9, as amended, and pursuant to proceedings duly had by the Authority. The Bonds are issued and are equally and ratably secured and entitled to the protection given by a Bond Trust Indenture dated as of November 1, 2017 (said Bond Trust Indenture, as amended and supplemented from time to time in accordance with the provisions thereof, herein called the "Indenture"), between the Authority and the Trustee, for the purpose of making funds available to the City of Riverside, Missouri (the "City") to provide funds for the purposes described in the Indenture. The funds will be made available pursuant to a Financing Agreement dated as of November 1, 2017 (said Financing Agreement, as amended and supplemented from time to time in accordance with the provisions thereof, herein called the "Financing Agreement"), between the Authority and the City. Under the Indenture, the Authority has pledged and assigned certain of its rights under the Financing Agreement, including the right to receive all Financing Payments thereunder, to the Trustee as security for the Bonds. Reference is hereby made to the Indenture -2- for a description of the property pledged and assigned thereunder, and the provisions, among others, with respect to the nature and extent of the security for the Bonds, and the rights, duties and obligations of the Authority, the Trustee and the registered owners of the Bonds, and a description of the terms upon which the Bonds are issued and secured, upon which provision for payment of the Bonds or portions thereof and defeasance of the lien of the Indenture with respect thereto may be made and upon which the Indenture may be deemed satisfied and discharged prior to payment of the Bonds. Under circumstances and upon satisfaction of the conditions set forth in the Indenture, additional bonds, on"" ty with the Bonds, may be issued. Redemption Prior to Maturity. The Bonds are not subject t : " , ' `°'dry redemption prior to maturity. Book -Entry System. The Bonds are being issued b in ;of a boo " ; try system with no physical distribution of bond certificates to be made exc ro ' in a denture. One Bond certificate with respect to each date on which the Bonds ar stat f' ature o ith respect to each form of Bonds, registered in the nominee name of the Securiteposit b ' g issued and required to be deposited with the Securities Depository and immobilize custody s" the custody of the Trustee as the Securities Depository's "FAST" agent. The book -en wi evidence positions held in the Bonds by the Securities Depository's participants, bene 'al ship of the Bonds in authorized denominations being evidenced in the records o i s. T fers of ownership shall be effected on the records of the Securities Depository an,d its i scant to rules and procedures established by the Securities Depository and its part' ants. Authority and the Trustee will recognize the Securities Depository nominee, while the a "N" d own s Bond, as the owner of this Bond for all purposes, including (i) payments of p al o red ' ption premium, if any, and interest on, this Bond, (ii) notices and (iii) voting. T fer of princi erest and any redemption premium payments to participants of the Securities Dep tory, and fer f principal, interest and any redemption premium payments to beneficial owners o : he Bonds by articipants of the Securities Depository will be the responsibility of such partici ants other no ' ees of such beneficial owners. The Authority and the Trustee will not be respons' r li " s ransfers of payments or for maintaining, supervising or reviewing the records taro by " "'"" 'ties Depository, the Securities Depository nominee, its participants or persons "" . ' gs h participants. While the Securities Depository nominee is the owner of this Bond, no "' ding provision hereinabove contained, payments of principal of, redemption prem an ; est on this Bond shall be made in accordance with existing arrangements g uthon a Trustee and the Securities Depository. Transfer " , xchange. EXCEPT AS OTHERWISE PROVIDED IN THE INDENTURE, THIS G B BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANO R NO F THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SEC a " S ORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPO . Tlux`` and may be transferred or exchanged, as provided in the Indenture, only upon the bond register main ' "ed by the Trustee at the above-mentioned office of the Trustee by the registered owner hereof ' . " 'son or by his duly authorized attorney, upon surrender of this Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his duly authorized attorney, and thereupon a new Bond or Bonds of the same maturity and in the same aggregate principal amount, shall be issued to the transferee in exchange therefor as provided in the Indenture, and upon payment of the charges therein prescribed. The Authority, the Trustee and any Paying Agent may deem and treat the person in whose name this Bond is registered on the bond register maintained by the Trustee as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price hereof and interest due hereon and for all other purposes. The Bonds are issuable in the form of fully registered Bonds without coupons in the denominations of $5,000 or any integral multiple thereof. -3- Limitation on Rights. The registered owner of this Bond shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any event of default under the Indenture, or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture. In certain events, on the conditions, in the manner and with the effect set forth in the Indenture, the principal of all the Bonds issued under the Indenture and then outstanding may become or may be declared due and payabl , before the stated maturity thereof, together with interest accrued thereon. The Bonds or the Indenture a modified, amended or supplemented only to the extent and in the circumstancespermitted by the Inden Authentication. This Bond shall not be valid or become of to any security or benefit under the Indenture until the Certificate of executed by the Trustee. IT IS HEREBY CERTIFIED AND DECLARED exist, happen and be performed precedent to and in the e issuance of this Bond do exist, have happened and have required by law. [Remainder In deli blank.] ` or be entitled hereon shall have been ong and things required to of the Indenture and the time, form and manner as IN WITNESS WHEREOF, THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI has caused this Bond to be executed in its name by the manual or facsimile signature of its President or Vice President and attested by the manual or facsimile signature of its Secretary or an Assistant Secretary and its corporate seal to be affixed or imprinted hereon, all as of the Dated Date specified above. CERTIFICATE OF AUTHENTICATION THE INDUST EVELOPM AUTHORITY O CITY OF RIVERSIDE, MISSO This Bond is one of the Bonds described in the within mentioned Indenture. By. Date of Authentication: Presi4gnt UMB BANK, N.A., Trustee Authorized Signature -5- srx r r or ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and fern unto (Please Print or Typewrite Name, Address and Number or Taxpayer Identification Numbe the within Bond and all rights thereunder, and hereby *vocab)kongitut ' and appoints to transfer the within Bond on the books kept for registratio th w' full power of substitution in the premises. Dated: NVM('F.! Thi-. 6anntim- to thic aecirmmP"f m„c+ n LEGAL OPINION The following is a true and correct copy of the legal opinion of Gilmor Bell, P.C., Kansas City, Missouri, on the within Bond and the series of which said Bond is a part, opinion was manually executed and was dated and issued as of the date of delivery of and payment for suc onds. GILMORE & BELL, P.C. . 2405 Grand Boulevard, Suit , 1 Kansas City, Missouri 08 The Industrial Development Authority of the City of Riverside, Missouri Riverside, Missouri City of Riverside, Missouri Riverside, Missouri & Company, Incorporated Re: $18,370,000 The Indus 'al D ' ment i ority of the City of Riverside, Missouri City of Riverside, Misso 'al O on evenue Refunding Bonds (Riverside Horizons Infrastructure Proj , Series 2017 We have acted as Bond C el to The In strial Development Authority of the City of Riverside, Missouri (the "Authority") „ the ' , ve-refere ed bonds (the `Bonds"). In this capacity, we have examined the law and the ified proF `"" ertifications and other documents that we deem necessary to render this opinion. The Bonds are iss E,, der C 'ter 349 of the Revised Statutes of Missouri (the "Act"), and a Bond Trust Inde as ; hw tuber 1, 2017 (the "Indenture"), between the Authority and LIMB Bank, N.A., as.,,' stee "Trust Capitalized terms used and not otherwise defined in this opinion have the me si ed in the denture. g ` 'ng que f fact material to our opinion, we have relied on representations of the Autho and t of verside, Missouri (the "City") contained in the Financing Agreement and the Tax Co gr'" ent and certified proceedings and other certifications of the Authority, the City and others furnished to us ithout undertaking to verify them by independent investigation. We have'*Iso relied on the legal opinion of Spencer Fane LLP, Special Counsel to the City, dated the date of this opinion, regarding certain matters, including (a) the corporate status and due organization of the City, (a) the power of the City to enter into and perform its obligations under the Financing Agreement and the Tax Compliance Agreement, and (b) the due authorization, execution and delivery of the Financing Agreement and the Tax Compliance Agreement by the City and the binding effect and enforceability of those documents against the City. -7- Based on and subject to the foregoing, we are of the opinion, under existing law, as follows: 1. The Authority is validly existing as a body corporate and politic and public instrumentality under the laws of the State of Missouri (the "State"), including particularly the Act, with lawful power and authority to issue the Bonds and to enter into and perform its obligations under the Indenture, the Financing Agreement and the Tax Compliance Agreement. If 2. The Bonds have been duly authorized, executed and deliveredb ' e Authority and are valid and legally binding special, limited obligations of the Authority. 3. The Bonds are payable solely from, and secured assignment of the Trust Estate, all in the manner provided in the indebtedness of the State or of any political subdivision of the S or statutory provision or limitation and do not constitute a pl of any political subdivision of the State. The issuance f the contingently, obligate the State or any political subdivisi the make any appropriation for the payment of the Bonds. 4. The Indenture, the Financing duly authorized, executed and delivered by the Authority enforceable against the Autho 5. The interest on the E and is not an item of tax preferenc individuals and corporations; howe earnings for the purpose of compu ' opinion set forth in this paragraph all requirements of the Inte e subsequent to the issuanc f the or gross income for federa ome all of these reauirem ts: a to the Bonds to be inc of the Bonds. e meaning of Se 265 The ) of a valWAnd enforceable pledge and ire. The ds do not constitute an em of any constitutional faiT and credit of the State or irectly, indirectly or )rm of taxation or to Dompliance Agreement have been and legally binding agreements of i is ex R fro oss income for federal income tax purposes ose`,3 federal alternative minimum tax imposed on such interest i on into account in determining adjusted current the alternat a um tax imposed on certain corporations. The zbject to th condition that the Authority and the City comply with Code 1986, as amended (the "Code"), that must be satisfied > ` o preserve the exclusion of the interest on the Bonds from ses. The Authority and the City have covenanted to comply with " ly with certain of these requirements may cause the interest on for federal income tax purposes retroactive to the date of issuance )een designated as "qualified tax-exempt obligations" within the the Bonds is exempt from income taxation by the State. .,. a '` opinion regarding (a) the accuracy, completeness or sufficiency of the Official Stateme '' er o g material relating to the Bonds (except to the extent, if any, stated in the Official Statement), (b) the p ection or priority of the lien on the Trust Estate pledged under the Indenture, or (c) federal or state nsequences arising with respect to the Bonds, other than as expressly set forth in this opinion. The rights of the owners of the Bonds and the enforceability of the Bonds, the Indenture, the Financing Agreement and the Tax Compliance Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and by equitable principles, whether considered at law or in equity. la This opinion is given as of its date, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may come to our attention or any changes in law that may occur after the date of this opinion. Very truly yours, W BOND PURCHASE AGREEMENT The Industrial Development Authority of the City of Riverside Missouri $18,370,000 Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 October 19, 2017 The Industrial Development Authority of the City of Riverside, Missouri Riverside, Missouri City of Riverside, Missouri Riverside, Missouri Ladies and Gentlemen: On the basis of the representations, warranties and covenants and upon the terms and conditions contained in this Bond Purchase Agreement ("Agreement"), the undersigned, Stifel, Nicolaus & Company, Incorporated (the "Purchaser"), hereby offers to purchase $18,370,000 aggregate principal amount of Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017 (the "Bonds"), to be issued by The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") under and pursuant to a Bond Trust Indenture dated as of November 1, 2017 (the "Indenture"), between the Authority and UMB Bank, N.A., as Trustee (the "Trustee"). All capitalized terms not defined elsewhere in this Agreement shall have the meanings set forth in the Indenture. Section 1. Representations, Warranties and Agreements. A. AuthoTi1y. By acceptance hereof, the Authority hereby represents and warrants to, and agrees with, the Purchaser as follows: (a) The Authority is an industrial development authority duly organized and existing under the laws of the State of Missouri (the "State") including Chapter 349 of the Revised Statutes of Missouri, as amended (the "Act'), to issue revenue bonds for the purpose of providing funds to finance and refinance the costs of certain "projects" as defined in the Act and to pay certain costs related to the issuance of such revenue bonds, with lawful power and authority to enter into the Indenture acting by and through its duly authorized officers and to issue the Bonds as contemplated hereunder. (b) The Authority has complied with all provisions of the Constitution and the laws of the State, including the Act, and has full power and authority to consummate all transactions contemplated by this Bond Purchase Agreement, the Bonds, the Indenture, the Financing Agreement dated as of November 1, 2017 (the "Financing Agreement"), between the Authority and the City of Riverside, Missouri (the "City"), the Tax Compliance Agreement dated as of November 1, 2017 (the ".Tax Compliance Agreement') among the Authority, the City and the Trustee, the Escrow Letter of Instructions to be dated the Closing Date (as hereinafter defined) 2143252.7 from the City and the Authority to the Trustee (the "Escrow Agreement") and any and all other agreements relating thereto. (c) This Bond Purchase Agreement, the Indenture, the Financing Agreement, the Escrow Agreement and the Tax Compliance Agreement, when executed and delivered by the Authority, will be the legal, valid and binding obligations of the Authority enforceable against the Authority in accordance with their respective terms, except to the extent that enforcement thereof may be limited by any applicable bankruptcy, reorganization, insolvency, moratorium or other law or laws affecting the enforcement of creditors' rights generally and by the availability of equitable remedies. (d) The information contained in the Official Statement (as hereinafter defined) relating to the Authority is and as of the Closing Time (as hereinafter defined) will be, true and does not omit and will not omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The information relating to the Authority contained in the Preliminary Official Statement related to the Bonds dated October 11, 2017 (the "Preliminary Oficial Statement'), as of its date, was true and did not omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (e) The Authority has duly authorized all necessary action to be taken by it for (i) the issuance and sale of the Bonds upon the terms set forth herein and in the Indenture and the Oficial Statement relating to the Bonds (the "Official Statement"); (ii) the execution and delivery of the Indenture providing for the issuance of and security for the Bonds (including the pledge and assignment by the Authority of the payments to be received pursuant to the Financing Agreement sufficient to pay the principal of, redemption premium, if any, and interest on the Bonds) and appointing the Trustee as trustee, paying agent and bond registrar under the Indenture; (iii) the approval of the Official Statement; (iv) the execution, delivery, receipt and due performance of this Bond Purchase Agreement, the Bonds, the Indenture, the Financing Agreement, the Escrow Agreement, the Tax Compliance Agreement and any and all such other agreements and documents as may be required to be executed, delivered and received by the Authority in order to carry out, give effect to and consummate the transactions contemplated hereby and by the Official Statement; and (v) the carrying out, giving effect to and consummation of the transactions contemplated hereby and by the Indenture, the Financing Agreement, the Escrow Agreement and the Official Statement. Executed counterparts of the Indenture, the Financing Agreement, the Escrow Agreement, the Tax Compliance Agreement and the Official Statement will be delivered to the Purchaser by the Authority at the Closing Time. (f) There is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body pending or, to the knowledge of the Authority, threatened against or affecting the Authority (or, to its knowledge, any basis therefor) (i) wherein an unfavorable decision, ruling or finding would adversely affect the transactions contemplated hereby or by the Indenture, the Financing Agreement, the Escrow Agreement or the Official Statement or the validity of the Bonds, the indenture, this Bond Purchase Agreement, the Financing Agreement, the Escrow Agreement or any agreement or instrument to which the Authority is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or by the Indenture, the Financing Agreement, the Escrow Agreement or the Official Statement, (ii) wherein an unfavorable decision, ruling or funding would adversely affect the ability of the Authority to perform its duties with respect to the Bonds and the security for their repayment, or (iii) which would otherwise be relevant and material to the making of an investment decision with respect to the Bonds. N (g) The execution and delivery of the Official Statement, this Bond Purchase Agreement, the Bonds, the Indenture, the Financing Agreement, the Escrow Agreement, the Tax Compliance Agreement and the other agreements contemplated hereby and by the Indenture, the Financing Agreement, the Escrow Agreement and the Official Statement, and compliance with the provisions thereof, will not conflict with or constitute on the part of the Authority, a breach of or a default under any existing law, court or administrative regulation, decree or order or any agreement, indenture, mortgage, lease or other instrument to which the Authority is subject or by which the Authority is or may be bound. (h) The Authority has received all licenses, permits or other regulatory approvals (if any) to execute the Official Statement, this Bond Purchase Agreement, the Indenture, the Financing Agreement, the Escrow Agreement, the Tax Compliance Agreement and the other agreements contemplated hereby and by the Indenture and the Official Statement and to perform its obligations hereunder and thereunder and the Authority is not in material default, and no event has occurred which would constitute or result in a material default under, any such licenses, permits or approvals. (i) Any certificate signed by any of the authorized officials of the Authority and delivered to the Purchaser shall be deemed a representation and warranty by the Authority to the Purchaser as to the statements made therein. 6) The Authority will deliver or cause to be delivered all opinions, certificates and other documents, as provided herein, including, but not limited to, an opinion of its counsel dated as of the Closing Date (as hereinafter defined) covering, among other things, the due authorization, execution and delivery by the Authority of this Bond Purchase Agreement, the Indenture, the Financing Agreement, the Escrow Agreement and the Tax Compliance Agreement. (k) The Authority agrees to reasonably cooperate with the Purchaser in any endeavor to qualify the Bonds for offering and sale under the securities or "Blue Sky" laws of such jurisdictions of the United States as the Purchaser may request; provided, however, that the Authority shall not be required with respect to the offer or sale of the Bonds, or otherwise, to file written consent to suit or to file written consent to service of process in any jurisdiction. The Authority consents to the use of drafts of the Preliminary Official Statement, the Preliminary Official Statement and drafts of the Official Statement prior to the availability of the official Statement by the Purchaser in obtaining such qualifications, subject to the right of the Authority to withdraw such consent for cause by written notice to the Purchaser. (1) No event has occurred and is continuing which with the lapse of time or the giving of notice, or both, would constitute an "event of default" under and as defined in the Indenture, the Financing Agreement, the Escrow Agreement or the Tax Compliance Agreement. B. City. By acceptance hereof the City hereby represents and warrants to, and agrees with, the Purchaser that: (a) The City is a fourth class city and political subdivision of the State. (b) The City has complied with all provisions of the Constitution and the laws of the State, and has full power and authority to consummate all transactions contemplated by this Bond Purchase Agreement, the Bonds, the Indenture, the Financing Agreement, the Escrow Agreement, the Continuing Disclosure Agreement dated as of November 1, 2017 between the City and UMB Bank, N.A. as dissemination agent (the "Continuing Disclosure Agreement') and any and all other agreements relating thereto. 3 (c) This Bond Purchase Agreement, the Financing Agreement, the Escrow Agreement, the Tax Compliance Agreement and the Continuing Disclosure Agreement, when executed and delivered by the City, will be the legal, valid and binding obligations of the City enforceable against the City in accordance with their respective terms, except to the extent that enforcement thereof may be limited by any applicable bankruptcy, reorganization, insolvency, moratorium or other law or laws affecting the enforcement of creditors' rights generally and by the availability of equitable remedies. (d) The information contained in the Official Statement relating to the City is and as of the Closing Time will be, true and accurate and does not omit and will not omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The information relating to the City contained in the Preliminary Official Statement, as of its date, was true and did not omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (e) The City has duly authorized all necessary action to be taken by the City for (i) the execution, delivery, receipt and due performance of this Bond Purchase Agreement, the Financing Agreement, the Escrow Agreement, the Tax Compliance Agreement, the Continuing Disclosure Agreement and any and all such other agreements and documents as may be required to be executed, delivered and received by the City in order to carry out, give effect to and consummate the transactions contemplated hereby or by the Official Statement; and (ii) the carrying out, giving effect to and consummation of the transactions contemplated hereby and by the Oficial Statement. Executed counterparts of the Financing Agreement, the Escrow Agreement, the Tax Compliance Agreement and the Continuing Disclosure Agreement will be delivered to the Purchaser by the City at the Closing Time. (f) There is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body pending or, to the knowledge of the City, threatened against or affecting the City (or, to its knowledge, any basis therefor) (i) wherein an unfavorable decision, ruling or finding would adversely affect the transactions contemplated hereby or by the Indenture and the Official Statement or the validity of the Bonds, the Indenture, this Bond Purchase Agreement or any agreement or instrument to which the City is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or by the Indenture, the Financing Agreement, the Escrow Agreement, the Continuing Disclosure Agreement, the Tax Compliance Agreement and the Official Statement, (ii) wherein an unfavorable decision, ruling or finding would adversely affect the ability of the City to perform its duties with respect to the Bonds and the security for their repayment, or (iii) which would otherwise be relevant and material to the making of an investment decision with respect to the Bonds. (g) The execution and delivery of this Bond Purchase Agreement, the Financing Agreement, the Escrow Agreement, the Tax Compliance Agreement, the Continuing Disclosure Agreement and the other agreements contemplated hereby and by the Indenture and the Official Statement, and compliance with the provisions thereof, do not and will not conflict with or constitute on the part of the City a violation, a breach of or a default under the organizational documents of the City or any existing law, court or administrative regulation, decree or order or any agreement, indenture, mortgage, lease or other instrument to which the City is subject or by which the City is or may be bound and no approval or other action by any governmental authority or agency is required in connection therewith. 0 (b) The City has received all licenses, permits or other regulatory approvals (if any) to execute this Bond Purchase Agreement, the Financing Agreement, the Escrow Agreement, the Tax Compliance Agreement, the Continuing Disclosure Agreement and the other agreements contemplated hereby and by the Indenture and the Official Statement and to perform its obligations hereunder and thereunder and the City is not in material default, and no event has occurred which would constitute or result in a material default under, any such licenses, permits or approvals. (i) The financial statements of the City included as Appendix B to the Preliminary Official Statement and the Official Statement present fairly the financial position of the City as of the dates indicated and the results of its operations for the periods specified in all material respects for the periods involved except as stated in the notes thereto. The City has not since June 30, 2016 incurred any material liabilities and since such date there has been no material adverse change in the financial position of the City or the operation by the City of its property other than as may be set forth in the Preliminary Official Statement and the Official Statement. 6) Any certificate signed by any of the authorized officials of the City and delivered to the Purchaser shall be deemed a representation and warranty by the City to the Purchaser as to the statements made therein. (k) The City will deliver or cause to be delivered all opinions, certificates and other documents, as provided herein, including, but not limited to, an opinion of its counsel dated as of the Closing Date covering, among other things, the due authorization, execution and delivery by the City of this Bond Purchase Agreement, the Financing Agreement, the Escrow Agreement, the Tax Compliance Agreement and the Continuing Disclosure Agreement. The City covenants and agrees to enter into the Continuing Disclosure Agreement as a written agreement constituting an undertaking to provide ongoing disclosure for the benefit of the Bondholders on or before the date of delivery of the Bonds as required by paragraph (b)(5)(i) of the Rule 15c2-12 promulgated pursuant to the Securities E=xchange Act of 1934, as amended (the "Rule"), which Continuing Disclosure Agreement shall be for the benefit of the Purchaser and the beneficial owners of the Bonds, and in the form as attached to the Official Statement. (1) The City is currently in compliance with each and every undertaking previously entered into by it pursuant to the Rule. In the past five years, the City has not failed to be in full compliance with each and every undertaking previously entered into by it pursuant to the Rule, except as set forth in the Official Statement under the heading "CONTINUING DISCLOSURE". Such failures, and the corrective actions undertaken by the City with respect to correction of certain such failures, are fully and accurately described under the heading "CONTINUING DISCLOSURE" in the Official Statement. (m) The City agrees to reasonably cooperate with the Purchaser in any endeavor to qualify the Bonds for offering and sale under the securities or "Blue Sky" laws of such jurisdictions of the United States as the Purchaser may request; provided, however, that the City shall not be required with respect to the offer or sale of the Bonds, or otherwise, to file written consent to suit or to file written consent to service of process in any jurisdiction. The City consents to the use of drafts of the Preliminary Official Statement, the Preliminary Official Statement and drafts of the Official Statement prior to the availability of the Official Statement by the Purchaser in obtaining such qualifications, subject to the right of the City to withdraw such consent for cause by written notice to the Purchaser. (n) The City has not defaulted in payment of principal or interest on any securities issued by the City and has not failed to make an annual appropriation of amounts necessary to pay 5 the principal of or interest on any other bonds or other obligations of the City with respect to which it has made any annual appropriation covenants. (o) No event has occurred and is continuing which with the lapse of time or the giving of notice, or both, would constitute an "event of default" under and as defined in the Financing Agreement or the Tax Compliance Agreement. Section 2. Purchase, Sale and Delivery of the Bonds On the basis of the representations, warranties and covenants contained herein and in the other agreements referred to herein, and subject to the terms and conditions herein set forth, at the Closing Time the Purchaser agrees to purchase from the Authority and the Authority agrees to sell to the Purchaser the Bonds at a purchase price of $19,953,704.35 (which represents an underwriters' discount of $183,700, plus original issue premium of $1,767,404.35). The Purchaser intends to make an initial bona fide public offering (excluding bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) of all of the Bonds at the prices set forth in Schedule 1 and as described in the Official Statement; provided, however, that the Purchaser may subsequently change such offering price or prices. The Purchaser agrees to notify the City and the Authority of such changes, if such changes occur prior to Closing, but failure to so notify shall not invalidate such changes. The Purchaser may offer and sell the Bonds to certain dealers (including dealers depositing Bonds into investment trusts) at prices lower than the principal amount thereof. Delivery of the Bonds shall be made in New York, New York, at the Closing Time, to the Purchaser through the facilities of The Depository Trust Company in New York, New York ("DTC"). Payment for the Bonds shall be made by the Purchaser by wire transfer of federal funds payable to the Trustee for the account of the City not later than 11:00 A.M., Central Time, on November 1, 2017, or at such other time and date as shall be mutually agreed upon by the City, the Authority and the Purchaser. Except for purposes of delivery of the Bonds to the Purchaser, the Closing shall take place in the offices of Gilmore & Bell, P.C., 2405 Grand Boulevard, Suite 1100, Kansas City, Missouri 64108. The delivery of and payment for the Bonds are herein called the "Closing". The date of such delivery and payment is herein called the "Closing Date," and the hour and date of such delivery and payment is herein called the "Closing Time". The Bonds shall be delivered to DTC or its representative at least one business day prior to the Closing Date in the form of one fully registered bond per maturity as set forth in the Indenture. The Authority or its agents shall authorize the Trustee to release or authorize the release of the Bonds on the Closing Date upon receipt of payment for Bonds as aforesaid. In addition, the City, the Authority and the Purchaser agree that there shall be a preliminary closing held at the same place as the Closing, commencing at least one business day prior to the Closing Date. In connection with such offering and sale of the Bonds, the Bonds may be offered and sold to certain dealers, unit investment trusts and money market funds, certain of which may be sponsored or managed by the Purchaser, at prices lower than the initial offering price or prices set forth in the Official Statement. The Purchaser also reserves the right to (i) over -allot or effect transactions which stabilize or maintain the market price or prices of the Bonds at levels above those which might otherwise prevail in the open market and (ii) discontinue such stabilizing, if commenced, at any time without prior notice. The City and the Authority acknowledge and agree that: (i) the primary role of the Purchaser is to purchase the Bonds for resale to investors in an arm's length commercial transaction among the City, the Authority and the Purchaser and that the Purchaser has financial and other interests that differ from those of the City and the Authority; (ii) the Purchaser is acting solely as a principal and not as a municipal advisor (within the meaning of Section 15B of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), financial advisor or fiduciary to the City or the Authority and has not assumed any advisory or Gi fiduciary responsibility to the City or the Authority with respect to this Bond Purchase Agreement, the offering of the Bonds and the discussions, undertakings and procedures leading thereto (irrespective of whether the Purchaser, or any affiliate of the Purchaser, has provided other services or is currently providing other services to the City or the Authority on other matters); (iii) the only obligations the Purchaser has to the City and the Authority with respect to the transaction contemplated hereby expressly are set forth in this Bond Purchase Agreement; and (iv) the City and the Authority have consulted their own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent they have deemed appropriate. The Purchaser agrees to assist the Authority in establishing the issue price of the Bonds and shall execute and deliver to the Authority at Closing an "issue price" or similar certificate (the "Issue Price Certificate"), together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as ExW—bi_t_& with such modifications as may be appropriate or necessary, in the reasonable judgment of the Purchaser, the Authority and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. Except as may be otherwise set forth on E&Jbit A, the Authority will treat the first price or prices at which 10% of each maturity of the Bonds (the "IO% Test") is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% Test). At or promptly after the execution of this Agreement, the Purchaser shall report to the Authority the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% Test has not been satisfied as to any maturity of the Bonds, the Purchaser agrees to promptly report to the Authority the prices at which it sells the unsold Bonds of that maturity to the public. This reporting obligation shall continue, whether or not the Closing has occurred, until the 10% Test has been satisfied as to the Bonds of that maturity (or, if applicable, each separate CUSIP number within such maturity subject to the 10% Test). In addition, if the 10% Test has not been satisfied with respect to any maturity of the Bonds prior to Closing, then the Purchaser agrees that it will provide the Authority with a representation as to the price or prices, as of the date of Closing, at which the Purchaser reasonably expects to sell the remaining Bonds of such maturity. The Purchaser confirms that it has offered the Bonds to the public on or before the date of this Agreement at the offering price or prices (the "initial offering price"), or at the corresponding yield or yields, set forth on Schedule B of Exhibit A, except as otherwise set forth therein. Schedule B of Exhibit A also sets forth, as of the date of this Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the Authority and the Purchaser agree that the restrictions set forth in the next sentence shall apply, which will allow the Authority to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the "hold -the -offering -price rule"). So long as the bold -the -offering -price rule remains applicable to any maturity of the Bonds, the Purchaser will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following: (i) the close of the fifth (51) business day after the sale date; or (ii) the date on which the Purchaser has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. The Purchaser shall promptly advise the Authority when it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date. 7 The Purchaser confirms that any selling group agreement and any retail distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such retail distribution agreement, as applicable, to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the Purchaser that the 10% Test has been satisfied as to the Bonds of that maturity and (B) comply with the hold -the -offering -price rule, if applicable, in each case if and for so long as directed by the Purchaser. The Authority acknowledges that, in making the representation set forth in this subsection, the Purchaser will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the hold -the -offering -price rule, if applicable, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a retail distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the hold -the -offering - price rule, if applicable, as set forth in the retail distribution agreement and the related pricing wires. The Authority further acknowledges that the Purchaser shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement, to comply with its corresponding agreement regarding the hold -the -offering -price rule as applicable to the Bonds. The Purchaser acknowledges that sales of any Bonds to any person that is a related party to the Purchaser shall not constitute sales to the public for purposes of this section. Further, for purposes of the above: (a) "public" means any person other than an underwriter or a related party, (b) "underwriter" means (i) any person that agrees pursuant to a written contract with the Authority to participate in the initial sale of the Bonds to the public and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial We of the Bonds to the public), (c) a purchaser of any of the Bonds is a "related parry" to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and (d) "sale date" means the date of execution of this Agreement by each party. Section 3. Conditions to the Purchaser's Obligations The Purchaser's obligations hereunder shall be subject to the due performance by the Authority and the City of their obligations and agreements to be performed hereunder at or prior to the Closing Time and to the accuracy of and compliance with the Authority's and the City's representations and warranties contained herein, as of the date hereof and as of the Closing Time, and are also subject to the following conditions: (a) Within seven business days after the date of this Agreement, the Authority shall provide to the Purchaser sufficient copies of the Official Statement to enable the Purchaser to comply with the requirements of Rule 15c2 -12(b)(4) of the Commission under the Exchange Act, and with the requirements of Rule G-32 of the Municipal Securities Rulemaking Board (the "MSRB')- The City and the Authority hereby consent to the filing by the Purchaser of the Official Statement with the Electronic Municipal Market Access ("EMMA") system of the Municipal Securities Rulemaking Board (the "MSRB"). If an amended Official Statement is prepared during the "primary offering disclosure period," and if required by any applicable Commission or MSRB rule, the Purchaser also shall make the required filings of the amended Official Statement. The City and the Authority shall provide the Purchaser with the information necessary to complete MSRB Form G-32 for all filings to be made in connection with the transactions contemplated by this Bond Purchase Agreement. The Preliminary Official Statement and the Official Statement may be delivered in printed and a "designated electronic format" as defined in the MSRB's Rule G-32 and as may be agreed by the City, the Authority and the Purchaser. If the Official Statement has been prepared in electronic form, the City and the Authority hereby confirm that they do not object to distribution of the Official Statement in electronic form. (b) No tombstone or other advertisement of the sale of the Bonds by the Purchaser shall be published, unless such tombstone or other advertisement is submitted first to the Authority and the City, and the Authority and the City approve such tombstone or other advertisement in writing, which approval shall not be unreasonably withheld. (c) The Bonds, the Indenture, the Financing Agreement, the Escrow Agreement and the Continuing Disclosure Agreement shall have been duly authorized, executed and delivered in the form heretofore approved by the Purchaser with only such changes therein as shall be mutually agreed upon by the Authority, the Purchaser and the City. (d) At the Closing Time, the Purchaser shall receive: (1) The opinions in form and substance satisfactory to the Purchaser, dated as of the Closing Date, of (aa) Gilmore & Bell, P.C., bond counsel ("Bond Counsel"), in the form attached to the Official Statement; (bb) the supplemental opinion of Bond Counsel and the opinion of disclosure counsel in substantially the forms attached as Exhibit B hereto; (cc) Spencer Fane LLP, City's counsel, in substantially the form attached as Exhibit C hereto; (dd) Spencer Fane LLP, Authority's counsel, in substantially the form attached as Exhibit D hereto; and (cc) Lewis Rice LLC, Purchaser's counsel, in substantially the form attached as Exhibit E hereto; (2) A certificate, in form and substance satisfactory to the Purchaser, of the President of the Authority or of any other of its duly authorized officers satisfactory to the Purchaser, dated as of the Closing Date; (3) A certificate, in form and substance satisfactory in form and substance to the Purchaser, of the City, dated as of the Closing Date; (4) A copy of the Ordinance passed by the City which (aa) approves the Official Statement, (bb) authorizes the execution and delivery of this Agreement, the Financing Agreement, the Tax Compliance Agreement, the Escrow Agreement, the Continuing Disclosure Agreement and any and all such other agreements and documents as may be required to be executed, delivered and received by the City in order to carry out, give effect to and consummate the transactions contemplated hereby and by the Official Statement and (cc) authorizes the carrying out, giving effect to and consummation of the transactions contemplated hereby and by the Official Statement; (5) A copy of the Resolution passed by the Authority which (aa) approves the Official Statement, (bb) authorizes the execution and delivery of this Agreement, the Indenture, the Financing Agreement, the Tax Compliance Agreement, the Escrow Agreement and any and all such other agreements and documents as may be required to be executed, delivered and received by the Authority in order to carry out, give effect to and consummate the transactions contemplated hereby and by the Official Statement and (cc) authorizes the carrying out, giving effect to and consummation of the transactions contemplated hereby and by the Official Statement; (6) Executed counterparts of the Indenture, the Financing Agreement, the Tax Compliance Agreement, the Escrow Agreement and the Continuing Disclosure Agreement; (7) Specimens of the Bonds; (8) DTC's Blanket Letter of Representations; (9) IRS Form 8038-G to be filed with the IRS; (10) Evidence from Standard & Poor's Ratings Services that the Bonds have been rated "A'; and (11) Such additional certificates and other documents as the Purchaser may reasonably request to evidence performance or compliance with the provisions hereof and the transactions contemplated hereby and by the Indenture, the Financing Agreement, the Escrow Agreement and the Official Statement, all such certificates and other documents to be satisfactory in form and substance to the Purchaser. Section 4. Conditions to the Obligations of the Authority and the City The obligations of the Authority and the City hereunder are subject to the Purchaser's performance of its obligations hereunder. Section 5. Purchaser's Right to Cancel The Purchaser shall have the right to cancel its obligations hereunder to purchase the Bonds (such cancellation shall not constitute a default for purposes of Section 7 hereof) by notifying you in writing or by facsimile of its election to make such cancellation prior to the Closing Time, if at any time prior to the Closing Time: (a) the market price or marketability of the Bonds, or the ability of the Purchaser to enforce contracts for the sale of the Bonds, shall be materially adversely affected by any of the following events: (i) Legislation shall be enacted or for the first time actively considered for enactment by the Congress of the United States or the legislature of the State or shall have been favorably reported out of committee of either body or be pending in committee of either body, or shall have been recommended to the Congress for passage by the President of the United States or a member of the President's cabinet, or a decision shall have been 10 rendered by a federal court of the United States, a State court or the United States Tax Court, or a ruling, resolution, regulation or temporary regulation, release or announcement shall have been made or shall have been proposed to be made by the Treasury Department of the United States, the IRS or other federal or State authority with appropriate jurisdiction, with respect to federal or State taxation upon interest or other income to be derived by the Authority pursuant to the Indenture, or upon interest on the Bonds or securities of the general character of the Bonds; or (ii) There shall have occurred a formal declaration of national emergency or war or engagement in military conflict or hostilities whether conventional, nuclear and/or biological, by the United States or by other sovereign state or states against the United States or the occurrence of any military conflict or hostilities whether conventional, nuclear and/or biological, involving the United States without the benefit of a formal declaration of war by the United States or any conflict involving the armed forces of the United States shall have escalated beyond the level of such conflict as of the date hereof, or the occurrence of any acts of terrorists or attacks by terrorists within or outside of the borders of the United States which would cause the effective operation of the government of the United States to cease or which would cause the Purchaser to be unable to carry on their regular business; or the occurrence of any other national emergency or calamity, including natural disasters or a downgrade in the sovereign debt rating of the United States by any major credit rating agency or a payment default on United States Treasury obligations, which would cause the effective operation of the government of the United States to cease or which would cause the Purchaser to be unable to carry on its regular business; or (iii) There shall be in force a general suspension of trading or material limitation on the New York Stock Exchange or another major exchange, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of determination by that exchange or by order of the Commission or any other governmental authority having jurisdiction; or (iv) Legislation shall have been enacted by the Congress of the United States or shall have been favorably reported out of committee or be pending in committee, or shall have been recommended to the Congress for passage by the President of the United States or a member of the President's Cabinet, or a decision by a court of the United States shall be rendered, or a ruling, regulation, proposed regulation or statement by or on behalf of the Commission or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that any obligations of the general character of the Bonds, the Indenture, or any comparable securities of the Authority or the City are not exempt from registration, qualification or other requirements of the Securities Act of 1933, as amended (the "Securities Act") or the Trust Indenture Act of 1939, as amended, or otherwise, or would be in violation of any provisions of the federal securities laws; or (v) Except as disclosed in or contemplated by the Official Statement, any material adverse change in the affairs of the City or the Authority shall have occurred; or (vi) Any rating on any bonds or other obligations of the City is reduced or withdrawn; or (b) Any fact, event or circumstance shall exist that either makes untrue or incorrect any statement or information contained in the Official Statement as then amended or supplemented (other than any statement provided by the Purchaser) or is not reflected in the Official Statement 11 as then amended or supplemented, but should be reflected therein in order to make the statements and information contained therein, in the light of the circumstances under which they were made, not misleading and, in either such event, the City or the Authority refuses to permit the Official Statement to be supplemented or corrected in a form and manner approved by the Purchaser or supply such statement or information or if such supplement or correction would, in the opinion of the Purchaser, materially adversely affect the market for the Bonds or the ability of the Purchaser to enforce contracts for the sale of the Bonds at the contemplated offering prices; or (c) A general banking moratorium shall have been declared by federal, State or State of New York authorities and be in force; or (d) A material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; or (e) Other action or events shall have occurred or transpired, any of which has the purpose or effect, directly or indirectly, of materially adversely affecting the federal income tax consequences of any of the transactions contemplated in connection herewith, or that securities of the general character of the Bonds shall not be exempt from registration under the Securities Act; or (f) There shall have occurred since June 30, 2016, any material adverse change in the affairs of the City from that reflected in the financial statements of the City provided to the Purchaser in connection with the Bonds, not otherwise disclosed to the Purchaser or in the Official Statement; or (g) Any representation of the City or the Authority contained in this Bond Purchase Agreement shall prove to be or to have been false in any material respect; or (h) Litigation or an administrative proceeding or investigation shall be pending or threatened affecting, contesting, questioning or seeking to restrain or enjoin (i) the issuance or delivery of any of the Bonds or the payment, collection or application of the proceeds of the Bonds or of other moneys or securities pledged or to be pledged under the Indenture, (ii) the validity of the Bonds, (iii) the validity of any of the documents entered into in connection with the transactions contemplated by the Official Statement or any proceedings taken by the City or the Authority with respect to any of the foregoing, (iv) the City's or the Authority's creation, organization or existence or the titles to office of any members of the City or the Authority or officers or its power to engage in any of the transactions contemplated by the Official Statement, (v) the organization or existence of the Authority, or (vi) the legal power or authority of the Authority or the City to enter into and engage in any of the transactions contemplated by this Agreement. Upon the cancellation of this Agreement by the Purchaser, all obligations of the City, the Authority and the Purchaser under this Agreement shall terminate, without further liability, except that the City, the Authority and the Purchaser shall pay their respective expenses as set forth in Section 7 of this Agreement. Section 6. Representations, Warranties and Agreements to Survive Delivery All of the Authority's and the City's representations, warranties, and agreements shall remain operative and in full force and effect, regardless of any investigations made by the Purchaser on its own behalf, and shall survive delivery of the Bonds to the Purchaser. 12 Section 7. Payment of Expenses Whether or not the Bonds are sold by the Authority to the Purchaser (unless such sale be prevented at the Closing Time by the Purchaser's default), the Purchaser shall be under no obligation to pay any expenses incident to the performance of the obligations of the Authority and the City hereunder. If the Bonds are sold by the Authority to the Purchaser, all expenses and costs to effect the authorization, preparation, issuance, delivery and sale of the Bonds (including, without limitation, the fees and disbursements of Gilmore & Bell, P.C., as Bond Counsel, the fees and disbursements of the Purchaser in connection with the offering and sale of the Bonds (including the fees of Purchaser's counsel) and the expenses and costs for the preparation, printing, photocopying, execution and delivery of the Bonds, the Official Statement, this Bond Purchase Agreement and all other agreements and documents contemplated hereby) shall be paid by the Authority out of the proceeds of the Bonds. If the Bonds are not sold by the Authority to the Purchaser (unless such sale be prevented at the Closing Time by the Purchaser's default), all such expenses and costs shall be paid by the City. Section 8. Use of Official Statement The Authority hereby ratifies and consents to the distribution and use by the Purchaser on or before the date hereof, in connection with the public offering of the Bonds of the Preliminary Official Statement, which Preliminary Official Statement the Authority represents and warrants has been "deemed final" by the Authority for the purposes of the Rule as of the date thereof, except for such omissions as permitted by the Rule. Section 9. Agreement to Notify Underwriter of Need to Supplement or Amend Official Statement If at any time prior to the earlier of (i) receipt of notice from the Purchaser that the final Official Statement is no longer required to be delivered under the Rule or (ii) 90 days after the "end of the underwriting period," (as such terra is defined in the Rule), but in no case less than twenty-five (25) days following such end of the underwriting period, any event occurs as a result of which the Official Statement might include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Authority or the City, as applicable, shall promptly notify the Purchaser in writing of such event. If in the opinion of the Purchaser, such event requires the preparation and publication of an amendment or supplement to the Official Statement, the City agrees, at its expense, to promptly prepare an appropriate amendment or supplement thereto (and file, or cause to be filed, the same with EMMA and mail such amendment or supplement to each record owner of the Bonds) so that the statements in the Official Statement as so amended or supplemented will not, in light of the circumstances under which they were made, be misleading, in a form and in a manner approved by the Purchaser. Section 10, Notice Any notice or other communication to be given under this Agreement may be given by mailing or delivering the same in writing to The Industrial Development Authority of the City of Riverside, Missouri, 2950 NW Vivian Road Riverside, Missouri 64150; to the City, City Hall, 2950 NW Vivion Road Riverside, Missouri 64150, Attention: City Attorney; and any notice or other communication to be given to the Purchaser under this Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, One Financial Plaza, 501 North Broadway, 8'" Floor, St. Louis, Missouri 63102, Attention: Peter Czajkowski. 13 Section 11. Applicable Law; Nonassignability This Agreement shall be governed by the laws of the State. This Agreement shall not be assigned. Section 12. Execution of Counterparts This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. Section 13. Rights Hereunder This Agreement is made for the benefit of the Authority, the City and the Purchaser and no other person including any purchaser of the Bonds shall acquire or have any rights hereunder or by virtue hereof. Section 14. Transaction Conducted by Electronic Means. The transactions provided in this Agreement may be conducted and related documents may be sent, received or stored by electronic means. Copies, telecopies, facsimiles, electronic files, and other reproductions of original executed documents shall be deemed to be authentic and valid counterpart of such original documents for all purposes, including the filing of any claim, action, or suit in the appropriate court of law Section 15. Effective Date This Agreement shall become effective upon acceptance hereof by the Authority and the City. [Signatures begin on following page] 14 IN WITNESS WHEREOF, the parties hereto have executed this Bond Purchase Agreement, all as of the day and year first above mentioned. Very truly yours, STIFEL, NICOLAUS & COMPANY, INCORPORATED By: Name: Pe ovvski Title: f Public Finance S-1 abovethe date first I r Wi By: Name: athleen L. Rase Title: Mayer • ' r r; 1 r. ..luINVIR"01AM-914 By Name: Leland Finley Title: President ON SCHEDULE 1 TO THE BOND PURCHASE AGREEMENT Maturities and Interest Rates Redemption The Series 2017 Bonds are not subject to optional or mandatory redemption prior to maturity. SI -1 Serial Bonds Maturity Principal Interest Mav 1 Amount Rate Price Yield CUSIP 2018 $2,000,000 2.0000/a 100.397% 1.200% 769166 BC2 2019 2,095,000 3.000 102.366 1.400 769166 BDO 2020 2,160,000 3.000 103.467 1.580 769166 BE8 2021 2,225,000 4.000 107.712 1.720 769166 BF5 2022 2,310,000 4.000 108.971 1.910 769166 BG3 2023 2,405,000 5.000 115.157 2.070 769166 BH 1 2024 2,525,000 5.000 116.608 2.240 769166 BJ7 2025 2,650,000 5.000 117.823 2.390 769166 BK4 Redemption The Series 2017 Bonds are not subject to optional or mandatory redemption prior to maturity. SI -1 EXHIBIT A TO THE BOND PURCHASE AGREEMENT Form of Issue Price Certificate The Industrial Development Authority of the City of Riverside Missouri $18,370,000 Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 The undersigned, Stifel, Nicolaus & Company, Incorporated (the "Stifel"), hereby certifies as set forth below with respect to the sale and issuance of the above -captioned obligations (the "Bonds"). 1. Purchase Contract On October 19, 2017 (the "Sale Date"), Stifel and the Issuer executed a Purchase Contract (the "Purchase Contract") in connection with the sale of the Bonds. Stifel has not modified the Purchase Contract since its execution on the Sale Date. 2. Price - (a) As of the date of this Certificate, for each of the Maturities of the Bonds other than the Hold -the -Offering -Price Maturities, the first price or prices at which at least 10% of such Maturities of the Bonds was sold to the Public (the "10% Test") are the respective prices listed in Schedule A attached hereto. (b) As set forth in the Bond Purchase Agreement relating to the Bonds, Stifel has agreed in writing that, for each Maturity of the Hold -the -Offering -Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the "hold -the - offering -price rule"). Pursuant to such agreement, Stifel has not offered or sold any Maturity of the Hold -the -Offering -Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period. Stifel is the only Underwriter (as defined below). 3. Defined Terms. (a) "Hold -the -Offering -Price Maturities " means those Maturities of the Bonds listed in Schedule B hereto as the "Hold -the -Offering -Price Maturities. (b) "Holding Period" means, with respect to a Hold -the -Offering -Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date (October 19, 2017), or (ii) the date on which the Underwriter has sold at least 10% of such Hold -the -Offering -Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold -the -Offering -Price Maturity. (c) `Issuer" means The Industrial Development Authority of the City of Riverside, Missouri. (d) "Maturity" means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (e) "Public" means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (i) "Underwriter" means (i) any person that agrees pursuant to a written contract with the Issuer (or with Stifel to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Underwriter's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Compliance Agreement of the Issuer dated [closing date] and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8438-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. STIFEL, NICOLAUS & COMPANY, INCORPORATED By: [Title] M. Dated: [Closing Date) [Title] A-2 SCHEDULE A TO ISSUE PRICE CERTIFICATE Adaal Sales Information as of Closing Date Maturity/CUSIP Coupon Date Sold Time Sold Par Amount Sale Price ["Reasonably Expected Sales Prices for Undersold Maturities as of Closing Date Maturity/CUSR' Coupon Par Amount Offering Prices **I A-3 SCHEDULE B TO ISSUE PRICE CERTIFICATE Maturity COMM Yield Par Amount Sale Price 2019 3.000% 1.400% $2,095,000 102.366% A-4 EXHIBIT B TO THE BOND PURCHASE AGREEMENT Forms of Bon Disclosure Counsel Op inions November 1, 2017 The industrial Development Authority of UMB Bank, N.A., as Trustee the City of Riverside, Missouri Kansas City, Missouri Riverside, Missouri City of Riverside, Missouri Riverside, Missouri Stifel Nicolaus & Company, Incorporated St. Louis, Missouri Re: $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure), Series 2017 Ladies and Gentlemen: We have acted as bond counsel to The Industrial Development Authority of the City of Riverside, Missouri (the "Authority"), in connection with the issuance of the above -captioned bonds (the "Bonds"). This opinion supplements our approving legal opinion of even date herewith relating to the Bonds. We have examined the law and the certified proceedings,, certifications and other documents that we deem necessary to render this opinion. The Bonds are issued under Bond Trust Indenture dated as ofNovember 1, 2017 (the "Indenture") by and between the Authority and UMB Bank, N.A., Kansas City, Missouri, as Trustee (the "Trustee"). Capitalized terms used and not otherwise defined in this opinion have the meanings assigned in the Indenture. Regarding questions of fact material to our opinion, we have relied on the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify them by independent investigation. Based on and subject to the foregoing, we are of the opinion, under existing law, that the Bonds are exempt from registration under the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended. This opinion is delivered to you for your use only and may not be used or relied on by any third party for any purpose without our prior written approval in each instance. This opinion is given as of its date, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may come to our attention or any changes in law that may occur after the date of this opinion. Very truly yours, November 1, 2017 The Industrial Development Authority of Stifel Nicolaus & Company, Incorporated the City of Riverside, Missouri St. Louis, Missouri Riverside, Missouri City of Riverside, Missouri Riverside, Missouri Re: $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure), Series 2017 Ladies and Gentlemen: We have acted as Bond Counsel to The industrial Development Authority of the City of Riverside, Missouri (the "Authority") in connection with the issuance of the above -captioned bonds (the "Bonds"), pursuant to the Bond Trust Indenture dated as of November 1, 2017 (the "Indenture") between The Authority and UMB Bank, N.A., as Trustee (the "Trustee). This opinion supplements our approving legal opinion of even date herewith related to the Bonds. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Indenture. As disclosure counsel to the Authority, we have examined the originals or copies, certified or otherwise identified to our satisfaction, of the Preliminary Official Statement dated October 11, 2017 (the "Preliminary Official Statement"), the final Official Statement dated October 14, 2017 (the "Official Statement"), and such other documents, certificates, letters, opinions, records and other instruments as we deem necessary to render this opinion. In connection with the preparation of the Preliminary Official Statement and the Official Statement, we have generally reviewed information furnished to us by, and have participated in conferences with, representatives of the City, the City Attorney, and representatives of the Underwriter, and we have relied upon certificates of officials of such parties and of other public officials and persons as we have deemed appropriate. We are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of any of the statements contained in the Preliminary Official Statement or the Official Statement and make no representation that we have independently verified the accuracy, completeness or fairness of such statements. In our capacity as disclosure counsel to the Authority, however, we have considered the information contained in the Preliminary Official Statement and the Official Statement and, based upon our review and discussions, and assuming the accuracy of the information contained in the aforementioned documents, certificates, opinions, letters, records and instruments, nothing has come to our attention which leads us to believe that the Preliminary Official Statement, as of its date, except for the offering price(s), interest rate(s), selling compensation, aggregate principal amount, delivery dates, ratings, and other terms of the Bonds depending on such matters, or the Official Statement, as of its date and as of the date hereof, contains any untrue statement of a material fact, or omits to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. We express no view, however, as to (i) the statistical or financial information relating to the City included in Appendix A to the Preliminary Official Statement and the Official Statement, (ii) the Financial Statements of the City included in Appendix B to the Preliminary Official Statement and the Official Statement, (iii) any other financial, technical or statistical data or any estimates, projections, assumptions or expressions of opinions included in the Preliminary Official Statement and the Official Statement or any Appendix thereto, or (iv) describe any material information included in the final Official Statement that was not included in the Preliminary Official Statement or a Supplement to the Preliminary Official Statement. This opinion is delivered to you for your use only and may not be used or relied on by any third party for any purpose without our prior written approval in each instance. This opinion is given as of its date, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may come to our attention or any changes in law that may occur after the date of this opinion. Very truly yours, LUN EXHIBIT C TO THE BOND PURCHASE AGREEMENT Form of City CounselOAiwiou November 1, 2017 The Industrial Development Authority of the Stifel Nicolaus & Company, Incorporated City of Riverside, Missouri St. Louis, Missouri Riverside, Missouri City of Riverside, Missouri UMB Bank, N.A., as Trustee Riverside, Missouri Kansas City, Missouri Re: $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 Ladies and Gentlemen: We are counsel to the City of Riverside, Missouri, a city of the fourth class and political subdivision of the State of Missouri (the "City") and; as such, in connection with the issuance and sale of the above -referenced Bonds, we have examined the following: (a) Minutes of the meeting and Ordinance No. _ of the City passed on October 17, 2017 (said Ordinance being referred to as the "Authorizing Ordinance''). (b) Bond Trust Indenture dated November 1, 2017 (the "Indenture") between the City and UMB Bank, N.A., as Trustee (the "Trustee"). (c) Financing Agreement dated as of November 1, 2017 (the "Financing Agreement") between The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") and the City. (d) Tax Compliance Agreement dated as of November 1, 2017 among the Authority, the City and UMB Bank, N.A., as Trustee (the "Trustee"). (e) Continuing Disclosure Agreement dated as of November 1, 2017 (the "Continuing Disclosure Agreement") executed by the City and the Trustee for the benefit of holders of the Bonds. (f) Bond Purchase Agreement dated as of October 19, 2017, among the Authority, the City and Stifel, Nicolaus & Company, Incorporated, as Underwriter. (g) Cooperation Agreement dated January 12, 2017 (the "Cooperation Agreement") among the Authority, the City, the Trustee, Platte County, Missouri and the Riverside-Quindaro Bend Levee District of Platte County, Missouri. (h) Such other records and instruments of the City and the Tax increment Financing Commission of the City of Riverside, Missouri together with applicable certificates and such other documents as I deem relevant in rendering this opinion. Based upon such examination, it is our opinion that: 1. The City is a city of the fourth class and political subdivision of the State of Missouri, has all necessary power to carry on its present business, has full power, right and authority to enter into the documents described in paragraphs (b) through (g) above (the "City Documents") and to perform each and all of the matters and things herein and therein provided for. 2. The Authorizing Ordinance authorizing the execution and delivery of the City Documents was duly passed pursuant to all applicable laws and is in full force and effect. The execution, delivery and performance by the City of the City Documents has been duly authorized by all necessary action, and the City Documents constitute legal, valid and binding obligations of the City enforceable in accordance with their terms, except to the extent that enforceability may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally. The City has approved the Official Statement and its use and distribution. 3. The execution, delivery and performance by the City of the City Documents does not and will not violate (a) any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award as currently in effect to which the City is subject; (b) result in a breach of or constitute a default under the provisions of any indenture, loan or credit agreement or any other agreement, lease or instrument to which the City may be or is subject or by which it, or its property, is bound; or (c) result in, or require, the creation or imposition of any mortgage, deed of trust, assignment, pledge, lien, security interest or other charge or encumbrance of any nature or with respect to any of the properties of the City other than as provided therein. 4. The City has taken all necessary action in connection with (a) the approval of the TIF Redevelopment Plan and the Redevelopment Area (as those terms are defined in the Official Statement dated October 19, 2017 related to the Bonds the "Official Statement"), and (b) the adoption of tax increment financing with respect to the Redevelopment Area in the manner described in the Official Statement. 5. No authorizations, consents, approvals, licenses, exemptions of or filings or registrations with any governmental commission, city, bureau, agency or instrumentality, domestic or foreign, or otherwise is necessary for the valid execution, delivery and performance by the City of the City Documents. 6. There is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body pending or, to our knowledge, threatened against or affecting the City, (a) wherein an unfavorable decision, ruling or finding would materially adversely affect the transactions contemplated by, or the validity of the City Documents, or any agreement or instrument to which the City is a party and which is used or contemplated for use in the consummation of the transactions contemplated by the City Documents, or (b) which in any way contests the existence, organization or powers of the City or the titles of the officers of the City to their respective offices. 7. Nothing has come to our attention which leads us to believe that the information in the Official Statement under the captions "INTRODUCTORY STATEMENT - The City," "THE CITY," "PLAN OF FINANCING — The Project — The Redevelopment Plan — Development East of Horizons Parkway, - Development West of Horizons Parkway," "LITIGATION — The City," and "APPENDIX A — Information Concerning the City of Riverside, Missouri," as of the date hereof, and the information contained in the Preliminary Official Statement under the captions "INTRODUCTORY STATEMENT - C-2 The City," "THE CITY," "PLAN OF FINANCING — The Project -- The Redevelopment Plan — Development East of Horizons Parkway, - Development West of Horizons Parkway," "LITIGATION — The City," and "APPENDIX A — Information Concerning the City of Riverside, Missouri," as of its date, contains or contained any untrue statement of a material fact or omits or omitted to state any material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. The City has approved the Official Statement and its use and distribution. Very truly yours, C-3 EXHIBIT D TO THE BOND PURCHASE AGREEMENT Form of Authority Counsel Opinion November 1, 2017 The Industrial Development Authority of the Stifel Nicolaus & Company, Incorporated City of Riverside, Missouri St. Louis, Missouri Riverside, Missouri City of Riverside, Missouri Riverside, Missouri UMB Bank, N.A., as Trustee Kansas City, Missouri Re: $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons infrastructure Project) Series 2017 Ladies and Gentlemen: We have acted as counsel for The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") and, as such, in connection with the issuance and sale of the above -referenced Bonds, we have examined the following: (i} Minutes of the meetings and resolutions of the Authority; (ii) Bond Trust Indenture dated as of November 1, 2017 (the "Indenture") between the Authority and UMB Bank, N.A., as Trustee (the "Trustee"); (iii) Financing Agreement dated as of November 1, 2017 (the "Financing Agreement") between the Authority and the City of Riverside, Missouri, a city of the fourth class and political subdivision of the State of Missouri (the "City"); (iv) Tax Compliance Agreement dated as of November 1, 2017 among the Authority, the City and the Trustee; (v) Bond Purchase Agreement dated October 19, 2017 among the Authority, the City and Stifel, Nicolaus & Company, Incorporated, as Underwriter; (vi) Cooperation Agreement dated January 12, 2017 (the "Cooperation Agreement") among the Authority, the City, the Trustee, Platte County, Missouri and the Riverside-Quindaro Bend Levee District of Platte County, Missouri; and (vii) Such other records and instruments of the Authority together with applicable certificates and such other documents as we deem relevant in rendering this opinion. Based upon such examination, it is our opinion that: 1. The Authority is a body politic and corporate and a public instrumentality duly organized and existing under the Industrial Development Corporations Act, Chapter 349 of the Revised Statutes of Missouri, as amended, has all necessary power to carry on its present business, has full power, right and authority to enter into the documents described in paragraphs (ii) through (vi) above (the "Authority Documents"), to issue the Bonds, to secure the Bonds in the manner contemplated by the Indenture and to perform each and all of the matters and things herein and therein provided for. 2. The Resolution of the Authority, adopted on October 3, 2017 (the "Resolution") with respect to the Bonds and the Authority Documents, was adopted pursuant to all applicable laws. The execution, delivery and performance by the Authority of the Authority Documents and the issuance of the Bonds have been duly authorized by all necessary action, and the Authority Documents and the Bonds constitute legal, valid and binding obligations of the Authority enforceable in accordance with their terms, except to the extent that enforceability may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally. 3. The execution, delivery and performance by the Authority of the Bonds and the Authority Documents does not and will not violate (a) any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award as currently in effect to which the Authority is subject; (b) result in a breach of or constitute a default under the provisions of any indenture, loan or credit agreement or any other agreement, lease or instrument to which the Authority may be or is subject or by which it, or its property, is bound; or (c) result in, or require, the creation or imposition of any mortgage, deed of trust, assignment, pledge, lien, security interest or other charge or encumbrance of any nature or with respect to any of the properties of the Authority other than as provided therein. 4. No authorizations, consents, approvals, licenses, exemptions of or filings or registrations with any governmental commission, board, bureau, agency or instrumentality, domestic or foreign, or otherwise is necessary to the issuance of the Bonds by the Authority or to the valid execution, delivery and performance by the Authority of the Authority Documents. 5. There is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body pending or, to our knowledge, threatened against or affecting the Authority, (a) wherein an unfavorable decision, ruling or finding would materially adversely affect (i) the transactions contemplated by, or the validity of, the Authority Documents or the Bonds, or (ii) the tax-exempt status of the interest on the Bonds, or (b) which in any way contests the existence, organization or powers of the Authority or the titles of the officers of the Authority to their respective offices. 6. Nothing has come to our attention which leads us to believe that the information in the Official Statement under the captions "INTRODUCTORY STATEMENT - The Authority," "THE AUTHORITY," and "LITIGATION — The Authority," as of the date hereof, and the information contained in the Preliminary Official Statement under the captions "INTRODUCTORY STATEMENT - The Authority," "THE AUTHORITY," and "LITIGATION -- The Authority," as of its date, contains or contained any untrue statement of a material fact or omits or omitted to state any material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. Very truly yours, D-2 EXHIBIT E TO THE BOND PURCHASE AGREEMENT Form of Purchaser Counsel Opinion November 1, 2017 Stifel, Nicolaus & Company, Incorporated St. Louis, Missouri Re: $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 Ladies and Gentlemen: We have acted as counsel to Stifel, Nicolaus & Company, Incorporated, the underwriter (the "Underwriter") of the above -captioned bonds (the "Bonds"), in connection with the Underwriter's purchase of the Bonds pursuant to the Bond Purchase Agreement dated October 19, 2017 (the "Bond Purchase Agreement') among the Underwriter, The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") and the City of Riverside, Missouri (the "City"). Capitalized terms used in this letter and not otherwise defined herein shall have the meanings given such terms in the Bond Purchase Agreement. This letter is being delivered pursuant to Section 3(d)(1)(ee) of the Bond Purchase Agreement. For purposes of this letter, we have assumed, without investigation: (1)the legal capacity of each natural person; (2) the full power and authority of each person other than the Underwriter and its officers to execute, deliver and perform each document heretofore executed and delivered or hereafter to be executed and delivered, and to do each other act heretofore done or hereafter to be done by such person; (3) the due authorization, execution and delivery by each person other than the Underwriter and its officers of each document heretofore executed and delivered or hereafter to be executed and delivered by such person; (4) the legality, validity, binding effect and enforceability as to each person other than the Underwriter and its officers of each document heretofore executed and delivered or hereafter to be executed and delivered (including, without limitation, the Continuing Disclosure Agreement, as defined below), and of each other act heretofore done or hereafter to be done by such person; (5) the genuineness of each signature on and the completeness of each document submitted to us as an original; (6) the conformity to the original of each document submitted to us as a copy; (7) the authenticity of the original of each document submitted to us as a copy; (8) no modification of any provision of any document nor waiver of any right or remedy; (9) no exercise of any right or remedy other than in a commercially reasonable and conscionable manner and in good faith; (10) that all covenants and requirements of the Bond Purchase Agreement have been, and will be, duly complied with and fulfilled and that all representations of fact made in the Bond Purchase Agreement, the Indenture, as defined below, and the Continuing Disclosure Agreement are true and correct; (11) there has been no oral or written agreement, understanding, course of dealing or usage of trade that affects the rights and obligations of the parties with respect to the transactions entered into in connection with the issuance of the Bonds other than instruments and documents reviewed by us, and (12) there has been no mutual mistake of fact or misunderstanding, fraud, duress or undue influence. In connection with the delivery of this letter, we have examined the following: (a) The Preliminary Official Statement dated October 11, 2017 (the "Preliminary Official Statement") relating to the Bonds; (b) The Official Statement dated October 19, 2017 (the "Official Siatement") relating to the Bonds; (c) (i) the Bond Trust Indenture dated as of November 1, 2017 (the "Indenture") between the Authority and UMB Bank, N.A., as Trustee, (ii) the Continuing Disclosure Agreement dated as of November 1, 2017 (the "Continuing Disclosure Agreement'') between the City and UMB Bank, N.A., as Dissemination Agent, and (iii) the Bond Purchase Agreement; (d) Executed copies of the opinion letters of Gilmore & Bell, P.C., bond counsel and disclosure counsel; (e) Executed copy of the opinion letters of Spencer Fane LLP, counsel to the Authority and the City; and (f) Such other documents and matters of law as we have deemed necessary in order to render the opinions and make the statements set forth in this letter. Except as otherwise stated herein, as to factual matters, we have, with your consent, relied upon written or oral statements ofthe City, the Authority and others, including the representations and warranties of the City and the Authority in the Bond Purchase Agreement and the Continuing Disclosure Agreement. Based upon and subject to the foregoing, we are of the opinion that: 1. The Bonds are exempt from registration under the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended. 2. The Continuing Disclosure Agreement complies with the requirements of paragraph b(5) of Rule 15c2-12 of the Securities Exchange Act of 1934, as amended, in effect as of the date hereof. In accordance with our understanding with you, we have rendered legal advice and assistance to you in the course of your investigation with respect to the Preliminary Official Statement and the Official Statement. Rendering such assistance involved, among other things, discussions and inquiries concerning various legal documents and proceedings, including the City's past compliance with its continuing disclosure undertakings. Although we express no opinions regarding the Preliminary Official Statement or Official Statement, at your request, we advise you that, in the course of rendering such assistance, and although we have not undertaken to independently verify and assume no responsibility for the accuracy, completeness, fairness or sufficiency of the information in the Preliminary Official Statement or the Official Statement, nothing has come to our attention that leads us to reasonably believe that the information in the Preliminary Official Statement as of the date thereof, or the Official Statement as of the date thereof, contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, taken as a whole, not misleading (it being understood that we express no belief or opinion with respect to (i) any financial, numerical or statistical information included with or set forth in the Preliminary Official Statement or Official Statement or omitted therefrom, (ii) any estimates, projections, assumptions or expressions of opinion set forth in the Preliminary Official Statement or the Official Statement and (iii) information with respect to matters set forth in the Preliminary Official Statement and the Official E-2 Statement under the captions "THE SERIES 2017 BONDS — Book -Entry Only System," "CITY FINANCIAL SUMMARY," "LITIGATION," "TAX MATTERS," "Appendix B — Accountants' Report and Audited Financial Statements of the City of Riverside, Missouri for Fiscal Year Ended June 30, 2016" and "Appendix D — Form of Opinion of Bond Counsel.- In ounsel" In further accordance with our understanding with you, we express no opinion or belief with respect to the validity of the Bonds or the taxation thereof or of the interest thereon, and our expression of belief with respect to the Preliminary Official Statement and the Official Statement assumes the validity of the Bonds, all as set forth in the opinions of bond counsel referred to above. The statements expressed herein are based upon existing law as of the date hereof and we assume no obligation to supplement this letter if any applicable laws change after the date hereof or if we become aware of any facts that might change the statements expressed herein after the date hereof. 'Me statements expressed herein are limited to the laws of the United States. This letter is issued in the State of Missouri and is governed by the laws of the State of Missouri without reference to conflicts of law principles. By issuing this letter, Lewis Rice LLC (i) shall not be deemed to be transacting business in any other state or jurisdiction other than the State of Missouri and (ii) does not consent to the jurisdiction of any state other than the State of Missouri. Any claim or cause of action arising out of this letter or the opinions expressed herein must be brought in the State of Missouri. This letter is solely for the use of the addressee named above and may not (other than inclusion of this letter in the final bond transcript) be released to or relied upon by any other persons without our prior written approval. This letter is limited to the matters set forth herein, and to the documents referred to herein and does not extend to any other agreements, documents or instruments executed by any parties in connection with the issuance of the Bonds, and no other statements or opinions should be inferred beyond the matters expressly stated herein. Very truly yours, E-3 ESCROW LETTER OF INSTRUCTIONS November 1, 2017 Tony Hawkins UMB Bank, N.A., Kansas City, Missouri Attention: Corporate Trust Department Re: Escrow Instructions for outstanding amount of Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007A and Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007B of the Industrial Development Authority of the City of Riverside, Missouri Dear Tony: UMB Bank, N.A. (the "Bank") is presently the Trustee and Paying Agent with respect to the above - referenced bonds (separately, the "Series 2007A Bonds" and "Series 2007B Bonds" and collectively, the "Refunded Bonds"). The Bank is hereby advised that the City of Riverside, Missouri (the "City") and The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") have authorized the defeasance and redemption of all outstanding Refunded Bonds using the proceeds of its Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017 in the principal amount of $18,370,000 (the "Refunding Bonds") to be issued on or about November 1, 2017 as well as certain other available moneys. You are instructed to take such actions as may be necessary in order to effect the redemption and prepayment of said Refunded Bonds as described herein, including without limitation delivering notice to the owners of the Refunded Bonds in accordance with the Trust Indenture under which they were issued. You are further authorized and instructed to take such other action as may be necessary in order to effect the redemption and payment of said Refunded Bonds on December 1, 2017. As of the date hereof, the Authority and the City have deposited in trust with the Bank the amount of $19,744,107.29, which includes $18,370,000.00 from the proceeds of the Refunding Bonds and $1,000,000.00 from the funds and accounts established for the Refunded Bonds. The Bank shall hold and invest such funds as set forth in Exhibit A hereto. The instructions to redeem the Refunded Bonds shall become irrevocable. The holders of the Refunded Bonds are hereby given an express lien on and security interest in the securities and cash deposited with the Bank pursuant to this Letter until used and applied in accordance with this Letter. The securities and cash deposited with the Bank pursuant to this Letter are hereby pledged and assigned and shall be applied solely for the payment of the principal of, redemption premium, if any, and interest on the Refunded Bonds. On or prior to December 1, 2017, the Bank shall withdraw from the securities and cash deposited with the Bank pursuant to this Letter amounts equal to the principal of and interest on the Refunded Bonds being called and payable on such date and shall apply such money to the payment in full of the Refunded Bonds. The liability of the Bank to make the payment required by this paragraph shall be limited to the securities and cash deposited with the Bank pursuant to this Letter. -I- Upon the payment in full of the principal of and interest on the Refunded Bonds and all other amounts owing hereunder, any remaining securities and cash deposited with the Bank pursuant to this Letter shall be transferred to the trustee for the Refunded Bonds for deposit in the debt service fund established therefore. The Bank shall not be liable for any loss resulting from any investment, sale, transfer or other disposition made pursuant to this Letter in compliance with the provisions hereof. The Bank shall have no lien whatsoever on any of the cash or securities deposited with the Bank pursuant to this Letter for the payment of fees and expenses for services rendered by the Bank under this Letter or otherwise. The Bank shall not be liable for the accuracy of the calculations as to the sufficiency of the money to pay the Refunded Bonds. So long as the Bank applies the money as provided herein, the Bank shall not be liable for any deficiencies in the amounts necessary to pay the Refunded Bonds caused by such calculations. Notwithstanding the foregoing, the Bank shall not be relieved of liability arising from and proximate to its failure to comply fully with the terms of this Letter. If the Bank fails to account for any of the money received by it, said money shall be and remain the property of the City in trust for the holders of the Refunded Bonds, and, if for any reason such money is not applied as herein provided, the assets of the Bank shall be impressed with a trust for the amount thereof until the required application shall be made. The aggregate amount of the fees of the Bank and any costs and expenses of the Bank in connection with the deposit of cash and securities described in and created by this Letter and in carrying out any of the duties, terms or provisions of this Letter shall be paid after redemption of the Refunded Bonds prior to payment of any excess moneys to the City. Notwithstanding the preceding paragraph, the Bank shall be entitled to reimbursement from the City of reasonable out-of-pocket, legal or extraordinary expenses incurred in carrying out the duties, terms or provisions of this Letter, including but not limited to costs incurred for giving notice of redemption of the Refunded Bonds. Claims for such reimbursement may be made to the City and in no event shall such reimbursement be made from funds held by the Bank pursuant to this Letter. The City, to the extent permitted by law, hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and hold harmless the Bank and its respective successors, assigns, agents and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, at any time, the Bank (whether or not also indemnified against the same by the City or any other person under any other agreement or instrument) and in any way relating to or arising out of the duties described herein, the acceptance of the moneys deposited pursuant to this Letter by the Bank and any payment, transfer or other application of moneys by the Bank in accordance with the provisions of this Letter; provided however, that the City shall not be required to indemnify the Bank against its own negligence or willful misconduct. The indemnities contained in this Letter shall survive the termination of this Letter. -2- The Bank and its respective successors, assigns, agents, directors, officers, employees and servants shall not be held to any personal liability whatsoever, in tort, contract or otherwise, in connection with the execution and delivery of this Letter, the acceptance of the moneys deposited pursuant to this Letter by the Bank or any payment, transfer or other application of the money held by the Bank in accordance with the provisions of this Letter or by reason of any non -negligent act, omission or error of the Bank made in good faith in the conduct of its duties. The duties and obligations of the Bank shall be determined by the express provisions of this Letter. The Bank may consult with counsel who may or may not be counsel to the City, and in reliance upon the opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Bank shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering or omitting any action under this Letter, such matter may be deemed to be conclusively established by a certificate signed by an authorized officer of the City. [remainder ofpage intentionally left blank] -3- Very truly yours, I -1/ ?2 By. ; W"d-� - - lea leen Rase; Mayer Escrow Letter of Instructions -4- THE INDUSTRIAL DEVELOPMENT AUTHORITY RIVERSIDE, MISSOURI By: Title: President Escrow Letter of Instructions -5- By: Name: Douglas Hare 'Title: Senior Vice President L'scrow Letter of Instructions EDIT A TO LETTER OF INSTRUCTIONS TO REDEEM BONDS SECURITIES Security Type Principal Amount Interest Rate Maturity Date SLGS $19,744,107 0.99% 12/01/2017 CONTINUING DISCLOSURE AGREEMENT THIS CONTINUING DISCLOSURE AGREEMENT dated as of November 1, 2017 (the "Continuing Disclosure Agreement'), is executed and delivered by the City of Riverside, Missouri (the "City') and UMB Bank, N.A., as dissemination agent (the "Dissemination Agent"). RECITALS 1. This Continuing Disclosure Agreement is executed and delivered in connection with the issuance by The Industrial Development Authority of the City of Riverside, Missouri (the "Authority ") of $18,370,000 Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017 (the "Bonds"), pursuant to a Bond Trust Indenture dated as of November 1, 2017 (the "Bond Indenture"), between the Authority and UMB Bank, N.A., as bond trustee (the "Bond Trustee "). The proceeds of the Bonds are being made available by the Authority to the City pursuant to a Financing Agreement dated as of November 1, 2017, between the Authority and the City (the "Financing Agreement"). 2. The City and the Dissemination Agent are entering into this Continuing Disclosure Agreement for the benefit of the Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission. The City is the only "obligated person" (as defined by such rule) with responsibility for continuing disclosure, and the Authority has undertaken no responsibility with respect to any reports, notices or disclosures provided or required under this Continuing Disclosure Agreement, and has no liability to any person, including any Beneficial Owner of the Bonds, with respect to such rule. In consideration of the mutual covenants and agreements herein, the City and the Dissemination Agent covenant and agree as follows: Section 1. Definitions. In addition to the definitions set forth in the Bond Indenture, which apply to any capitalized term used in this Continuing Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report filed by the City pursuant to, and as described in, Section 2 of this Continuing Disclosure Agreement. "Authority " means The Industrial Development Authority of the City of Riverside, Missouri, and its successors and assigns or any body, agency or instrumentality succeeding to or charged with the powers, duties and functions of the Authority. "Beneficial Owner" means any Registered Owner of any Bonds and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Business Day" means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal corporate trust office or designated payment office of the Bond Trustee or the Dissemination Agent is located are required or authorized by law to remain closed, or (c) a day on which the Securities Depository or the New York Stock Exchange is closed. "Commission" means the Securities and Exchange Commission. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Fiscal Year" means the 12 -month period beginning on July 1 and ending on June 30 or any other 12 -month period selected by the City as the Fiscal Year of the City for financial reporting purposes. "Material Events" means any of the events listed in Section 3(a) of this Continuing Disclosure Agreement. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "Oficial Statement" means the Official Statement used in connection with the offer and sale of the Bonds. "Rule" means Rule 15c2 -12(b)(5) adopted by the Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "Underwriter" means the original underwriter of the Bonds required to comply with the Rule in connection with offering the Bonds. Section 2. Provision of Annual Reports. (a) The City shall, or shall cause the Dissemination Agent to, not later than the last day of the seventh month after the end of the City's Fiscal Year, commencing with the year ending June 30, 2017, file with the MSRB, through EMMA, the following financial information and operating data (the "Annual Report"): (1) The audited financial statements of the City for the prior Fiscal Year prepared in accordance with accounting principles generally accepted in the United States. If audited financial statements are not available by the time the Annual Report is required to be filed pursuant to this Section, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement relating to the Bonds, and the audited financial statements shall be filed in the same manner as the Annual Report promptly after they become available; and (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement, as described in Exhibit A, in substantially the same format contained in the final Official Statement. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the City is an "obligated person" (as defined by the Rule), which have been filed with the MSRB or the Commission. If the 2 document included by reference is a final official statement, it must be available from the MSRB on EMMA. The City shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the City's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3(d). (b) Not later than three (3) Business Days prior to the date specified in subsection (a) for providing the Annual Report to the MSRB, the City shall either (1) provide the Annual Report to the Dissemination Agent, with written instructions to file the Annual Report as specified in subsection (a), or (2) provide written notice to the Dissemination Agent that the City has filed the Annual Report with the MSRB. If the Annual Report is provided to the Dissemination Agent with instructions to file the Annual Report, the City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such information constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may rely conclusively on any such certificate of the City and shall have no independent duty to review such Annual Report. (c) If the Dissemination Agent has not received either an Annual Report with filing instructions and written certification of the City referred to in Section 2(b) or a written notice from the City that it has filed an Annual Report with the MSRB by the date required in subsection (a), the Dissemination Agent shall send a notice in a timely manner to the MSRB and the Underwriter in substantially the form attached as Exhibit B. (d) The Dissemination Agent shall, (1) notify the City each year, not later than 30 days prior to the date for providing the Annual Report to the MSRB, of the date on which its Annual Report must be provided to the Dissemination Agent or the MSRB, and (2) unless the City has filed the Annual Report with the MSRB, promptly following receipt of the Annual Report, instructions and written certification required in subsections (a) and (b) above, file the Annual Report with the MSRB and file a report with the City, the Authority and (if the Dissemination Agent is not the Bond Trustee) the Bond Trustee certifying that the Annual Report has been filed pursuant to this Continuing Disclosure Agreement and stating the date it was filed. (e) In addition to the foregoing requirements of this Section, the City agrees to provide copies of the most recent Annual Report to any requesting bondowner or prospective bondowner, but only after the same has been filed with the MSRB on EMMA. (f) The Annual Report shall be provided to the MSRB in such manner or format as prescribed by the MSRB. Section 3. Reporting of Material Events. (a) No later than 10 business days after the occurrence of any of the following events, the City shall give, or cause to be given, to the MSRB notice of the occurrence of any of the following events with respect to the Bonds ( "Material Events "): 3 (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions; the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax status of the Bond, or other material events affecting the tax status of the Bonds; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and, whether or not material, tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the City; (13) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, in each case if material; and (14) appointment of a successor or additional trustee or the change of name of the trustee, if material. (b) The Dissemination Agent shall, promptly after obtaining actual knowledge of the occurrence of any event that it believes may constitute a Material Event, contact the chief financial officer of the City or his or her designee or such other person as the City shall designate in writing to the Dissemination Agent from time to time, inform such person of the event, and request that the City promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to subsection (d). If in response to a request under this subsection (b), the City determines that the event does not constitute a Material Event, the City shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent whether or not to report the occurrence pursuant to subsection (d). For the purpose of this Continuing Disclosure Agreement, "actual knowledge" of the Material Events means knowledge by an officer of the Dissemination Agent with responsibility for matters related to the Bond Indenture or this Continuing Disclosure Agreement. (c) Whenever the City obtains knowledge of the occurrence of a Material Event, because of a notice from the Dissemination Agent pursuant to subsection (b) or otherwise, the City shall promptly report the occurrence to the MSRB pursuant to subsection (a), or notify and instruct the Dissemination Agent in writing to report the occurrence pursuant to subsection (d). (d) If the Dissemination Agent receives written instructions from the City to report the occurrence of a Material Event, the Dissemination Agent shall promptly file a notice of such occurrence in a timely manner with the MSRB, with a copy to the City. If the Bond Indenture provides that notice of either of the Material Events described in subsections (a)(8) or (9) be provided to the registered owners of affected Bonds, then notwithstanding the foregoing requirements of this subsection, notice of the Material Event need not be given under this subsection any earlier than the notice of the underlying event provided under the Indenture. 4 Section 4. Termination of Reporting Obligation. The City's obligations under this Continuing Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If the City's obligations under this Continuing Disclosure Agreement are assumed in full by some other entity, such person shall be responsible for compliance with this Continuing Disclosure Agreement in the same manner as if it were the City, and the City shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Bonds, the City shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3(d). Section 5. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Continuing Disclosure Agreement, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the City. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the City pursuant to this Continuing Disclosure Agreement. The initial Dissemination Agent is UMB Bank, N.A. If the City fails to comply with any provision of this Continuing Disclosure Agreement, the Dissemination Agent may, but shall not be required to, take any action at law or in equity to enforce the obligations of the City hereunder; provided, however, the Dissemination Agent shall not under any circumstances be required to use or advance its own money to enforce this Continuing Disclosure Agreement. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the City pursuant to this Continuing Disclosure Agreement or any and all costs, claims, liabilities, losses or damages whatsoever (including reasonable costs and fees of counsel, auditors or other experts), asserted or arising out of or in connection with the acceptance or administration of the Dissemination Agent's obligations under this Continuing Disclosure Agreement, except costs, claims, liabilities, losses or damages resulting from the negligence or willful misconduct of the Dissemination Agent. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Continuing Disclosure Agreement, the City and Dissemination Agent may not amend this Continuing Disclosure Agreement and no provision of this Continuing Disclosure Agreement may be waived, unless Bond Counsel or other counsel experienced in federal securities law matters provides the City with its written opinion that the undertaking contained in this Continuing Disclosure Agreement, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Continuing Disclosure Agreement. In the event of any amendment or waiver of a provision of this Continuing Disclosure Agreement, the City shall (a) provide notice of such amendment or waiver in the same manner as for a Material Event under Section 4 of this Continuing Disclosure Agreement, and (b) describe such amendment or waiver in the next Annual Report. Both the notice of amendment or waiver and the description of any amendment or waiver in the next Annual Report required pursuant to (a) and (b) in the preceding sentence, respectively, shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this Continuing Disclosure Agreement shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Continuing Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Continuing Disclosure Agreement. If the City chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is specifically required by this Continuing Disclosure Agreement, the City shall have no obligation under this Continuing Disclosure Agreement to update such information or include it in any future Annual Report, as the case may be, or notice of occurrence of a Material Event. Section 8. Default. If there is a failure of the City or the Dissemination Agent to comply with any provision of this Continuing Disclosure Agreement, the Underwriter or any Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the City or the Dissemination Agent, as the case may be, to comply with its obligations under this Continuing Disclosure Agreement. A default under this Continuing Disclosure Agreement shall not be deemed an event of default under the Bond Indenture or the Financing Agreement, and the sole remedy under this Continuing Disclosure Agreement if there is any failure of the City or the Dissemination Agent to comply with this Continuing Disclosure Agreement shall be an action to compel performance. If the Underwriter or any Beneficial Owner of the Bonds requests the Dissemination Agent to enforce the obligations of the Issuer under this Continuing Disclosure Agreement, the Dissemination Agent shall not be required to take any action unless and until it has received written indemnity with respect to taking such enforcement action, in form and substance satisfactory to the Dissemination Agent, from such persons as in the sole judgment of the Dissemination Agent are acceptable to it. Section 9. Duties and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Continuing Disclosure Agreement, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent shall not be responsible the City's failure to submit a complete Annual Report to the MSRB. The Dissemination Agent is not responsible for ensuring the compliance with any rule or regulation of the City or Underwriter in connection with the filings of information herein but is merely responsible for the filing of any such information provided to the Dissemination Agent by the City. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent 0 and payment of the Bonds. The City shall pay the fees, charges and expenses of the Dissemination Agent in connection with its administration of this Continuing Disclosure Agreement. Section 10. Notices. Any notices or communications to or among any of the parties to this Continuing Disclosure Agreement may be given by registered or certified mail, return receipt requested, or by facsimile or by e- mail, receipt confirmed by telephone, or delivered in person or by overnight courier, and will be deemed given on the second day following the date on which the notice or communication is so mailed, as follows: To the City: City of Riverside, Missouri City Hall 2950 NW Vivion Road Riverside, Missouri 64150 Attention: Director of Finance To the Dissemination Agent: UMB Bank, N.A., as Trustee 1010 Grand Boulevard, 41 Floor Kansas City, Missouri 64106 Attention: Corporate Trust Department Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent. Section 11. Beneficiaries. This Continuing Disclosure Agreement shall inure solely to the benefit of the Authority, the City, the Bond Trustee, the Dissemination Agent, the Underwriter, and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Section 12. Severability. If any provision in this Continuing Disclosure Agreement, the Bond Indenture, the Financing Agreement or the Bonds shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 13. Counterparts. This Continuing Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 14. Electronic Transactions. The arrangement described herein may be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. 7 Section 15. Governing Law. This Continuing Disclosure Agreement shall be governed by and construed in accordance with the laws of the State of Missouri. [Remainder of page intentionally blank.] IN WITNESS WHEREOF, the City and the Dissemination Agent have caused this Continuing Disclosure Agreement to be executed as of the day and year first above written. CITY OF RIVERSIDE, MISSOURI UMB BANE, N.A., as Dissemination Agent By: Title:7Aut�horized 0 M IW4 I 111.31 W FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The financial information and operating data contained in the tables set forth under the following headings in Appendix A of the final Oficial Statement: 1. THE CITY — GENERAL - - Economic Information - - Commerce, Industry and Employment; 2. CITY DEBT STRUCTURE - - Long -Term Indebtedness; 3. FINANCIAL INFORMATION CONCERNING THE CITY - - Sources of Revenue; 4. FINANCIAL INFORMATION CONCERNING THE CITY - - City's Financial Relationship with Argosy Casino; 5. FINANCIAL INFORMATION CONCERNING THE CITY - - Retail Sales Tax; and 6. PROPERTY TAX - - Property Valuations - - History of Property Valuation. IW40.11I W1 NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: The Industrial Development Authority of the City of Riverside, Missouri Name of Bond Issue: $18,370,000 Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017 Name of Obligated Person: City of Riverside, Missouri Date of Issuance: November 1, 2017 NOTICE IS HEREBY GIVEN that City has not filed an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Agreement dated as of November 1, 2017, between the City and UMB Bank, N.A., as Dissemination Agent. [The Obligated Person has informed the Dissemination Agent that the Obligated Person anticipates that the Annual Report will be filed by Dated: UMB BANK, N.A., as Dissemination Agent on behalf of CITY OF RIVERSIDE, MISSOURI cc: City of Riverside, Missouri RESOLUTION AUTHORIZING THE ISSUANCE OF INDUSTRIAL DEVELOPMENT REFUNDING REVENUE BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT — CITY OF RIVERSIDE, MISSOURI), SERIES 2017, IN A PRINCIPAL AMOUNT NOT EXCEEDING $19,500,000; AND AUTHORIZING AND APPROVING CERTAIN DOCUMENTS AND ACTIONS IN CONNECTION WITH THE ISSUANCE OF SAID BONDS. WHEREAS, The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") is authorized and empowered under Chapter 349, inclusive of the Revised Statutes of Missouri, as amended (the "Act") to issue its bonds for the purpose of providing funds to purchase, construct, extend and improve a "project" (as defined in the Act); WHEREAS, at the request of the City of Riverside, Missouri, a fourth class city and political subdivision of the State of Missouri (the "City"), the Authority has agreed to issue its Industrial Development Refunding Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2017, in a principal amount of not to exceed $19,500,000 (the "Bonds"), pursuant to the hereinafter described Indenture, for the purpose of providing financing to the City pursuant to the hereinafter described Financing Agreement, to, together with other legally available funds, (a) refinance costs associated with an infrastructure project in the City (the "Project"), by providing for the refunding of the Authority's (i) Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007A (the "Series 2007A Bonds"), and (ii) Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007B (the "Series 2007B Bonds," and together with the Series 2007A Bonds, the "Prior Bonds"), (b) fund a debt service reserve fund related to the Bonds, and (c) pay certain costs related to the issuance of the Bonds; and WHEREAS, the Authority is authorized under the Act to issue its bonds for the purposes aforesaid and the Authority has determined that the public interest will be best served and that the purposes of the Act can be more advantageously obtained by the Authority's issuance of the Bonds in order to loan funds to the City under the Financing Agreement as a means of accomplishing the foregoing; and WHEREAS, the Authority further finds and determines that it is necessary and desirable in connection with the issuance of the Bonds that the Authority execute and deliver certain documents and that the Authority take certain other actions as herein provided. NOW, THEREFORE, BE IT RESOLVED BY THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI, AS FOLLOWS: Section 1. Findings and Determinations. The Authority hereby makes the following findings and determinations with respect to the City, the Project and the Bonds to be issued by the Authority, based upon representations made to the Authority: (a) The City has properly requested the Authority's assistance in refinancing the Project, and refunding the Prior Bonds; (b) The issuance of the Bonds for the purpose of providing funds to refinance the Project and refund the Prior Bonds is in the public interest and in furtherance of the purposes of the Act; and Section 2. Authorization of the Bonds. In order to obtain funds to provide to the City to be used for the purposes aforesaid, the Authority is hereby authorized to issue the Bonds subject to the following restrictions: (a) The maximum principal amount of the Bonds shall not exceed $19,500,000; (b) The True Interest Cost of the Bonds as computed by the City's financial advisor shall not exceed 3.15%; (c) The weighted average maturity of the Bonds as computed by the Underwriter shall be between 3.25 years and 5.25 years; (d) The final maturity date of the Bonds shall be not later than May 1, 2026; (e) The Underwriters' discount shall not exceed 1.0% of the principal amount of the Bonds; (f) The refunding the Refunded Bonds, shall result in a net present value savings as computed by the City's financial advisor of at least 3.0%; and (g) The Bonds shall not be subject to optional redemption prior to maturity. The final terms of the Bonds shall be specified in the Indenture upon the execution thereof, and the signatures of the officers of the Authority executing the Indenture shall constitute conclusive evidence of their approval and the Authority's approval thereof. Section 3. Bonds as Limited Obligations. The Bonds and the interest thereon shall be special, limited obligations of the Authority payable solely out of the revenues derived by the Authority from the Financing Agreement, and such revenues shall be pledged and assigned to the Trustee named below as security for the payment of the Bonds as provided in the Indenture. THE BONDS DO NOT CONSTITUTE A GENERAL OBLIGATION OF THE AUTHORITY OR THE CITY AND DO NOT CONSTITUTE AN INDEBTEDNESS OF THE AUTHORITY, THE CITY, THE STATE OF MISSOURI (THE "STATE") OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWERS OF THE AUTHORITY, THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE BONDS. THE ISSUANCE OF THE BONDS SHALL NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE THE AUTHORITY, THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF TO LEVY ANY FORM OF TAXATION THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT. THE AUTHORITY HAS NO TAXING POWER. Section 4. Authorization and Approval of Documents. The following documents are hereby approved in substantially the forms presented to and reviewed by the Authority at this meeting (copies of which documents shall be filed in the records of the Authority), and the Authority is hereby authorized to execute and deliver each of such documents to which the Authority is a party (the -2- "Authority Documents") with such changes therein as shall be approved by the officers of the Authority executing such documents, such officers' signatures thereon being conclusive evidence of their approval and the Authority's approval thereof: (a) Bond Trust Indenture dated as of the date set forth therein (the "Indenture"), between the Authority and UMB Bank, N.A. (the "Trustee"), providing for the issuance thereunder of the Bonds and setting forth the terms and provisions applicable to the Bonds, including a pledge and assignment by the Authority of the Trust Estate to the Trustee for the benefit and security of the owners of the Bonds upon the terms and conditions as set forth in the Indenture; (b) Financing Agreement dated as of the date set forth therein (the "Financing Agreement"), between the Authority and the City under which the Authority will make the proceeds from the sale of the Bonds available to the City for the purposes herein described in consideration of payments which will be sufficient to pay the principal of, redemption premium, if any, purchase price and interest on the Bonds; (c) Tax Compliance Agreement dated as of the date set forth therein (the "Tax Compliance Agreement"), among the Authority, the City and the Trustee, entered in order to set forth certain representations, facts, expectations, terms and conditions relating to the use and investment of the proceeds of the Bonds, to establish and maintain the exclusion of interest on the Bonds from gross income for federal income tax purposes, and to provide guidance for complying with the arbitrage rebate provisions of Code § 148(f); (e) Bond Purchase Agreement dated the date set forth therein (the "Bond Purchase Agreement"), among the Authority, the City and Stifel, Nicolaus & Company Inc. (the "Underwriter"), entered into in connection with the sale of the Bonds by the Underwriter. Section 5. Approval of Preliminary Official Statement; Preliminary Official Statement Deemed Final. The Preliminary Official Statement and the final Official Statement, in substantially the form of the Preliminary Oficial Statement with such changes and additions thereto as are necessary to conform to and describe the transaction, and the public distribution of the same by the Underwriter are hereby approved for use in connection with the Bonds. The Authority has not participated in the preparation of the Preliminary Official Statement or in the final Official Statement and has not verified the accuracy of the information therein, other than information respecting the Authority under the captions "THE AUTHORITY" and "LITIGATION—The Authority." Accordingly, such approvals do not constitute approval by the Authority of such information or a representation by the Authority as to the completeness or accuracy of the information contained therein. For the purpose of enabling the Underwriter to comply with the requirements of Rule 15c2 -12(b)(1) of the Securities and Exchange Commission, the Authority hereby deems the information regarding the Authority contained in the Preliminary Official Statement under the captions "THE AUTHORITY" and "LITIGATION—The Authority" to be "final" as of its date, except for the omission of such information as is permitted by Rule 15c2 -12(b)(1), and the appropriate officers of the Authority are hereby authorized, if requested, to provide the purchaser a letter or certification to such effect and to take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the purchaser to comply with the requirements of such Rule. Section 6. Execution of Bonds and Documents. The President or Vice President of the Authority is hereby authorized and directed to execute the Bonds by manual or facsimile signature and to -3- deliver the Bonds to the Trustee for authentication for and on behalf of and as the act and deed of the Authority in the manner provided in the Indenture, The President or Vice President of the Authority is hereby authorized and directed to execute, deliver and/or endorse the Authority Documents for and on behalf of and as the act and deed of the Authority. The Secretary or Assistant Secretary of the Authority is hcreb�,f authorized and directed to attest to the Bands bw manual or facsimile si , atur" the Authoritiv- Documents and to such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Resolution. Section 7. Further Authority. The Authority shall, and the officers, agents and employees of the Authority are hereby authorized and directed to, take such further action, and execute such other documents, certificates and instruments, including, without limitation, any credit enhancement, liquidity and security documents, arbitrage certificate, closing certificates and tax forms, as may be necessary or desirable to carry out and comply with the intent of this Resolution, and to carry out, comply with and perform the duties of the Authority with respect to the Bonds and the Authority Documents. Section 8. Effective Date. This Resolution shall take effect and be in full force immediately after its adoption by the Authority. Adopted by The Industrial Development Authority of the City of Riverside, Missouri, this 3rd day of October, 2017, W THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI President EXCERPT OF MINUTES OF BOARD MEETING The Board of Directors of The Industrial Development Authority of the City of Riverside, Missouri, met in special session on Tuesday, October 3, 2017, at 5:30 p.m. The meeting was held at City Hall, 2950 N.W. Vivion Road, Riverside, Missouri. The following members and officers of the Board of Directors were present or absent at the meeting as follows: Name Leland Finley Frank Biondo Harold Snoderley Jason Rule Art Homer Title President and Director Vice President and Director Secretary and Director Treasurer and Director Director Present/Absent Absent Present Present Present Present The President declared that a quorum was present and called the meeting to order. (Other Proceedings) The matter of approving the issuance by the Authority of its "Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017" in an aggregate principal amount not exceeding $19,500,000, for the purpose of refinancing the costs of a prior infrastructure project for the City of Riverside, Missouri, was considered and discussed. Thereupon, Director Biondo presented and moved the adoption of a Resolution entitled as follows: RESOLUTION AUTHORIZING THE ISSUANCE OF INDUSTRIAL DEVELOPMENT REFUNDING REVENUE BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT — CITY OF RIVERSIDE, MISSOURI), SERIES 2017, IN A PRINCIPAL AMOUNT NOT EXCEEDING $19,500,000; AND AUTHORIZING AND APPROVING CERTAIN DOCUMENTS AND ACTIONS IN CONNECTION WITH THE ISSUANCE OF SAID BONDS. The motion for the adoption of the foregoing Resolution was seconded by Director Snoderley. Thereupon, said Resolution was read and considered, section by section and as a whole, and, the motion being put to a roll call vote, the following vote was recorded: Aye: Biondo, Snoderley, Homer. Nay: Rule. Absent: Finley. The President declared that the motion for the adoption of the Resolution had carried and that the Resolution had been duly adopted. (Other Proceedings) [Remainder of page intentionally blank.] 59-a There being no further business to come before the Board, • motion duly made, seconded and carried by unanimous vote, the meeting was adjourned. 0 Excerpt of Minutes — Autbority IDA Riverside (Horizons Project), Series 2017 WAIVER OF NOTICE OF SPECIAL MEETING We, the undersigned, being all of the members of the Board of Directors of The Industrial Development Authority of the City of Riverside, Missouri, hereby waive any and all notice of the time, place and purposes of the special meeting of the Board of Directors, to be held at City Hall in Riverside, Missouri, at 5:30 p.m. on October 3, 2017, and consent and agree that said Board of Directors shall meet at said time and place and consent to the transaction of any and all business that may come before such meeting. DATED: October-> 1, 2017. Director Director Director Director Director AUTHORITY'S CLOSING CERTIFICATE AND INSTRUCTIONS TO THE TRUSTEE We, the undersigned, hereby certify that we are the duly appointed, qualified and acting President and Secretary, respectively, of The Industrial Development Authority of the City of Riverside, Missouri (the "Authority"), and as such officers we are familiar with the official books and records of the Authority. In connection with the issuance by the Authority of $18,370,000 principal amount of Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017 (the "Bonds"), we hereby further certify as follows, as of November 1, 2017: 1. ORGANIZATION AND AUTHORITY 1.1. Due Organization. The Authority is a body politic and corporate and a public instrumentality duly organized and existing under the Industrial Development Corporations Act, Chapter 349 of the Revised Statutes of Missouri, as amended (the "Act"). 1.2. Articles of Incorporation and Bylaws. The copy of the Articles of Incorporation of the Authority attached hereto as Exhibit A is a true, complete and correct copy of said Articles of Incorporation, as certified by the Secretary of State of Missouri, and said Articles of Incorporation have not been further amended and are in full force and effect as of the date hereof. The copy of the Bylaws of the Authority attached hereto as Exhibit B is a true, complete and correct copy of the Bylaws of the Authority, as amended, and said Bylaws have not been further amended and are in full force and effect as of the date hereof Ind were in full force and effect on the date of the meeting of the Authority referred to in paragraph 1.3 below. A certificate of corporate good standing of the Authority in Missouri certified by the Secretary of State of Missouri is attached hereto as Exhibit C. 1.3. Meetings. All meetings of the Authority as shown in the Transcript (as hereinafter defined) were regular meetings, or were meetings held pursuant to regular adjournment at the next preceding meeting, or were special meetings duly called as shown in the Transcript, and each such meeting was duly held, was open to the public at all times and a quorum was present throughout. 1.4. Incumbency of Officers. The following named persons were and are the duly appointed, qualified and acting officers and directors of the Authority at all times during the proceedings relating to the authorization and issuance of the Bonds at and during the times indicated as follows: Name Leland Finley Frank Biondo Harold Snoderley Jason Rule Art Homer Title President and Director Vice President and Director Secretary and Director Treasurer and Director Director 2. BOND TRANSCRIPTS AND LEGAL DOCUMENTS 2.1. Transcript of Proceedings. The transcript of proceedings (the "Transcript") relating to the authorization and issuance of the Bonds includes a true and correct copy of the proceedings had by the Authority and other records, proceedings and documents relating to the issuance of the Bonds; said Transcript is, to the best of our knowledge, information and belief, full and complete; the proceedings of the Authority shown in said Transcript have not been modified, amended or repealed and are in full force and effect as of the date hereof. 2.2. Execution of Documents. The following documents have been duly executed and delivered in the name and on behalf of the Authority by its duly authorized officers, pursuant to and in full compliance with a Resolution (the "Resolution") adopted by the Authority at a duly held meeting thereof as shown in the Transcript; the copies of said documents contained in the Transcript are true, complete and correct copies or counterparts of said documents as executed and delivered by the Authority, and are in substantially the same form and text as the copies of such documents which were before the Authority and approved by the Resolution; and said documents have not been amended, modified or rescinded and remain in full force and effect as of the date hereof. (a) Bond Trust Indenture dated as of November 1, 2017 (the "Indenture"), between the Authority and UMB Bank, N.A., as Trustee (the "Trustee"); (b) Financing Agreement dated as of November 1, 2017 (the "Financing Agreement"), between the Authority and the City of Riverside, Missouri, a city of the fourth class and political subdivision of the State of Missouri (the "City"); (c) Tax Compliance Agreement dated as of November 1, 2017 (the "Tax Compliance Agreement"), among the Authority, the City and the Trustee; (d) Bond Purchase Agreement dated October 19, 2017 (the "Bond Purchase Agreement"), among the Authority, the City and Stifel, Nicolaus & Company, Incorporated, as underwriter for the Bonds (the "Underwriter"); and (e) Escrow Letter of Instructions dated as of November 1, 2017 (the "Escrow Agreement"), among the Authority, the City and UMB Bank, N.A., as paying agent for the Refunded Bonds (as defined in the Indenture). The Indenture, the Financing Agreement, the Tax Compliance Agreement, the Bond Purchase Agreement and the Escrow Agreement are sometimes collectively referred to herein as the "Authority Documents." 2.3. Documents Authorized and Binding. The Authority has, by all necessary action, duly authorized the execution, issuance and delivery of the Bonds, and the execution, delivery, receipt and due performance of the Authority Documents and any and all such other agreements and documents as may be required to be executed, delivered and received by the Authority in order to carry out, give effect to and consummate the transactions contemplated by the Oficial Statement (as hereinafter defined), the Authority Documents and the Resolution. The Bonds and the Authority Documents, as executed and delivered, and the Resolution, as adopted, constitute legal, valid and binding obligations of the Authority in accordance with their respective terms (except insofar as the enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws or equitable principles of general application affecting the rights and remedies of creditors and secured parties, and except as rights to indemnity, if any, may be limited by principles of public policy). 2.4. Execution of Bonds; Signatures and Seals. We have duly signed and executed the Bonds by manual or facsimile signatures in the aggregate principal amount of $18,370,000, consisting of one fully registered bond, and on the date when the Bonds were executed by us, we were and at the date hereof we are the officials indicated by our signatures on the Bonds and by our signatures on this Certificate, respectively. The signatures of us and each of us, as such officials, respectively, on the Bonds and on this -2- Certificate, are our true and genuine signatures, and the seal affixed on the Bonds at the time of their execution was and is the duly authorized and adopted official seal of the Authority and was thereto affixed by the authority and direction of the governing body of the Authority, and is the seal affixed to this Certificate. Affidavits containing the respective signatures of the President and Secretary, copies of which are attached hereto as Exhibit D, have been filed in the Office of the Secretary of State of Missouri pursuant to Section 105.274 of the Revised Statutes of Missouri, and we hereby ratify, confirm and adopt the facsimile signatures on the Bonds as a proper execution of said Bonds. 2.5. Representations in the Authority Documents. Each of the representations and warranties of the Authority made in the Authority Documents are true and complete in all material respects as of the date hereof as if made on and as of the date hereof, and all agreements to be complied with and obligations to be performed by the Authority under the Authority Documents on or prior to the closing date of the Bonds have been complied with and performed. 2.6. No Event of Default. At the date hereof, no Event of Default of the Authority specified in the Authority Documents, and no event which, with the giving of notice or the lapse of time or both, would become such an Event of Default of the Authority under the Authority Documents, has occurred. 2.7. Preliminary Official Statement and Official Statement, The Preliminary Official Statement and the Official Statement contained in the Transcript constitute full, true and correct copies of the Preliminary Official Statement and final Official Statement relating to the Bonds. To the best of our knowledge, in said Preliminary Official Statement and in the final Official Statement the Authority has not made an untrue statement of a material fact or omitted to state a material fact (except for the omission of such information in the Preliminary Official Statement as is permitted by Rule 15c2 -12(b)(1) of the Securities and Exchange Commission) necessary in order to make the statements made under the captions "THE AUTHORITY" and "LITIGATION - The Authority" therein, in the light of the circumstances under which they were made, not misleading. As of this date no event has occurred which is necessary to be disclosed in the Preliminary Official Statement or the final Official Statement in order to make the statements under such captions not misleading in any material respect as of the date hereof. Notwithstanding the foregoing, the Authority has not made and does not make any representation or warranty (either express or implied) regarding the accuracy or completeness of any financial, technical or statistical data or any estimates, projections, assumptions or expressions of opinion set forth therein. 3. LEGAL MATTERS. 3.1. No Litigation. No litigation or proceeding is pending or to the knowledge of the undersigned threatened against the Authority in any court or administrative body contesting the validity, due authorization and execution of the Bonds or the Authority Documents, attempting to limit, restrain, enjoin or otherwise restrict or prevent the issuance, sale or delivery of the Bonds or the execution, delivery or performance of the Authority Documents or in any way questioning or affecting the authority for or the validity of the Bonds, the Authority Documents or the existence or powers of the Authority. 3.2. No Legal Violation. The execution and delivery of the Authority Documents, the performance of the terms thereof by the Authority and the issuance, sale and delivery of the Bonds will not violate any provision of Missouri law, or any resolution or ordinance of the Authority, or any applicable judgment, order, rule or regulation of any court or of any public or governmental agency or authority, and will not conflict with, violate or result in the breach of any of the provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Authority is a party, or by which it or its properties are bound. -3- 3.3. No Interested Officers. No officer, director or employee of the Authority is or shall be, either directly or indirectly, a party to or in any manner interested in any contract or agreement of the Authority with respect to the Bonds or the Project financed and refinanced thereby, or have a "substantial interest" (as defined in Section 105.450 of the Revised Statutes of Missouri, as amended), or otherwise as will be in violation of any provision of any state statute or any similar law regulating conflicts of interest by officers or employees of public agencies to which the Authority is subject. 3.4. Approvals. All approvals, consents, authorizations and orders required to be obtained by the Authority in connection with the issuance, sale and delivery of the Bonds and the execution and delivery of the Authority Documents and the performance of the terms thereof by the Authority have been duly obtained. 3.5 M.A.P. Filing Authorization. The Authority hereby authorizes Gilmore & Bell, P.C. to file the information required by Section 37.850 of the Revised Statutes of Missouri on the Missouri Accountability Portal website maintained by the State of Missouri Office of Administration. 4. INSTRUCTIONS TO THE TRUSTEE AND BOND REGISTRAR 4.1. Request to Authenticate and Deliver Bonds. The Trustee is hereby requested and authorized by the Authority to authenticate the Bonds in the aggregate principal amount of $18,370,000 and to deliver the Bonds to The Depository Trust Company for the Underwriter, upon payment to the Trustee for deposit as provided in Section 402 of the Indenture for the account of the Authority of the purchase price for the Bonds, computed as follows: Principal Amount of Bonds $18,370,000.00 Net Premium 1,767,404.35 Underwriting Discount ( 183,700.00) Total Purchase Price 19.953,704.35 [Remainder of page intentionally blank.] -4- Signature Official Title President Leland Finley Secretary Harold Srnode'rley [SEAL] -3- Authority's Closing Certificate IDA Riverside (Horizons Project), Series 2017 EXHIBIT A ARTICLES OF INCORPORATION l+ } ? + +y»??0m CORPORATION DIVISION +« «<flZ° »000048 iii.<e:!■;11 ; - » W4 - '.. documents on file and record in thisw office. TESTIMONYIN WHEREOF, I hereunto©—.m>z4 affixedcause to be ».G EA SEAL State , Missouri. Done » ».:<.t 5»+»o< »»<»<t: t October, 201 `ƒ\ 6U+ + CERT- 0272&% File Number: 200706411204 ,- L00800485 Date Filed: 03/02/2007 Robin Carnahan ARTICLES OF INCORPORATION Secretary of State OF THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI The undersigned, each being a natural person of the age of eighteen (18) years or more, for the purpose of forming and constituting a public corporation under Chapter 349 of the Revised Statutes of Missouri, as amended (the "Industrial Development Authority Act"), do hereby adopt, and make and execute, the following Artic 1 es of Incorporation. 1. The names and residences of the applicants are as follows: Names Residences Leland Finley 913 NW Valley Lane, Riverside, MO 64150 Cy Houston 4430 NW Indian Lane, Riverside, MO 64150 Bob Archer 3605 NW 50th Street, Riverside, MO 64150 2. Each applicant is an elector of and taxpayer in the City of Riverside, Missouri. 3. The name of this corporation shall be: THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI 4. The applicants have filed with the Board of Aldermen of the City of Riverside, Missouri, an application seeking permission to apply for the incorporation of this corporation and by appropriate resolution duly adopted, the Board of Aldermen of the City of Riverside, Missouri has found and determined that it is wise, expedient, necessary and advisable that this corporation be formed and have authorized the applicants to proceed to form this corporation and have approved these Articles of Incorporation. Accordingly, permission to organize this corporation has been granted by a resolution duly adopted by the Board of Aldermen of the City of Riverside, Missouri, the body in which the general legislative powers of Riverside, Missouri are vested. Such resolution is numbered 2007-04 and was adopted by the Board of Aldermen on February 20, 2007. 5. The address of the initial registered office in the State of Missouri is 2345 Grand, Suite 2000, Kansas City, Missouri 64108 and the name of the initial registered agent at said address is John McClelland. 6. The location of the principal office of this corporation is City Hall, 2950 NW Vivion, Riverside, Missouri 64150. state of Missouri liiiiiiiiiiiiiiiiiiiiMillillilimillilmilillillilI Q )ocuments and SettingAbmileAl-ocel Settingffemporary Internet Files\OLK I SMArticles of Incorporation - IDA (KO524193-2).DM 7. The purposes for which this corporation is organized are to develop, advance, encourage and promote, subject to the limitations imposed by the Industrial Development Authority Act, as amended from time to time, commercial, industrial, agricultural, recreational and other development as allowed under the Industrial Development Authority Act, as amended from time to time, all for the benefit of the City of Riverside, Missouri. Without limiting the generality of the foregoing, the purposes shall include the following. (a) To engage in planning, consulting, promotion, marketing, financing and other related community and economic development activities; and (b) To acquire, whether by purchase, exchange, gift, lease or otherwise, and to improve, maintain, equip and finnish one or more Projects (as defined in the Industrial Development Authority Act, as amended from time to time), including all real and personal properties which the board of directors of this corporation may deem necessary in connection therewith and regardless of whether or not any such Projects shall then be in existence; and (c) To do and perform any and all other things necessary or desirable with respect to a Project or Projects to the extent permitted by, or contemplated by, the Industrial Development Authority Act, as amended from time to time; and (d) In general, to carry on any other business in connection with each and all of the foregoing or incidental thereto; and (e) To have and exercise each and all of the powers and privileges, either direct or incidental, which are given and provided by or are available under the laws of the State of Missouri in respect of industrial development corporations. None of the purposes and powers specified in any of the paragraphs of this Article shall be many way limited or restricted by reference to or inference from the terms of any other paragraph, and the purposes and powers specified in each of the paragraphs of this Article shall be regarded as independent purposes and powers. The enumeration of specific purposes, and powers in this Article shall not be construed to restrict in any manner the general purposes and powers of this corporation, nor shall the expression of one thing be deemed to exclude another, although it be of like nature. The enumeration of purposes or powers herein shall not be deemed to exclude or in any way limit by inference any purposes or powers which this corporation has power to exercise, whether expressly by the laws of the State of Missouri, now or hereafter in effect, or impliedly by any reasonable construction of such laws. No part of the net earnings or other assets of this corporation shall inure to the benefit of any director, contributor, officer or other private individual, having directly or indirectly, any personal or private interest in the activities of this corporation. 8. Except as may be otherwise specifically provided by statute, or the Articles of Incorporation or the bylaws of this corporation, as from time to time amended, all powers of management, direction and control of this corporation shall be and hereby are vested in the Board of Directors. The Board of Directors of this corporation shall consist of five (5) directors, -2- each of whom shall be (a) a qualified elector of and taxpayer in the City of Riverside, Missouri and (b) a resident taxpayer in the City of Riverside, Missouri for at least one (1) year immediately prior to appointment. 9. The duration of this corporation shall be perpetual. 10. Neither the directors of this corporation nor any person executing any bonds or notes of this corporation shall be liable personally on such bonds or notes by reason of the issuance thereof. Bonds and notes issued by this corporation shall not be a debt of Riverside, Missouri, or the `State of Missouri and neither such city nor such state shall be liable thereon nor in any event shall such notes or bonds be payable out of any funds or properties other than those acquired for the purposes of the Industrial Development Authority Act and such bonds and notes shall not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. 11. (a) The bylaws of this corporation may from time to time be altered, amended, suspended or repealed, or new bylaws may be adopted, by resolution adopted by a majority of the full Board of Directors at meeting thereof. (b) This corporation may agree to the terms and conditions upon which any director, officer, employee or agent accepts his office or position and in its bylaws or otherwise may agree to indemnify and protect any director, officer, employee or agent to the extent permitted by the laws of Missouri. 12. Insofar as it is permitted under the laws of Missouri and except as may be otherwise provided by the bylaws of this corporation, no contract or other transaction between this corporation and any other firm or corporation shall be affected or invalidated solely by reason of the fact that any director or officer of, this corporation is interested in, or is a member, shareholder, director or officer of such other firm or corporation; and any director or officer of this corporation, individually or jointly with one or more other directors or officers of this corporation, may be a party to, or may be interested in, any contract or transaction of this corporation or in which this corporation is interested, and no such contract or transaction shall be invalidated thereby. 13. At such time as this corporation is dissolved or terminated, all assets of this corporation (except insofar as may be necessary for the proper winding up thereof) shall pass to and be vested in the City of Riverside, Missouri, subject, to the extent provided in the Industrial Development Authority Act, as amended from time to time, to the rights of bondholders, noteholders and other creditors of this corporation. No distribution shall be made which would violate the statutes of Missouri then in effect. The foregoing shall constitute the plan of distribution upon dissolution of this corporation. 14. This corporation reserves the right to alter, amend or repeal any provision contained in its Articles of Incorporation, subject to the approval of the Board of Aldermen of the City of Riverside, Missouri, in the manner now or hereafter prescribed by the statutes of Missouri and all rights and powers conferred herein are granted subject to this reservation. -3- IN WITNESS WHEREOF, these Articles of Incorporation have bees scribed and acknowledged by each of the undersigned applicants on this day of ZA 2007, before an officer authorized by the laws of Missouri totake acknowledgments to d- '. Leland Finley 01 C06usion rA BobArcher STATE OF MISSOURI COUNTY OF I, 4 4V11.5 e , a Notary Public, do hereby certify that on the day of , 2007, personally appeared before me, Leland Finley, Cy Houston and Bob Ar, er, who being by me first duly sworn, severally declared that they are the persons who signed the foregoing document as articles, and that the statements therein contained are true and acknowledged that they executed the same as their free - act and deed. L OMARLQ V iJBLtC• AtOiAstafee r- or, Expkes2";2e4 N Public C�mmISS1 n # 06484 (NOTARIAL SEAL) My Commission Expires:.0/,/"/ -4- State of Missouri �w Ty gyp, iM SFr Robin Carnalm Secretary of State WHEREAS,21 Articles of Incorporation of Z j° . have been received and filed in the Office of the Secretary of State, which articles, in all respects, comply with the requirements of the lava governing the formation of the Industrial Development Corporations in Missouri. NOW, THEREFORE, I, ROBIN CARNAHAN, Secretary of State of the State of Missouri, by virtue of the authority vested in me bylaw, do hereby cert and declare this entity a body corporate, daily organized dis date and that it is entitled to all rights and privileges granted corporations organized under the Industrial Development Corporation Lava. IN TESTIMONY WHEREOF, I hereunto set my hand and cause to be affimed the GREAT SEMI, of the State of Missouri Done at the City of Jefferson, this 2nd day of Larch„ 2007. A L M �-" �4. W � L�- � secre2aq ofstate EXIIIBIT B BYLAWS RESOLUTION NO. 2007-001 A RESOLUTION APPROVING AND ADOPTING THE YLAWS OF THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI. Pursuant to the provisions of Chapter 349, RSMo., as amendcqL the Board of Directors of The Industrial Development Authority of the City of Riverside, ' uri (the "IDA'j, hereby adopts this Resolution and directs that this Resolution be filed with the official IDA minutes: Armand Adof= of Bylaws RESOLVED, that the Bylaws heretofore submitted to and reviewed by the Directors are hereby approved and adopted as the Bylaws of The Industrial Development Authority of the City of Riverside, Missouri, and the Secretary shall cause a true copy of such Bylaws to be kept with the minutes of the meetings of the Board of Directors. ADOPTED THIS 21ST DAY OF MARCH, 2047. This Resolution was adopted at the first meeting of the Board of Directors of the IDA duly called and held this date. This Resolution shall be filed by the Secretary of the IDA with the minutes of the meetings of the Board of Directors. Effective Date: March 21, 2007. (SEAL) ATTEST. BYLAWS OF THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI ARTIM I OFFICE, RECORDS, SEAL 1. Princi I� Office. The principal office and location of the corporation shall be in the City of Riverside, Missouri, and shall be located at City Hall, 2950 NW Vivion Road, Riverside, Missouri 64150. 2. Records. The corporation shall keep correct and complete books and records of accoua and shall also keep minutes of the proceedings of the Board of Directors and each committee of the Board of Directors. The corporation shall keep at its principal office a record of the name and address of each director. 3. &d. The Board of Directors may adopt, and may alter at pleasure, a corporate seal, which shall have inscribed thereon the name of the corporation and the words: Corporate Seal --Missouri. The corporate seal may be used by causing it, or a facsimile thereof to be impressed or affixed or to be in any other manner reproduced ARTICLEH PURPOSES Pur== Stated in Articles. The purposes of this o mporation shall be those purposes stated in the Articles of Imorporation, as may be amended from time to time. -1- ARTICLE III 4 DIRECTORS 1. Powers. The property and affairs of the corporation sk all be managed, supervised and controlled by a Board of Directors. The Beard of Directors shall We and is invested with all and unlimited powers and authorities, except as it may be expressly limited by law, the Articles of Incorporation or these Bylaws, to supervise, control, direct and manage the property, affairs and activities of the corporation, to determine the policies of the corporation, to do or cause to be done any and all lawfai things for and on behalf of the corporation, to exercise or cause to be exercised any or all of its powers, privileges or franchises, and to seek the effectuation of its objects and purposes; provided, however, that (1) dw Board of Directors shall not authorize or permit the corporation to engage in any activity not permitted to be transected by the Articles of Incorporation or by an industrial development corporation organized under the laws of the State of Missouri, (2) none of the powers of the corporation shall be exercised to carry on activities, otherwise than as an insubstantial part of its activities, which are not in themselves in furtherance of the purposes of the corporation, and (3) all income and property of the corporation shall be applied exclusively for its purposes. No part of the net earnings or other assets of the corporation shall inure to the benefit of any director, officer, contributor, or other private individual, corporation or organization, having, directly or indirectly, a personal or private interest in the activities of the corporation. 2. Number and QWd&gr'ons. The member of directors of the corporation to constitute the Board of Directors shall be as provided from time to time in the Articles of Incorporation. Each director shall be a resident of qualified elector A and taxpayer in the City of Riverside, Missouri and shall have been so for at least one year immediately prior to said director's appointment. No director shall be an officer or employee of the City of Riverside, h issourL nor a member of the Board of Aldermen of the City of Riverside, Missouri. In the event that any director ceases to be a resident of, or an elector o£ or taxpayer in, the City of Riverside, Missouri, or shall become an officer or employee of the City of Riverside, h(imuri, or shall become a member of the Board of Aldermen of the City of Riverside, Missouri, then such director shall be deemed disqualified to be, and shall automatically cease to be, a member of the Board of Directors of this Corporation. -2- 3. gp gi=ent and Terms of OM_m a. Term of Directors. The directors shall be appointedthe chief executive officer with the advice and consent of a majority of the Board of Aldermen o the City of Riverside, Missouri and they shall be appointed so that they shall hold office for -staggered terms. At the time of the appointment of the first board of directors the governing body of the City of Riverside shall divide the directors into three groups c ontahmig as nearly equal whole numbers as may be possible. The term of the directors included in the first group shall be two years, the term of the directors included in the second group shall be four years, and the term of the directors in the third group shall be six years. b. N—Wficxction. Not less than sixty (60) days prior to the expiration of the term of office of any director, the secretary of the corporation shall, with respect to each director whose term will expire, notify in the manner hereinafter set forth the chief executive officer and Board of Aldermen of the City of Riverside, Missouri. A copy of such notice shall be distributed in the same manner that public notice is to be given under Article IV, Section 6, of these Bylaws. Such notice shall set forth the names of the persons whose terms are about expire, the date of expiration, and shall advise the chief executive officer and Board of en that it shall have the right to appoint by a date specified in the notice (which shall ben less than seven (7) days prior to the annual meeting date) persons as directors as herein provided C. Appoinw= of Directors UMIggmLe Ja Number. If at any time the number of directors shall be increased, then the chief executive officer, with the advice and consent of a majority of the Board of Aldermen, shall appoint the number of individuals as directors as is necessary to increase the size of the current board of directors ("Current Board") to the size of the board of directors as authorized by the Articles of Incorporation, as may be amended from time to time. At the time of appointment of the new directors, the Board of Aldermen shall divide the new directors into three groups containing as nearly equal whole numbers as may be possrible. The fast tern of the directors included in the first group shall coincide and be coterminous with the terms remaining of time directors of the Current Board who have the shortest remaining tern. The first tern of the directors included in the second group shall coincide and be coterminous with the terms remaining of those directors of the Current Board who have the longest remaining terns. The first term of the directors included in the third group shall coincide and be coterminous with the terms remaining of those directors of the Current Board who have not yet been referred to within this subparagraph c. d. Su—bquent Amkmeja. Any director may succeed himself or herself indefinitely. The name of any individual who has been so appointed by the chief executive officer with the advice and consent of a majority of the Board of Aldermen of the City of Riverside, Missouri, shall be forwarded to the secretary of the corporation not less than seven (7) days prior to the date of the annual meeting. -3- The failure to comply with the time schedule hereinabove set rth shall not invalidate the appointment of any director otherwise duly appointed. 4. Commeent of Term of Office. A director shall deemed appointer as of the time specified at the time of his appointment but he shall not be deemed to have commenced his term of office or to have any of the powers or responsibilities of a dhector until the time he accepts the office of director either by a written acceptance or by participating in the of fairs of the corporation at a meeting of the Board of Directors or odwwise. 5. Vacancies. Vacancies among the directors resulting from the death, resignation, removal, incapacity or disqualification of a director, or the failure of an appointed director to accept the office of director, may be filled by the chief executive officer with the advice and consent of a majority of the Board of Aldermen of the City of Riverside, Missouri. A director appointed to fill a vacancy shall meet any qualifications set forth in these Bylaws, and shall serve for the unexpired term of his predecessor and until his successor has been duly appointed and has commenced his term of office. 6. Compensation, No director shall receive compensation from the corporation for any service he may render to it as a director. However, upon approval of the Board of Directors, a director may be reimbursed for his actual expenses reasonably incurred in and about his performance of his duties as a director. 7. CCommittees. Committees not having the authority of the Board of Directors in the management of the corporation may be designated by a resolution adopted by a majority of the directors present at a meeting at which a quorum is pr*mZ Each such committee shall have such duties and authority as are from time to time delegated to it by the Board of Directors. The designation of any such committee and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any member thereo4 of any responsibility imposed upon it or himlher by law. 8. do Any director may resign from the Board of Directors. Such resignation shall be in writing and shall be effective immediately or upon its acceptance by the Board of Directors as such resignation may provide and if not c provided, then immediately. A== IV Iz i. Elm. Meetings of the Board of Directors of the corporation may be held at the principal office of the corporation designated pursuant to Article I, Section 1 of these Bylaws, or at any other place within the State of Missouri as may be determined from time to time by resolution of the board or by written consent of the members of the board. 2. Annual Meetinss. The annual meeting of the Board of Direcgors shall be held at 6-10 P.M. on the third Wednesday of September of each year. Notice of an annual meeting shall -4- be given to each incumbent and newly appointed director not lea thea five (5) days before the date of the annual meeting. The aAnual meeting shall be held within f3e, corporate limits of the City of Riverside. j 3. Meetings. In addition to the aun;W meeting, the Boar of Directors may hold regular meetings at the principal offices of the corporation at any time, at any place and for any purpose or purposes. The Board of Directors may also hold special meetings at any time and at any place for any purpose or purposes. Meotings may be called by the president, the secretary or by two members of the Board of Directors by notice duly signed by the officer or directors calling the same and given in the manner hereinafter provided 4. Participation through Faectm& Qmmmication, Subject to the requirements of Chapter 610, RSMo., as amended, members of the Board of Directors, or of any committee designated by the Board of Directors, may participate in a meeting of the Board or committee by meas of conference telephone or similar commrmications equipment whereby all persons participating in the meeting can hear each other, and participation in a meeting in this manner shall constitute presence in person at the meeting. 5. Notice of Meetings. Notice of any meeting of the Board of Directors shall be given to each director in writing at least twenty-four hours before such meeting. Notices shall specify the date, hour, and place of the meeting and the burse to be brought before the meeting. 6. Public Notice of Meetings. Reesonable effort shall be made to give at lead twenty-four hours notice of the time, date, place and tentative agenda of each meeting of the Board of Directors by posting such notice at the place design by the City Clerk for posting of meeting notices of the Board of Aldermen of the City of Riverside. Such notice shall be made available to any representative of the news media who requests notice of a particular meeting. Any additional notice required from time to time by applicable law shall also be given. 7. Waiver of Notice. Any notice provided or required to be given to the directors may be waived in writing by any of them whether before or after the time stated therein. Ace of a direator at any meeting shall constitute a waiver of notice of such meeting except where the director attends a meeting for the express purpose of objecting to the transaction of any business because the me sting is not lawAdly called or convened. 8. Quo umr . The presence of a majority of the whole board shall be requisite for and shall constitute a quorum for the transaction of business at all meetings. The act of a majority of the directors present at a meeting at which a quorum is present shall be valid as the act of the Board of Directors except in those specific instances in which a larger vote may be required by law, by the Articles of Incorporation or these Bylaws. 9. Adjournment. If a quorum shall not be present at any such meeting, the directors pmwmt shall have power successively to adjoum the meeting, without notice other than announcement at the meeting, to a specific date. At any such adjou>rAed mooting at which a -5- quorum shall be present any business may be transacted which could ve been transacted at the original session of the meeting. 10. Vo . Each director present at any meeting shall be mfitled to cast one vote on each matter coming before such meeting for decision. 11. Manner 9f Ac inr and Rules of Older. In all matters not covered by the Bylaws, parliamentary procedures shall be governed by the manual known as "Robert's Rules of Order, the Modern Edition." 12. Action Without Hestina. Notwithstanding any provision contained in these Bylaws to the contrary, any administrative actions, including without limitation the approval and execution of amts requiring the expenditure of less than one thousand dollars ($1,000). and personnel matters, including disciplinary actions, which are required to be or may be taken at a meeting of the directors, or any committee established by the Board of Directors, may be taken without a meeting if consents in writing, setting forth the action so taken, are signed by all of the members of the Board or of the committee as the case may be. The consent shall have the same force and effect as a unanimous vote at a meeting duly held, and may be stated as such in any certificate or docunment. The secretary shall We the consents with the minutes of the meetings of the Board of Directors or of the committee as the case may be. OFFICERS 1. The officers of the corporation shall be a president, one or more vice presidents, a secretary, a treasurer, and such other officers as the Board of Directors may elect, including but not limited to a chairman of the Board of Directors, assistant secretaries and assistant treasurers. The chairman of the board, if any, and the president shall be elected from among the members of the Board of Directors and shall at all times while holding such office be a member of the Board of Directors. Any two or more offices may be held by the same person except the offices of president and secretary. At each annual meeting of the Board of Directors the board shall elect officers to serve at the pleasure of the board until the next annual meeting of the board and until their successors are duly elected and qualified. An officer shall be deemed qualified when he enters upon the duties of the office to which he has been elected or appointed and furnishes any bond required by the board or than Bylaws; but the board may also require of such person his written acceptance and promise faithfully to discharge the duties of such office. 2.eR moval. Any officer or any employee or agem of the corporation maybe removed or discharged by a majority of the full Board of Directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. -6- If, for any reason, any officer who is also a member of the of Directors cases to be a member of the Board of Directors, then such officer shall autom fically be removed from his office in the corporation. 3. Comae No officer who is also a member of the Board of Directors shall receive any salary or compensation for serving as such Salaries and compensation of all other officers and of all other agents and employees of the corporation, If any, may be fixed, increased or decreased by the Board of Directors, but until action is taken with respect thereto by the Board of Directors, the same may be Syed, increased or decreased by the executive director, president, or such other officer or officers as may be empowered by the Board of Directors to do w, provided, however, that no person may fix, increase or decrease his/her own salary or compensation, Subject to approval of the Board of Directors, each officer may be reimbursed for Wier actual expenses if they are reasonable and incurred in connection with the business and activities of the corporation. 4. Vacaa. Vacancies caused by the death, resignation, incapacity, removal or disqualification of an officer of the corporation shall be filled by the Board of Directors at any annual or other meeting called for that purpose, and such person or persons so elected to fill any such vacancy shall serve at the pleasure of the board until the next annual meeting of the board, and until his/her successor is duty elected and qualified. 5. The Chairman of the Board. If a chairman of the board be elected or appointed, he shall preside at all meetings of the Board of Directors at which he may be present and shall have such other duties, powers and authority as may be prescribed elsewhere in these Bylaws. The Board of Directors may delegate such other authority and assign such additional duties to the chairman of the board, other than those conferred by law exclusively upon the president, as it may from time to time determine, and, to the extent permissible by law, the board may designate the chairman of the bard as the chief executive officer of the corporation with all of the powers othavAse conferred upon the president of the corporation under paragraph 7 of this Article V, or it may, from time to time, divide the responsibilities, duties and authority for the general control and management of the corporation's business and affairs between the chairman of the board and the president 6. Vice Chairman of the Board of Directors. If a vice-chairman of the board be elected or appointed, he shall work in cooperation with the chairman and shall perform such duties as the Board of Directors or the chairman may assign to him. In the event of the death, absence, incapacity, inability or refirsai to act of the chairman, the vice chairman shall be vested with all the powers and perform all the duties of the office of chairman. He shall have such other or hither duties or authority as may be prescribed elsewhere in these Bylaws or from time to time by the Board of Directors. 7. The President. Unless the board otherwise provides, the president shall be the chief executive officer of the corporation and shall have such general executive powers and duties of supervision and management as are usually vestal in the office of the chief executive officer of a corporation, and he shall carry into effect all directions and resolutions of the board. UFA In the absence of the chairman of the board or if there be no chairman of the board, the president shall preside at all meetings of the Board of Directors at which he may be present. If the Board of Directors appoints no executive director pursuant to Article VI or ii the absence, disability or inability to act of any executive director so appointed, the president ray exercise all of the powers and perform all of the duties of the executive director. The president may execute all bonds, notes, debentures, mortgages, and other contracts requiring a seal, under the seal of the corporation and may cause the seal to be affixed thereto, and all other instruments for and in the name of the corporation. If a chairman of the board be elected or appointed and designated as the chief executive officer of the corporation, as provided in paragraph 5 of this Article, the president shall perform such duties as may be specifically delegated to him by the Board of Directors and as are conferred by law exclusively upon him, and in the absence, disability or inability to act of tie chairman of the board, the president shall perform the duties and exercise the powers of the chairman of the board. The president shall have the right to attend any meeting of any committee of the Board of Directors and to express his opinion and make reports at such meeting; provided, however, that unless he shall be specifically appointed to any committee he shall not be considered to be a committee member w bavetba itght tovote or be cow for ihep►upom of de#rxmbib* a quorum at any such meeting. The president shall have such other duties, powers and authority as may be prescribed elsewhere in these Bylaws or by the Board of Directors. S. The Vice President. The vice president shall work in cooperation with the president and shall perform such duties as the Board of Directors may assign to him. In the event of the death, absence, incapacity, inability or refusal to act of the president, the vice president Cm order of seniority if there is more than one vice president) shall be vested with all the powers and perform all the duties of the office of president. In tie event the Board of Directors elects a chairman of the board, he shall serve as vice chairman and shall have such other or further duties or authority as may be prescribed elsewhere in these Bylaws or frmn time to time by the Board of Directors. 9. The Secretary. Ile secretary shall attend the meetings of the Board of Directors and shall record or cause to be recorded all votes taken and the minutes of all proceedings in the minute book of the corporation to be kept for that purpose. He shall perform like duties for any standing or special committees when requested by such committee to do so. He shall be the custodian of all the books, papers and records of the corporation and shall at such reasonable times as may be requested permit an inspection of such books, papers and records by any director of the corporation. He shall cam all books, papers, and records of the corporation to be kept safe and secure and shall make reasonable effort to house such documents at the City Hall of the City of Riverside or other similar public office. He shall, upon reasonable demand, furnish a full, tram and cornet copy of any book, paper or record in his possession. He shall be -8- the administrative and clerical officer of the corporation under the sup mvisiou of the president and Board of Directors. The secretary shall keep in safe custody the seal of the corpm*don and when authori W to do so shall affix the same to any Wstivmmnt requiring the seal, and -Men so affixed, he shall attest the same by his signature. The secretary shall have the principal responsibility to give or cause to be given notice of the meetings of the Board of Directors, but this shall not lessen the authority of others to give such notice as provided in these Bylaws. The secretary shall have the general duties, powers and responsibilities of a secretary of a corporation and shall have such other or Author duties or authority as may be prescn'bed elsewhere in these Bylaws or from time to time by the Board of Directors. While carrying out his duties as secretary, the secretary may also hold the position of treasurer. The secretary may be, but is not required to be, a member of the Board of Directors. 10. The Treasurer. The treasures shall have supervision and custody of all moneys, funds and credits of the corporation and shall cause to be kept full ad accurate accounts of the receipts and disbursements of the corporation in books belonging to it, He shall keep or cause to be kept all other books of account and accounting records of the %in atiom as shall be necessary, and shall cause all moneys and credits to be deposited name and to the credit of the corporation in such accounts and depositories as may be designated by the Board of Directors. The treasurer shall disburse or supervise the disbursement of fiords of the corporation in accordance with the au dmity granted by the Board of Directors, taking proper vouchers therefor. The treasurer sball be relieved of all responsibility for all moneys or other valuable property or the went thereof committed by the Board of Directors to the custody of any other person or corporation, or the supervision of which is delegated by the board to any other officer, agent or employee. The treasurer shall render to the president, the executive director or the Board of Directors, whenever regnested by any of them, an account of all transactions as treasurer and of those under his jurisdiction and the financial condition of the corporation. The treasurer may be bonded at the expense of the corporation and in an amount set by the Board of Directors if the Board of Directors so requires. The treasurer may be, but is not required to be, a member of the Board of Directors, shall have the general duties, powers and responsibilities of a treasurer of a corporation, shall be the chief financial and accounting officer of the corporation and shall have and perform such other dutim ponsrbMd. and Mlles as may be prescribed from Lima to time by the Board of -9- I While carrying out his duties as treasurer, the treasurer may t hold the position of secretary. I 11. Assistant &gm acv and Assistant Twasurer.Each assistant secretary or assistant treasurer, if any, in order of their seniority, in the event of the death, absence, incapacity, inability or refusal to act of the secretary or treasurer, respectively, shall perform the duties and exercise the powers of said respective officers and perform such other duties as the directors may from time to time prescribe. EXECUTIVE DntECMR The Board of Directors may appoint a person to exercise all of the powers and perform all the duties set forth in this Article and shall designate such person so appointed as the executive director. The executive director shall have such general powers and duties of supervision and management as are usually vested in the office of the chief administrative officer of a corporation, and he shall carry into effect all directions and resolutions of the board. The executive director shall direct the day -today business of the corporation including supervising all employees of the corporation, collecting any rentals, charges or fees, and keeping records in the form pmw%td from time to fume by the Board of Directors and reporting ihmort whenever so requested by the Board of Directors. The executive director shall be directly responsible to the board and shall report directly to the board. The executive director shall cause to be prepared and shall submit to the board for its approval an annual budget and all supplements thereto for each year at least thirty (30) days prior to the and of the preceding year. The executive director shall submit to the Board of Directors at its annual meeting a report summarizing the operations and busies of the corporation and its activities during the preceding year and setting forth the pleas, programs or projects for future development, with such suggestions and. as he shall approve. He shall also make such reports to the Board of Directors as he may deem wry, or which may be required by these Bylaws, or by the board. The executive director (if W a director) may be invited to attend any meeting of the Board of Directors and any committee thereof and to express his opinion and make reports at such meeting, provided, however, that in such event he shall not be considered to be a director or committee member or have the right to vote or be counted for the purpose of determining a quorum at any such meeting. The executive director may be bonded at the expense of the corporation and in an amount set by the Board of Directors if the Board of Directors so requires. The executive director shall have such other or further duties and authority as may be prescribed elsewhere in these Bylaws or from time to time by the Board of Directors. -10- In the event of the death, absence, incapacity, inability or M4, to act of the Executive Director, the Board of Directors or president shall designate some ot* person to exercise, and in the absence of such designation the president may exercise, all of the powers and perform all of the duties of the, executive director. ,ARTICLE VII GEI3ERAL PROVISIONS 1. Depositories and Checks. The moneys of the corporation shall be deposited in such manner as the directors shall direct in such bob or trust companies as the directors may designate and shall be drawn out by checks signed in such manner as may be provided by resolution adopted by the Board of Directors. 2. Bonds. In addition to any bonds required of the treasurer and the executive director, any other officer or employee handling money of the corporation may be bonded at the corporation's expense in such amounts as may be determined by the Board of Directors. 3. Custodian of Seaaiiies. The Board of Dhwtors may from time to time appoint one or more banks or trust companies to act for reasonable compensation as custodian of all securities and other valuables owned by the corporation, and to exercise in respect thereof such powers as may be conferred by resolution of the Board of Directors. The Board of Directors may remove any such custodian at any time. 4. A,nnualAudit. An annual audit of the books of account and financial records of the corporation shall be performed by an independent accounting firm at the expense of the corporation. S. Certain Loans Prohibited. The corporation shall not make any loan to any offncer or director of the corporation. -11- 6. Ind dflopton and Liabilityo Each person who is or was a director or officer of the corporation or is or was serving at the of the corporation as a director or officer of another corporation (including the heirs, rs, administrators and estate of such person) shall be indemnified by the corporation as of ri to the full extent permitted or authorized by the laws of the State of laud, as now ' , effect and as hereafter amended, against any liability, judgment, fine, amount paid in settlement, cost and expense ('including attorneys' few) asserted or threatened against and incurred by such person in his capacity as or arising out of his status as a director or officer of the corporation or, if serving at the request of the corporation, as a director or officer of another corporation. The Indemnification provided by this Bylaw provision shall not be exclusive of any other rights to which those indemnified may be entitled under any other bylaw or under any agrcement, vote of disinterested directors or otherwise, and shall not limit in any way any right which the corporation may have to make dif%r+ent or farther' with respect to the same or different persons or classes of persons. No person shall be liable to the corporation for any loss, damage, liability or expense suffered by it on account of any action taken or omitted to be taken by him as a director or officer of the corporation or of any other corporation which he serves as a director or officer at the request of the corporation, if such person (a) exercised the same degree of care and skill as a prudent man would have exercised under the circumstances in the conduct of his own affairs, or (b) took or omitted to take such action in reliance upon advice of counsel for the corporation, or for suds other corporation, or upon statements made or information furnished by directors, officers, employees or agents of the corporation, or of such other corporation, which he had no reasonable grounds to disbelieve. 7. Personnel Systems. The Board of Directors shall adopt an orderly and consistent personnel system which shall apply to all employees of the corporation. S. Abww&dEeMW Liabrlit_v. The directors, officers and employees of the corporation are not individually or personally liable for the debts, bonds, contracts, liabilities or obligations of the 9. j ellangw. The use of the masculine shall be deemed to include the feminine and the use of the singular shall be deemed to include the plural, and vice versa, whenever the context se admits or requires. FISCAL YEAR The Board of Directors shall have the power to fix and fiom time to time change the fiscal year of the corporation. In the absence of action by the Board of Directors, however, the fiscal year of the corporation shall end each year on the date which the corporation treated as the close of its first fiscal year, until such time, if any, as the fiscal year shall be changed by the Board of Directors. -12- ARTICLE iX The Board of Directors of the corporation shall have the power to make, alter, amend and repeal the Bylaws of the corporation and to adopt new bylaws, which power may be exercised by a vote of a majority of the members of the full Board of Directors. The corporation shall keep at its principal office a copy of the Bylaws, as amended, which shall be open to inspection at all reasonable times drain$ office home -13- These Bylaws shall become effective f orc hr Q 1 I .2007. APPROVED AND ADOPTED by the Board of Directors on m re -j , 2007. 1. % -,� c / _ak-r _ day of CERTIFICATE The undersigned hereby certifies that she is the duly wed and acting secretary of The Industrial Development Authority of the City of Riverside, Wmsomt that in such capacity she is the lawful custodian of the corporation, and that the foregoing is a true, correct and complete copy of the Bylaws of the Authority adopted by resolution of its Board of Directors on Marcl^s. A 1 .2007. i M77- -14- EXHIBIT C CERTIFICATE OF GOOD STANDING «��� ���\ CORPORATION DIVISION my office and in my care and custody reveal that THE IND USTRIALDE VELOPMENTA UTHORITY OF THE CITY OF RIVERSIDE, MISSOURI ?fes 00485 was creat -d» 4e the laws of this State on the © day of March, 2007, and is in good standing, having fully »a£:« »« all requirements of this office. III TESTI1T10nT--TTAEA-B4,F, ,w.> set my hand and cause to be affixed the GREAT SEAL ©2s ©ate Missouri. Done at the City of Jefferson, this 27th day of October, 2017. WN 1W41111.11" SIGNATURE AFFIDAVITS IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF MISSOURI RECEIVED & FILED JUN 2 4 2014 STATE OF MISSOURI ) SECRETARY OF STATE ) ss. COMMISSIONS DIVISION COUNTY OF PLATTE ) I, the undersigned, Leland Finley, being duly sworn on oath, state and certify that I am the duly qualified and acting President of The Industrial Development Authority of the City of Riverside, Missouri, and that the signature appearing below is my signature and I file herewith this certificate pursuant to Section 105.274, RSMO. 1 Leland Finley President of The Industrial Development Authority of the City of Riverside, Missouri Subscribed and sworn to before me, a Notary Public in and for said County and State, this day of June, 2014. (NOTARY SEAL) Commission # 11277184= Platte County otSO c+ �� OF MIS 10&on Expite8 �1��� RECEIVED & FILED IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF MPI,2011 M4SIOYN DI�SION STATE OF MISSOURI ) ) SS. COUNTY OF PLATTE ) I, the undersigned, Sarah Wagner, being duly sworn on oath, state and certify that I am the duly qualified and acting Assistant Secretary of The Industrial Development Authority of the City of Riverside, Missouri, and that the signature appearing below is my signature and I file herewith this certificate pursuant to Section 105.274, RSMo. Sarah Wagner Assistant Secretary ofa Industrial Development Authority of the City of Riverside, Missouri Subscribed and sworn to before me, a Notary Public in and for said State, this a& day of 2011. (NOTARY SEAL) ROBIN L. LITTRELL Notary Public -Notary Seal State of Missouri, Ray County Commission #Q 113 1 My commission Explr®s Mar ®, 2015WIWI Notary Public CITY'S CLOSING CERTIFICATE We, the undersigned, hereby certify that we are the duly appointed Mayor and City Clerk of the City of Riverside, Missouri, a city of the fourth class and political subdivision of the State of Missouri (the "City"), and as such we are familiar with the books and records of the City and have all authority necessary to execute this Certificate on behalf of the City. In connection with the issuance of $18,370,000 principal amount of Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017 (the "Bonds"), by The Industrial Development Authority of the City of Riverside, Missouri (the "Authority"), we hereby further certify for and on behalf of the City as follows, as of November 1, 2017: 1. ORGANIZATION AND AUTHORITY 1.1. Due Organization. The City is a city of the fourth class and political subdivision of the State of Missouri. 1.2. Ordinance. Attached hereto as Exhibit A is Ordinance No. 1565 (the "Authorizing Ordinance") which has been duly adopted by the Board of Aldermen and which has not been amended, altered or repealed and which is in full force and effect as of the date hereof. 1.3. Regular Meetings. The regular meetings of the governing body of the City are held on the first and third Tuesday of each month at 7:00 p.m. All meetings of the governing body of the City as shown in the Transcript (as defined below) were regular meetings, or meetings held pursuant to regular adjournment at the next preceding meeting, or special meetings called and held as shown in the Transcript, and at all such meetings where required, proper notice was given in the manner required by law including Chapter 610, Missouri Revised Statutes. 1.4. Incumbency of Officers. The following named persons are the duly qualified and acting officers of the City during these proceedings: Name Kathleen Rose Al Bowman Ron Super Aaron Thatcher Chet Pruett Salvatore LoPorto Art Homer Greg Mills Donna Oliver Robin Kincaid 2. BOND TRANSCRIPTS AND LEGAL DOCUMENTS Title Mayor Alderman- Ward 1 Alderman- Ward 1 Alderman- Ward 2 Alderman- Ward 2 Alderman- Ward 3 Alderman- Ward 3 City Administrator Director of Finance City Clerk 2.1. Transcript of Proceedings. The Transcript of Proceedings (the "Transcript") relating to the authorization and issuance of the Bonds includes a true and correct copy of documents delivered by the City relating to the issuance of the Bonds; said Transcript is, to the best of our knowledge, information and belief, full and complete. 2.2. Execution of Documents. The following documents have been executed and delivered in the name and on behalf of the City by its duly authorized officers, pursuant to and in full compliance with the Authorizing Ordinance; the copies of said documents contained in the Transcript are true, complete and correct copies or counterparts of said documents as executed and delivered by the City; and said documents have not been amended, modified or rescinded and are in full force and effect as of the date hereof: (a) Financing Agreement dated as of November 1, 2017 (the "Financing Agreement' between the Authority and the City; (b) Tax Compliance Agreement dated as of November 1, 2017 (the "Tax Compliance Agreement"), among the Authority, the City and the Trustee; (c) Continuing Disclosure Agreement dated as of November 1, 2017 (the "Continuing Disclosure Agreement"), executed by the City and the Trustee for the benefit of holders of the Bonds; (d) Bond Purchase Agreement dated October 19, 2017 (the "Bond Purchase Agreement"), among the Authority, the City and Stifel, Nicolaus & Company, Incorporated, as underwriter for the Bonds (the "Underwriter"); (e) Escrow Letter of Instructions dated as of November 1, 2017 (the "Escrow Agreement"), among the Authority, the City and UMB Bank, N.A., as paying agent for the Refunded Bonds (as defined in the Indenture (defined below)); and (e) Preliminary Official Statement dated October 11, 2017 and Official Statement dated October 19, 2017 (collectively, the "Official Statement"). The Financing Agreement, the Tax Compliance Agreement, the Continuing Disclosure Agreement, the Bond Purchase Agreement, the Escrow Agreement and the Official Statement are sometimes collectively referred to herein as the "City Documents." 2.3. Authorization of Documents. The City has duly authorized, by all necessary action, the execution, delivery and due performance of the City Documents and any and all such other agreements and documents as may be required to be executed, delivered and received by the City in order to carry out, give effect to and consummate the transactions contemplated by the City Documents. The City Documents, as executed and delivered, constitute legal, valid and binding obligations of the City in accordance with their respective terms (except insofar as the enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws or equitable principles of general application affecting the rights and remedies of creditors and secured parties). 2.4. Representations and Warranties in City Documents. Each of the representations and warranties of the City set forth in the City Documents are true and correct in all material respects as of the date hereof, as if made on the date hereof, and all covenants and conditions to be complied with and obligations to be performed by the City under the City Documents have been complied with and performed and no condition, event or act has occurred which constitutes an event of default, or with notice or lapse of time, or both, would constitute an event of default. 2.5. No Event of Default. At the date of this Certificate, no event of default under the City Documents has occurred and is continuing and no event has occurred and is continuing which with notice or lapse of time, or both, would constitute an event of default under the City Documents. -2- 2.6. Approval of Indenture. The City hereby approves of the form of the Bond Trust Indenture dated as of November 1, 2017 (the "Indenture"), between the Authority and the Trustee. 2.7 Preliminary Official Statement and Official Statement. The Preliminary Official Statement and the Official Statement contained in the Transcript constitute full, true and correct copies of the Preliminary Official Statement and final Official Statement relating to the Bonds. To the best of our knowledge, in said Preliminary Official Statement and in the final Official Statement the City has not made an untrue statement of a material fact or omitted to state a material fact (except for the omission of such information in the Preliminary Official Statement as is permitted by Rule 15c2 -12(b)(1) of the Securities and Exchange Commission) necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. As of this date no event has occurred which is necessary to be disclosed in the Preliminary Official Statement or the final Official Statement in order to make the statements therein not misleading in any material respect as of the date hereof. The City has heretofore caused to be delivered to the Original Purchaser copies of the Preliminary Official Statement. Notwithstanding the foregoing, the City has not made and does not make any representation or warranty (either express or implied) regarding the accuracy or completeness of any financial, technical or statistical data or any estimates, projections, assumptions or expressions of opinion set forth therein. 3. FINANCIAL INFORMATION 3.1. We have examined the Official Statement relating to the issuance by the Authority of the Bonds and, to the best of our knowledge, information and belief, after reasonable investigation, the portions of the Official Statement describing the City and the City's financial condition do not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading. 4. LEGAL MATTERS 4.1. No Litigation. There are not pending, or to the knowledge of the undersigned threatened, any litigation or legal proceedings, or any basis therefor, material as to the City and to which the City is a party, or to which the property of the City is subject, which will (a) adversely affect the transactions described in the City Documents, (b) adversely affect or question the payments required to be made under any of the City Documents, (c) adversely affect the execution, issuance, delivery, validity or enforceability of the Bonds or the City Documents, (d) in any way contest the due organization, existence or powers of the City, or (e) in any way adversely affect the Federal tax-exempt status of the interest on the Bonds or the amounts to be received by the Authority pursuant to the Indenture, which are not disclosed in the Official Statement. 4.2. Approvals. All currently necessary approvals, whether legal or administrative, have been obtained from any applicable federal, state or local entity or agency required in connection with the execution of the City Documents. 4.3. Compliance with Existing Covenants. The City is not in default under nor violating any indenture, mortgage, lien, agreement, contract, deed, lease, agreement, note, order, judgment, decree or other instrument or restriction of any kind or character to which it is a party or by which it is bound, or to which it or any of its assets is subject. Neither the execution and delivery of the City Documents nor compliance with the terms, conditions and provisions thereof will conflict with or constitute a default under, any of the foregoing. 4.4. Legal Counsel. We understand that the factual information and representations contained in this Certificate will be relied upon by the Authority in the issuance of the Bonds and by the law firm of -3- Gilmore & Bell, P.C. in rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes and that the Underwriter will rely on such information and representations in connection with its purchase of the Bonds. 4.5. Outstanding Obligations. The City does not have outstanding any bonds or other obligations payable from the Special Allocation Fund (as defined in the Authorizing Ordinance) other than the Bonds, the Series 2007 IDA Bonds, the Series 2011A Bonds, the Series 2014 Bonds and the Series 2017 Levee District Bonds (all as defined in the Official Statement). [Remainder of page intentionally blank.] -4- By: athleen L. Rase Mayor [SEAL] ATTEST: Robin Kincaid City Clerk -1 City's Closing Certificate IDA Riverside (Horizons Project), Series 2017 EXHIBIT A ORDINANCE BILL NO. 2017-065 ORDINANCE NO. 1565 AN ORDINANCE AUTHORIZING THE CITY TO OBTAIN FINANCING OF NOT TO EXCEED $19,500,000 FROM THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI, IN CONNECTION WITH THE REFUNDING OF CERTAIN BONDS ISSUED TO FUND CERTAIN REDEVELOPMENT COSTS DESCRIBED IN A TAX INCREMENT FINANCING PLAN PREVIOUSLY APPROVED BY THE CITY; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION OF A FINANCING AGREEMENT WITH THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI; PROVIDING FOR THE ADMINISTRATION OF THE SPECIAL ALLOCATION FUND PREVIOUSLY CREATED BY THE CITY; AND PROVIDING FOR THE EXECUTION OF CERTAIN DOCUMENTS AND PRESCRIBING OTHER MATTERS RELATING THERETO. WHEREAS, the City of Riverside, Missouri (the "City"), is a fourth class city and political subdivision of the State of Missouri duly created, organized and existing under the constitution and laws of the State of Missouri; and WHEREAS, The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") has previously issued its (i) Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007A, issued in the original principal amount of $30,265,000, and (ii) Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007B, issued in the original principal amount of $10,000,000 (to the extent outstanding, collectively, the "Refunded Bonds"); and WHEREAS, the City approved the issuance of the Refunded Bonds by the Authority pursuant to Ordinance No. 2007-005, passed on April 26, 2007; and WHEREAS, the City has determined that it is necessary and desirable, to provide for the refunding of the Refunded Bonds by obtaining financing from the Authority in the principal amount of not to exceed $19,500,000 (the "Financing"), pursuant to the terms of the hereinafter defined Financing Agreement; and WHEREAS, the Authority will provide for the Financing through the issuance of not to exceed $19,500,000 aggregate principal amount of Industrial Development Refunding Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2017 (the "Bonds"); and WHEREAS, the proceeds of the Financing will be applied, together with other funds to (1) refund and redeem the Refunded Bonds, (2) fund a debt service reserve fund for the Bonds in the amount of $1,000,000, and (3) pay the costs of issuing the Bonds; and WHEREAS, it is hereby found and determined that it is necessary and advisable and in the best interest of the City and of its inhabitants that the City obtain the Financing from the Authority in the form and manner as hereinafter provided to provide funds for the above-described purposes and to provide for the repayment of said Financing all as more fully described herein; NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF ALDERMEN OF THE CITY OF RIVERSIDE, MISSOURI, AS FOLLOWS: ARTICLE I DEFINITIONS Section 101. Definitions of Words and Terms. In addition to words and terms defined elsewhere in this Ordinance, the following capitalized words and terms as used in this Ordinance shall have the following meanings: "Act" means the Real Property Tax Increment Allocation Redevelopment Act, Sections 99.800 to 99.865, inclusive, of the Revised Statutes of Missouri, as amended. "Additional Payments" shall have the meaning set forth in the Financing Agreement. "Bonds" means not to exceed $19,500,000 aggregate principal amount of Industrial Development Refunding Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2017, to be issued by the Authority. "Cooperation Agreement" means the Cooperation Agreement dated as of January 12, 2017, among the City, the Authority, UMB Bank, N.A., as trustee, Platte County, Missouri and the Riverside- Quindaro Bend Levee District of Platte County, Missouri, as amended from time to time in accordance with the provisions thereof. "Economic Activity Tax Account" means the Economic Activity Tax Account in the Special Allocation Fund described in Section 401 hereof. "Economic Activity Tax Revenues" means fifty percent (50%) of the total additional revenue from sales taxes which are imposed by the City or other taxing districts, and which are generated by economic activities within the Redevelopment Area on a lot, block, tract or parcel over the amount of such taxes generated by economic activities within the Redevelopment Area in the calendar year prior to the adoption of tax increment financing related to the applicable lot, block, tract or parcel, while tax increment financing remains in effect, but excluding (i) taxes imposed on sales or charges for sleeping rooms paid by transient guests of hotels and motels, licenses, fees or special assessments and (ii) personal property taxes, other than Payments in Lieu of Taxes, all as determined in accordance with the Act. "Financing Agreement" means the Financing Agreement dated as of the date set forth therein, between the Authority and the City, pursuant to which the Authority will loan the proceeds of the Bonds to the City. "Financing Payments" shall have the meaning set forth in the Financing Agreement. "Incremental Tax Revenues" means, collectively, New State Revenues, Payments in Lieu of Taxes and, subject to annual appropriation as provided herein, the Economic Activity Tax Revenues. "New State Revenues" means revenue appropriated each year by the General Assembly of the State of Missouri pursuant to the State Supplemental Tax Increment Financing Program Amended Certificate of Approval. -2- "New State Revenues Account" means the New State Revenues Account in the Special Allocation Fund described in Section 401 hereof. "Payments in Lieu of Taxes" means, when collected by the City, the payments in lieu of taxes attributable to the increase in the current equalized assessed valuation of each taxable lot, block, tract, or parcel of real property in the Redevelopment Area over and above the certified total initial equalized assessed value of each such unit of property in the Redevelopment Area on the date that tax increment financing was adopted for such lot, block tract or parcel, all as determined in accordance with the Act. "PILOTS Account" means the PILOTS Account in the Special Allocation Fund described in Section 401 hereof. "Redevelopment Area" means the area described as such in the Cooperation Agreement. "Series 2011A Bonds" means the Authority's Tax Increment Refunding Revenue Bonds (L-385 Levee Project), Series 2011A. "Series 2014 Bonds" means the Authority's Tax Increment Refunding Revenue Bonds (L-385 Project), Series 2014. "Series 2017 Levee District Bonds" means the Levee District Improvement Refunding Revenue Bonds (L-385 Project), Series 2017. hereof. "Special Allocation Fund" means the fund by that name ratified and confirmed by Section 401 ARTICLE H AUTHORIZATION FOR FINANCING Section 201. Authorization for Financing. The City is hereby authorized to finance with the Authority an amount of not to exceed $19,500,000 for the purposes described in the recitals hereto. Section 202. Authorization of Documents. In connection with the Financing, the City is hereby authorized to execute and deliver the following documents: (a) Financing Agreement; (b) Tax Compliance Agreement dated as of the date set forth therein (the "Tax Compliance Agreement"), among the Authority, the City and the bond trustee for the Bonds named therein (the "Trustee"); (c) Continuing Disclosure Agreement dated as of the date set forth therein (the "Continuing Disclosure Agreement"), between the City and the Trustee, as Dissemination Agent; (d) Bond Purchase Agreement dated the date set forth therein (the "Purchase Agreement"), among the City, the Authority and Underwriter (as defined in Section 207); and (e) Official Statement related to the offering for sale of the Bonds, in substantially form of the Preliminary Official Statement presented to the Board of Aldermen; -3- (the foregoing collectively referred to herein as the "City Documents') in substantially the forms presented to and reviewed by the Board of Aldermen (copies of which documents shall be filed in the records of the City), with such changes therein as shall be approved by the officers executing such documents, such officers' signatures thereon being conclusive evidence of their approval thereof. Section 203. Limited Obligations. Except as provided herein in Article III hereof, the City's obligation to make Financing Payments and Additional Payments under the Financing Agreement shall be subject to annual appropriation and shall not constitute a debt, liability or indebtedness within the meaning of any constitutional, statutory or charter debt limitation or restriction, all as more fully provided in the Financing Agreement. Notwithstanding any schedule of payments upon the Financing set forth in the Financing Agreement or the Bond Trust Indenture under which the Bonds are issued (the "Indenture"), the City shall make payments upon the Financing and shall be liable therefor at the times and in the amounts (including interest, principal, and redemption premium, if any) equal to the amounts to be paid as interest, principal and redemption premium, if any, whether at maturity or by optional or mandatory redemption upon all Bonds from time to time outstanding under the Indenture, as further provided in the Financing Agreement. THE BONDS, THE FINANCING PAYMENTS AND ADDITIONAL PAYMENTS DO NOT CONSTITUTE A GENERAL OBLIGATION OF THE AUTHORITY OR THE CITY AND DO NOT CONSTITUTE AN INDEBTEDNESS OF THE AUTHORITY, THE CITY, THE STATE OF MISSOURI (THE "STATE") OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWERS OF THE AUTHORITY, THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE BONDS OR THE FINANCING PAYMENTS OR ADDITIONAL PAYMENTS. THE ISSUANCE OF THE BONDS AND THE EXECUTION OF THE FINANCING AGREEMENT SHALL NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE THE AUTHORITY, THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF TO LEVY ANY FORM OF TAXATION THEREFOR OR TO MAKE ANY APPROPRIATION FOR ANY PAYMENTS RELATED THERETO. THE AUTHORITY HAS NO TAXING POWER. Section 204. Approval of Issuance of Bonds. The City hereby approves the issuance of the Bonds by the Authority, subject to the following restrictions: (a) The maximum principal amount of the Bonds shall not exceed $19,500,000; (b) The true interest cost of the Bonds as computed by the City's financial advisor shall not exceed 3.15%; (c) The weighted average maturity of the Bonds as computed by the Underwriter shall be between 3.25 years and 5.25 years; Bonds; (d) The final maturity date of the Bonds shall be not later than May 1, 2026; (e) The Underwriters' discount shall not exceed 1.0% of the principal amount of the -4- (f) The refunding the Refunded Bonds, shall result in a net present value savings as computed by the City's financial advisor of at least 3.0%; and (g) The Bonds shall not be subject to optional redemption prior to maturity. Section 205. Refunding of Refunded Bonds. The City hereby authorizes the refunding and redemption of the Refunded Bonds on the earliest practical date, and the officers of the City, including the Mayor, City Administrator, Finance Director and the City Clerk, are hereby authorized to execute such documents and take such actions as are necessary to so redeem the Refunded Bonds. Section 206. Approval of Underwriter. The City hereby approves the selection of Stifel, Nicolaus and Company, Incorporated as underwriter (the "Underwriter"). ARTICLE III SECURITY FOR THE FINANCING Section 301. Security for the Financing. (a) Except as provided in the following paragraph, the City's obligation to make Financing Payments and Additional Payments pursuant to the Financing Agreement shall be subject to annual appropriation as provided in Section 3.5 of the Financing Agreement. Notwithstanding the foregoing, Payments in Lieu of Taxes and New State Revenues deposited into the Special Allocation Fund are not subject to annual appropriation and are pledged, on a subordinate basis, by the City pursuant to Section 302 of this Ordinance to secure the Financing Payments and Additional Payments, however any moneys and securities in the Special Allocation Fund not required to pay debt service on such bonds in any year may be used by the City for other reimbursable project costs pursuant to the Act. The pledge of the Payments in Lieu of Taxes and the New State Revenues is subordinate to the pledge of such revenues securing the Series 2011A Bonds, the Series 2014 Bonds, the Series 2017 Levee District Bonds and any additional bonds issued under the respective trust indentures related to such bonds. (b) As additional security for the City's obligation to make Financing Payments and Additional Payments pursuant to the Financing Agreement, such payments shall be payable from and secured as to the payment of principal and interest by (a) a pledge, on a subordinate basis as described herein, of the Payments in Lieu of Taxes deposited in the PILOTS Account of the Special Allocation Fund, (b) a pledge, on a subordinate basis as described herein, of the New State Revenues deposited in the New State Revenues Account of the Special Allocation Fund and (c) subject to annual appropriation by the Board of Aldermen as provided in Section 303 hereof, a pledge, on a subordinate basis as described herein, of the Economic Activity Tax Revenues deposited in the Economic Activity Tax Account of the Special Allocation Fund. The taxing power of the City is not pledged to the payment of the Financing either as to principal or interest. The Financing shall not constitute a general obligation of the City, nor shall it constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction. Section 302. Pledge of Certain Funds. The moneys and securities held in, and moneys and securities to be deposited in, the Special Allocation Fund are hereby pledged to the payment of the Financing, which pledge is subordinate to the pledge of such revenues securing the Series 201 IA Bonds, the Series 2014 Bonds, the Series 2017 Levee District Bonds and any additional bonds issued under the 9611 respective trust indentures related to such bonds; provided, however, Economic Activity Taxes deposited therein shall remain subject to annual appropriation as described in Section 303 hereof. Any moneys and securities in the Special Allocation Fund not required to pay debt service on such bonds in any year may be used by the City for other reimbursable project costs. Section 303. Annual Appropriation of Economic Activity Taxes. The City currently intends to appropriate in each year the Economic Activity Tax Revenues in the Special Allocation Fund to the repayment of the Financing. In preparing the City's annual budget the City Administrator or such other office of the City at any time charged with the responsibility of formulating budget proposals shall include or cause to be included in each budget submitted to the Board of Aldermen such appropriation. Notwithstanding the foregoing, the decision of whether or not to appropriate is solely within the discretion of the Board of Aldermen. In the event the Board of Aldermen votes to not appropriate the Economic Activity Tax Revenues, the City shall immediately notify in writing the following persons of such Event of Nonappropriation: (i) the Authority, (ii) the Trustee, (iii) the Municipal Securities Rulemaking Board, via its EMMA portal, and (iv) each nationally recognized rating agency which currently maintains a rating on any of the City's bonds. ARTICLE IV SPECIAL ALLOCATION FUND Section 401. Ratification of Special Allocation Fund. There is hereby ratified the Special Allocation Fund, and within the Special Allocation Fund, a PILOTS Account, an Economic Activity Tax Account and a New State Revenues Account, as previously created therein. Said fund and accounts shall be segregated and kept separate and apart from all other moneys, revenues, funds and accounts of the City and shall not be commingled with any other moneys, revenues, funds and accounts of the City. The funds and accounts referred to above shall be maintained and administered by the City solely for the purposes and in the manner as provided in this Ordinance and in the Cooperation Agreement so long as any portion of the Financing remains Outstanding and unpaid. Section 402. Administration of Special Allocation Fund. The moneys in the Special Allocation Fund shall be administered and applied solely for the purposes and in the manner provided in this Ordinance, the Financing Agreement, the Cooperation Agreement and the other documents related to the Bonds, the Series 2011A Bonds, the Series 2014 Bonds and the Series 2017 Levee District Bonds. The City hereby agrees to deposit all Incremental Tax Revenues into the Special Allocation Fund as received. The Incremental Tax Revenues shall be determined, collected and applied in the manner provided by law. Payments in Lieu of Taxes shall be deposited into the PILOTS Account of the Special Allocation Fund; subject to annual appropriation, all Economic Activity Tax Revenues shall, as and when received by the City, be paid and deposited into the Economic Activity Tax Account of the Special Allocation Fund; and all New State Revenues shall, as and when received by the City, be paid and deposited into the New State Revenues Account of the Special Allocation Fund. -6- "ITIM919WA Section 501. Further Authori The officers of the City, including the Mayor, City Administrator, Finance Director and the City Clerk, are hereby authorized and directed to execute all documents, and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of this Ordinance and to make any changes or additions in this Ordinance and the foregoing agreements, statements, instruments and other documents herein approved, authorized and confirmed which they determine to be in the City's best interest, and the execution or taking • such • shzWbe-conelusive-eNi4ence • sucli-determim-tion, Section 502. Severability. If any section or other part of this Ordinance, whether large or small, is for any reason held invalid, the invalidity thereof shall not affect the validity of the other provisions • this Ordinance. . Section 503. Governing Law. This Ordinance shall be governed exclusively by and cod—in accordance with the applicable laws of the State of Missouri. Section 504. Effective Date. This Ordinance shall take effect and be in full force from and after its passage by the Board of Aldermen and approval by the Mayor. BE IT REMEMBERED that the above was read two times by heading only, passed and approved by a majority of the Board of Aldermen and APPROVED by the Mayor of the City of Riverside, Missouri, this =–day of October, 2017. ATTF�T:' Robin Kinaid; ,City"Clerk N Kathleen L. Rose, Mayor City Attorney��� EXCERPT OF MINUTES OF BOARD OF ALDERMEN MEETING The Board of Aldermen of the City of Riverside, Missouri, met in regular session on Tuesday, October 17, 2017, at 7:00 p.m. The meeting was held at City Hall, 2950 N.W. Vivion Road, Riverside, Missouri. The following members and officers of the Board of Aldermen were present or absent at the meeting as follows: Name Title Present/Absent Kathleen Rose Mayor Present Al Bowman Alderman- Ward 1 Present Ron Super Alderman- Ward 1 Present Aaron Thatcher Alderman- Ward 2 Present Chet Pruett Alderman- Ward 2 Present Salvatore LoPorto Alderman- Ward 3 Absent Art Homer Alderman- Ward 3 Present Robin Kincaid City Clerk Present The Mayor declared that a quorum was present and called the meeting to order. (Other Proceedings) The matter of authorizing the borrowing of the proceeds of The Industrial Development Authority of the City of Riverside, Missouri, Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017 in an aggregate principal amount not exceeding $19,500,000, for the purpose of financing refinancing the costs of a prior infrastructure project for the City of Riverside, Missouri, was considered and discussed. follows: Thereupon, Alderman Thatcher presented and moved the adoption of an Ordinance entitled as AN ORDINANCE AUTHORIZING THE CITY TO OBTAIN FINANCING OF NOT TO EXCEED $19,500,000 FROM THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI, IN CONNECTION WITH THE REFUNDING OF CERTAIN BONDS ISSUED TO FUND CERTAIN REDEVELOPMENT COSTS DESCRIBED IN A TAX INCREMENT FINANCING PLAN PREVIOUSLY APPROVED BY THE CITY; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION OF A FINANCING AGREEMENT WITH THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI; PROVIDING FOR THE ADMINISTRATION OF THE SPECIAL ALLOCATION FUND PREVIOUSLY CREATED BY THE CITY; AND PROVIDING FOR THE EXECUTION OF CERTAIN DOCUMENTS AND PRESCRIBING OTHER MATTERS RELATING THERETO. The motion for the adoption of the foregoing Ordinance was seconded by Alderman Pruett. Thereupon, said Bill 2017-065 was read two times by title only and considered, and, the motion being put to a roll call vote, the following vote was recorded: Aye: Thatcher, Pruett, Bowman, Homer and Super. Nay: None. Absent: LaPorta. The Mayor declared that the motion for the adoption of the Ordinance had carried and that the Ordinance had been duly adopted. (Other Proceedings) [Remainder of page intentionally blank.] -2- There being no further business to come before the Board of Aldermen, on motion duly made, ;=onded and carried by unanimous vote, the meeting was adjourned. 0 Excerpt of Minutes — City IDA Riverside (Horizons Project), Series 2017 TRUSTEE'S CLOSING CERTIFICATE The undersigned, UMB Bank, N.A., Kansas City, Missouri, as Trustee (the "Trustee") under the Bond Trust Indenture dated as of November 1, 2017 (the "Indenture"), between the Trustee and The Industrial Development Authority of the City of Riverside, Missouri (the "Authority"), authorizing the issuance of $18,370,000 principal amount of Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017 (the "Bonds"), of the Authority, does hereby certify as follows, as of November 1, 2017: 1. Power and Authority of Trustee. The Trustee is a national banking association duly organized and existing under the laws of the United States of America., is authorized and empowered to execute and deliver the Indenture and has full power and authority to act as Trustee and Paying Agent as provided in the Indenture. 2. Execution of Indenture, Tax Compliance Agreement and Continuing Disclosure Agreement. The Indenture, between the Authority and the Trustee, the Tax Compliance Agreement, among the Authority, the City of Riverside, Missouri (the "City") and the Trustee, the Continuing Disclosure Agreement executed by the City and the Trustee and the Escrow Letter of Instructions among the Authority, the City and the Trustee, each dated as of November 1, 2017, have been executed on behalf of the Trustee and its corporate seal affixed thereto and attested by duly authorized officers of the Trustee, and each of said persons was at the time of the execution of said documents and now is the duly elected or appointed, qualified and acting incumbent of his or her respective office. 3. Receipt of Documents. The Trustee hereby acknowledges receipt of the documents specified in Section 202 of the Indenture, which are required to be filed with the Trustee prior to or simultaneously with the delivery of the Bonds and the Authority's Closing Certificate and Instructions to the Trustee delivered at the time of closing of the Bonds and contained in the Transcript of Proceedings relating to the authorization and issuance of the Bonds. 4. Authentication of Bonds. In accordance with the written request and authorization of the Authority, prior to the delivery of the Bonds, the Certificate of Authentication on the Bonds so delivered was signed on behalf of the Trustee by a person, who was at the time of the authentication of the Bonds and still is at the date hereof, a qualified and acting signatory of the Trustee. 5. Delivery of Bonds. At the written request and authorization of the Authority, the Trustee has on this date delivered $18,370,000 aggregate principal amount of the Bonds to the order of Stifel, Nicolaus & Company, Incorporated, the underwriter for the Bonds (the "Underwriter"). 6. Receipt of Purchase Price of the Bonds. The Trustee on this date received on behalf of the Authority from the Underwriter, the purchase price of the Bonds equal to $19,953,704.35. 7. Deposit of Bond Proceeds. The Trustee on this date deposited the purchase price of the Bonds, in accordance with the requirements of the Indenture. 8. Authorization of Officers. The officers and signatories of the Trustee identified in paragraphs (2) and (4) hereof were at the time of the acts above-mentioned, and are at the date hereof, qualified and acting signatories of the Trustee and duly authorized to perform the acts specified in such paragraphs. IN WITNESS WHEREOF, UMB Bank, N,A,, as Trustee, has caused this certificate to be executed and its corporate seal affixed and attested by its duly authorized officers all as of the date first stated above, UMB BANE, N,,A,.., as Trustee By: Name: Douglas 'H, Title: Senior Vice resident Name: Torn Wiegand Title: Assistant Secretary S-1 1'rustee's Closing Cmificate IDA Riverside (Horizons ProJect), Series 2017 TRUSTEE DEFEASANCE AND REDEMPTION CERTIFICATE THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI INDUSTRIAL DEVELOPMENT REVENUE BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT — CITY OF RIVERSIDE, MISSOURI) SERIES 2007A AND SERIES 2007B UMB Bank, N.A., as trustee (the "Trustee") under the Indenture of Trust (the "Indenture") dated as of May 1, 2007, under which the above -referenced Bonds (the "Defeased Bonds") were delivered, does hereby certify and acknowledge as follows: 1. Provision has been made for the defeasance, discharge and payment of the Defeased Bonds, at the times and in the manner specified in the Indenture by the irrevocable deposit in trust with UMB Bank, N.A., as escrow agent (the "Escrow Agent"), pursuant to the terms of (i) the Notice of Defeasance and Redemption dated November 1, 2017 from the Authority, and (ii) the Escrow Letter of Instructions dated November 1, 2017 (the "Escrow Agreement"), of cash and direct non -callable obligations of the United States of America, the deposit and receipt of which the Trustee hereby acknowledges, which will mature as to principal and interest in such amounts and at such times as will provide sufficient moneys to make such payments; and all other sums payable under the Indenture have been paid or provided for. 2. The Trustee has received irrevocable instructions from the Authority in accordance with the Indenture to (a) call the Defeased Bonds as described in Schedule 1, for discharge and payment on the dates specified in Schedule 1, pursuant to the Indenture, at the redemption prices equal to those specified in Schedule 1 of the principal amount thereof, plus accrued interest thereon to the redemption date, (b) give notice of such redemption to the owners of the Defeased Bonds and otherwise in accordance with the requirements of the Indenture, and (c) take all other action necessary to effect the call, redemption and prepayment of such Bonds as provided herein. 3. The Trustee has been furnished with an opinion of Gilmore & Bell, P.C., Special Counsel, to the effect that all conditions precedent to the satisfaction and discharge of the Defeased Bonds have been complied with, and provision for the payment, discharge and satisfaction of the Defeased Bonds through the deposit in trust of cash and the escrowed securities will not cause the interest on the Defeased Bonds to become included in gross income for federal income tax purposes. 4. To the knowledge of the undersigned, all conditions precedent to the satisfaction, discharge and defeasance of the Defeased Bonds contained in the Indenture have been complied with, and the Defeased Bonds are deemed to be paid and discharged in accordance with the requirements of the Indenture. 5. The Trustee waives any requirements in the Indenture for notice to the Trustee regarding the redemption of the Defeased Bonds. DATED: November 1, 2017. UMB BANK, N.A. as Trustee and Paying Agent Trustee Defeasance and Redemption Certificate v By: Name: Anthony P. Hawkins Title: Vice President Trustee Defeasance and Redemption Certificate SCHEDULE PAYMENT SCHEDULE FOR DEFEASED BONDS Bond Total Payment Date Principal Premium Interest Payment 12/01/2017 $19,665,000 -0- $79,107.29 $19,744,107.29 Trustee Defeasance and Redemption Certificate UNDERWRITER'S RECEIPT FOR BONDS AND CLOSING CERTIFICATE $18,370,000 THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF RIVERSIDE, MISSOURI INDUSTRIAL DEVELOPMENT REVENUE REFUNDING BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT) SERIES 2017 The undersigned, as representative of Stifel, Nicolaus & Company, incorporated, the underwriter of the above -referenced bonds (the "Underwriter"), certifies and represents as follows: Capitalized terms not defined herein shall have the meanings set forth in the Bond Trust Indenture dated as of November 1, 2017 (the "Indenture"), between The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") and UMB Bank, N.A., as trustee (the "Trustee"). 1. Receipt for Bands. We hereby acknowledge receipt on the date hereof from the Authority of the above-described Bonds (the "Bonds"), in the principal amount of $18,370,000, said Bonds consisting of fully registered Bond numbered consecutively upward by series in the initial denominations of $5,000 or any integral multiple thereof dated as of the date hereof, issued under the Indenture. We have confirmed that said Bonds have been credited to our account at the Depository Trust Company and are in a form acceptable to the Underwriter. 2. Public Offering. All of the Bonds have been the subject of an initial offering to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of purchasers or wholesalers) made pursuant to the Bond Purchase Agreement dated October 19, 2017, at prices no higher than those shown on the inside cover of the Official Statement prepared in connection with the issuance of the Bonds (the "Offering Prices"). This certificate may be relied upon by the Authority, the City and the Trustee in executing and delivering the Tax Compliance Agreement, and by Gilmore & Bell, P.C., Bond Counsel, in rendering its opinion relating to the exclusion from federal gross income of the interest on the Bonds. [Remainder of page intentionally blank.] DATED: November 1, 2017. STIFEL, NICOLAUS & COMPANY, INCORPORATED By: Title: s :rF c -�,✓ ,✓c -2- Trustee's Closing Certificate IDA Riverside (Horizons Project), Series 2017 ISSUE PRICE CERTIFICATE The Industrial Development Authority of the City of Riverside Missouri $18,370,000 Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 The undersigned, Stifel, Nicolaus & Company, Incorporated ("Stifel"), hereby certifies as set forth below with respect to the sale and issuance of the above -captioned obligations (the "Bonds"). 1. Purchase Contract On October 19, 2017 (the "Sale Date"), Stifel and the Issuer executed a Purchase Contract (the "'Purchase Contract") in connection with the sale of the Bonds. Stifel has not modified the Purchase Contract since its execution on the Sale Date. 2. Price. As of the date of this Certificate, the first price or prices at which at least 10% of such Maturities of the Bonds was sold to the Public (the "10% Test") are the respective prices listed in Schedule A attached hereto. Defined Terms. (a) "Issuer" means The Industrial Development Authority of the City of Riverside, Missouri. (b) "Maturity" means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (c) "Public" means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d) "Underwriter" means (i) any person that agrees pursuant to a written contract with the Issuer (or with Stifel to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Compliance Agreement of the Issuer dated as of November 1, 2017, and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. 10/20/17 06:28 AM STIFEL MO FINAL PRICING RE: $ 18,370,000 RIVERSIDE (CITY OF), MISSOURI INDUSTRIAL DEVELOPMENT AUTHORITY REVENUE REFUNDING BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT) SERIES 2017 FINAL PRICING AS FOLLOWS: Neg MOODY'S: S&P: A FITCH: DATED:11/01/2017 FIRST COUPON:05/01/2018 DUE: 05/01 INITIAL TRADE DATE: 10/20/2017 @ 11:30AM Eastern CALL FEATURES: No optional call ***State Blue Sky Eligibility: May be distributed to Retail Investors in all states ADD 'L TAKEDOWN MATURITY AMOUNT COUPON PRICE ( Pts ) CUSIP 05/01/2018 2,000M 2.00% 1.20 3/8 769166BC2 (Approx. $ Price 100.397) 05/01/2019 2,095M 3.00% 1.40 3/8 769166BDO (Approx. $ Price 102.366) 05/01/2020 2,160M 3.00% 1.58 3/8 769166BE8 (Approx. $ Price 103.467) 05/01/2021 2,225M 4.00% 1.72 3/8 769166BF5 (Approx. $ Price 107.712) 05/01/2022 2,310M 4.00% 1.91 3/8 769166BG3 (Approx. $ Price 108.971) 05/01/2023 2,405M 5.00% 2.07 3/8 769166BHI (Approx. $ Price 115.157) 05/01/2024 2,525M 5.00% 2.24 3/8 769166BJ7 (Approx. $ Price 116.608) 05/01/2025 2,650M 5.00 2.39 3/8 769166BK4 (Approx. $ Price 117.823) CALL FEATURES: No optional call ***State Blue Sky Eligibility: May be distributed to Retail Investors in all states except New Hampshire** The compliance addendum MSRB Rule G-11 will apply. The Award is expected on Thursday, October 19, 2017 at 6:29PM Eastern Delivery is firm for Wednesday, November 1, 2017. This issue is book entry only. This issue is clearing through DTC. Award: Award Time: Delivery: Initial trade: Date of Execution: Time of Execution: 10/19/2017 6:29PM Eastern 11/01/2017 (Firm) 10/20/2017 10/20/2017 11:30AM Eastern Stifel, Nicolaus & Company, Inc. By: Stifel, Nicolaus & Company, Inc. St. Louis, MO 10/27/2017 12:11:19 PM Deal Code: MORIVERSIDE1017 UM STIFEL STIFEL 1 Orders and Allotments by Maturity 18,370,000. RIVERSIDE (CITY OF), MISSOURI INDUSTRIAL DEVELOPMENT AUTHORITY REVENUE REFUNDING BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT) SERIES 2017 2,000 Bonds 05/01/2018 Cusip: 769166BC2 Coupon: 2.000 Price: 1.2000 Concession: Takedown: 0.3750 Ord # Orders Alloted Alt # Retail Type Price 5 2,000. 1,000. 1 No MEM 1.20-3/8P 7 2,000. 1,000. 2 No MEM 1.20-3/8P STIFEL 4,000. 2,000. 4,000. 2,000. Totals 2,000. 2,000. Maturity Size -2,000. . Balance Comment Entered: 10/19/2017 10:17:04 AM; Entered: 10/19/2017 10:52:18 AM; 10/27/2017 12:11:19 PM 2 Orders and Allotments by Maturity 18,370,000. RIVERSIDE (CITY OF), MISSOURI INDUSTRIAL DEVELOPMENT AUTHORITY REVENUE REFUNDING BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT) SERIES 2017 2,095 Bonds 05/01/2019 Cusip: 7691669DO Coupon: 3.000 Price: 1.4000 Concession: Takedown: 0.3750 UIW Ord # Orders Alloted Alt # Retail Type Price Comment STIFEL 15 40. 25. 3 Yes MEM 1.40-3/8P 'Entered: 10/19/2017 2:46:25 PM; STIFEL 16 2,077.! 2,070. 16 No MEM 1.40-3/8P Entered: 10/23/2017 4:26:55 PM; STIFEL 2,117. 2,095. 2,117. 2,095. Totals 2,095. 2,095. Maturity Size -22. . Balance 10/27/2017 12:11:19 PM 3 Orders and Allotments by Maturity 18,370,000. RIVERSIDE (CITY OF), MISSOURI INDUSTRIAL DEVELOPMENT AUTHORITY REVENUE REFUNDING BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT) SERIES 2017 2,160 Bonds 05/01/2020 Cusip:769166BE8 Coupon: 3.000 Price: 1.5800 Concession: Takedown: 0.3750 UM Ord # Orders Alloted Alt # Retail Type Price STIFEL 9 1,500. 1,500. 4 No MEM 1.58-3/8P STIFEL 1,500. 1,500. 1,500. 1,500. Totals 2,160. 2,160. Maturity Size 660. 660. Long Comment Entered: 10/19/2017 1:26:02 PM; 10/27/2017 12:11:19 PM 4 Orders and Allotments by Maturity 18,370,000. RIVERSIDE (CITY OF), MISSOURI INDUSTRIAL DEVELOPMENT AUTHORITY REVENUE REFUNDING BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT) SERIES 2017 2,225 Bonds 05/0112021 Cusip: 769166BF5 Coupon: 4.000 Price: 1.7200 Concession: Takedown: 0.3750 UM Ord # Orders Alloted Alt # Retail Type Price Comment STIFEL 6 750. 750. 5 No MEM 1.72-3/81 Entered: 10/19/2017 10:48:09 AM; STIFEL 10 1,570.' 1,475. 6 No MEM ,1.72-3/81 Entered: 10/19/2017 1:27:24 PM; STIFEL 2,320. 2,225. 2,320. 2,225. Totals 2,225. 2,225. Maturity Size -95. . Balance 10/27/2017 12:11:19 PM 5 Orders and Allotments by Maturity 18,370,000. RIVERSIDE (CITY OF), MISSOURI INDUSTRIAL DEVELOPMENT AUTHORITY REVENUE REFUNDING BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT) SERIES 2017 2,310 Bonds 05/01/2022 Cusip: 769166BG3 Coupon: 4.000 Price: 1.9100 Concession: Takedown: 0.3750 U/w Ord # Orders Alloted Alt # Retail Type Price STIFEL 1 1,500. 1,500. 8 No MEM 1.91-3/813 STIFEL 8 50. 50. 7 No MEM 1.91-3/8P STIFEL 11 865. 760. 9 No MEM 1.91-3/8P STIFEL 2,415. 2,310. 2,415. 2,310. Totals 2,310. 2,310. Maturity Size -105. . Balance Comment Entered: 10/19/2017 10:05:41 AM; Entered: 10/19/2017 10:55:44 AM; Entered: 10/19/2017 1:27:24 PM; 10/27/2017 12:11:19 PM 6 Orders and Allotments by Maturity 18,370,000. RIVERSIDE (CITY OF), MISSOURI INDUSTRIAL DEVELOPMENT AUTHORITY REVENUE REFUNDING BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT) SERIES 2017 2,405 Bonds 05/01/2023 Cusip: 769166BH1 Coupon: 5.000 Price: 2.0700 Concession: UMI Ord # Orders Alloted Alt # Retail STIFEL 2 2,405. 1,905. 10 No STIFEL 12 500. 500. 11 No STIFEL 2,905. 2,405. 2,905. 2,405. Totals 2,405. 2,405. Maturity Size -500. . Balance Takedown: 0.3750 Type Price MEM 2.07-3/8P MEM 2.07-3/813 Comment Entered: 10/19/2017 10:05:41 AM; Entered: 10/19/2017 1:30:20 PM; 10/27/2017 12:11:19 PM 7 Orders and Allotments by Maturity 18,370,000. RIVERSIDE (CITY OF), MISSOURI INDUSTRIAL DEVELOPMENT AUTHORITY REVENUE REFUNDING BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT) SERIES 2017 2,525 Bonds 05/01/2024 Cusip:769166BJ7 Coupon: 5.000 Price: 2.2400 Concession: UM Ord # Orders Alloted Alt # Retail STIFEL 3 2,525. 2,025. 12 No STIFEL 13 500. 500. 13 No STIFEL 3,025. 2,525. 3,025. 2,525. Totals 2,525. 2,525. Maturity Size -500. . Balance Takedown: 0.3750 Type Price MEM 2.24-3/8P MEM 2.24-3/8P Comment Entered: 10/19/2017 10:05:41 AM; Entered: 10/19/2017 1:30:20 PM; 10/27/2017 12:11:19 PM UM STIFEL STIFEL 8 Orders and Allotments by Maturity 18,370,000. RIVERSIDE (CITY OF), MISSOURI INDUSTRIAL DEVELOPMENT AUTHORITY REVENUE REFUNDING BONDS (RIVERSIDE HORIZONS INFRASTRUCTURE PROJECT) SERIES 2017 2,650 Bonds 05/01/2025 Cusip: 769166BK4 Coupon: 5.000 Price: 2.3900 Concession: Ord # Orders Alloted Alt # Retail 4 2,650. 2,150. 14 No 14 500. 500. 15 No STIFEL 3,150. 2,650. 3,150. 2,650. Totals 2,650. 2,650. Maturity Size -500. . Balance Takedown: 0.3750 Type Price MEM 2.39-3/8P MEM 2.39-3/8P Comment Entered: 10/19/2017 10:05:41 AM; Entered: 10/19/2017 1:30:20 PM; The Industrial Development Authority of the City of Riverside, Missouri $18,370,000 Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 Closing Date: November 1, 2017 ;0-ettlement: Upon confirmation that the wire transfer has been received and upon approval from Bond Counsel that all other matters are in order, UMB Bank will authorize release of the Bonds to DTC. Rrliilz lalff�t1990030fl�- � Obligor City of Riverside �, Donna Oliver 816) 741-3993 and Counsel Gilmore & Bell, P.C. MUNICIPAL ADVISORS Gary Anderson (816) 218-7523 Rick McConnell (816) 218-7568 Financial Advisor Columbia Capital Management, LLC Dennis Lloyd (913) 312-8050 Jim Prichard (913) 312-8072 Underwriter Stifel, Nicolaus & Company, Inc. Peter CzaJkowski (314) 342-2165 Trevor McDonagh (314) 342-8970 Underwriter's Counsel Lewis Rice LLC David Brown (314) 444-1341 Trustee / Escrow Agent UMB an, N.A. Anthony Hawkins (816) 860-3014 Doug Hare (816) 860-3006 OnTarlyffin", , Principal Amount of the Bonds $18,370,000.00 Reoffering Premium 1,767,404.35 Transfer from Series 2007 Debt Service Reserve Fund _3,452,215.24 Total Sources $23,589,619.59 Uses of Funds Deposit to Escrow Fund Deposit to Debt Service Reserve Fund Debt Service Reserve Fund Release to the City Deposit to Costs of Issuance Account Underwriter's Discount $19,744,107.29 1,000,000.00 2,452,215.24 20%59 06 183,700.00 �-', $23,589,619.59 Total Uses �, COLUMBIA CAPITAL MUNICIPAL ADVISORS Bank Name: CUSIP ABA Number: ... . . . ........ Maturity (769166) Coupon Yield Principal Price Dollar Price 05/01/2018 BC2 2.000% 1.200% 2,000,000.00 100.397%2,0V_,94+ff*_ 05/01/2019 BDO 3.000% 1.400% 2,095 000.00 102.366% 2,144,567.70 05/01/2020 BE3 1000% 1.580% 2J6000.00 103.467% 2,234,887.20 05/01/2021 BF5 4.000% 1.720% 2225,000.00 107.712% 2,396,592.00 05/01/2022 BG3 4,000% 1.910% 2,310,000M 108.971% 2,517,230.10 05/01/2023 BH1 5M0% 2.070% 2,405,000.00 115J57% 2,769,525.85 05/01/2024 BJ7 5.000% 2.24o% 2,52500 .00 116.608% 2,944,352.00 05/01/2025 BK4 5.000% 2.390% 2,650,000.00 117.823% 3,122,309.50 Net Proceeds $20,137,404.35 Less Underwriter's Discount (183,700.00) Purchase Price / Wire at Closing $19,953,704.35 Bank Name: UMB Bank, N.A. ABA Number: TRUST DEPARTMENT '';r111r: -- ----- — Riverside Series 2017, Attn Hawkins Arab i On Wednesday, November 1, 2017, UMB Bank shall transfer $1,000,000.00 from the Refunded Bonds debt service reserve fund to the Escrow Fund. The Trustee / Escrow Agent shall deposit the monies received at closing ($19,953,704.35) along with the $1,000,000.00 transferred from the Refunded Bonds debt service reserve fund as outlined below - Escrow Fund $19,744,107.29 Series 2017 Debt Service Reserve Fund 1,000,000.00 Cost of Issuance Fund 209,597.06 Total $20,953,704.35 The Escrow Agent shall invest the monies in the Escrow Fund in previously subscribed State and Local Government Securities. Any interest earnings shall be deposited in the Series 2017 Debt Service Account. COLUMBIA CAPITAL Page 2 MUNICIPAL ADVISORS Upon confirmation of closing, the Trustee shall deliver the remaining securities and monies held in the Refunded Bonds reserve fund to the City per the instructions below. The City previously provided written instructions to transfer the assets. BK ofNYC/Ameritrade ABA# - 021000018 ade "8 Agent Bank# - 50199 Institution# - 50199 0188 (For further credit to) Refunded Bonds Refunded Principal Accrued Interest Total Series 2007A $15,295,000.00 $62,717.79 $15,357,719.79 Series 2007B 4,370,000.00 16, 0 4,396,387.50 Total $2,340,0K00 $79,105.29 $19,744,10729 COLUBIA CAPITAL Page 3 M MUNICIPAL ADVISORS UGC FINANCING STATEMENT 1 File Number: 1711019662675 Date Filed: 11/1f201711:19 AM JohnR.ft . . Ashcroft 221_1000 Secretary of State B E-MAIL CONTACT AT FILER (Optional) I -demoss ilmorebeli.com C. SEND ACKNOWLEDGMENT TO: (Name and Address) Gilmore & Bea, P. C. 2405 Grand Blvd., Suite 1100 Kansas City, MO 64108 THE ABOVE SPACE 1S FOR FILING OFFICE USE ONLY Page 1 of 1 1. DEBTOR'S NAME: Provide only got Debtor name (1 a or 1 b) (use exact, U name; do not ons, modiry, or abbreviate any part of the Debtors nems); if any part of the individual Debtor's name vdll rot at in the line 1b, leave all of sem 1 blank check here and provide the individual Debtor information in sem 10 or the Financing Statement Addendum (Form UCCIAD) 1 a. ORGANIZATION'S NAME The Industrial Development Authority of the City of Riverside, Missouri OR h I tb.INDIVIDUAL'SSURNAME FIRST PERSONAL NAME I ADDITIONAL NAME(S)IINITIALS i SUFFIX 1c. MAILING ADDRESS CITY STATE I POSTAL CODE COUNTRY 2850 NW Vivion Road Riverside MO 164150 USA 2 DEBTOR'S NAME: Provide only gg Debtor name (2a or 2b) (use exact. full name; do not oink, moday, or abbreviate any part of the Debtors name); Y any part of the individual Debtors name wall not da in the line 2b, leave at of sem 2 blank, check here --j and provide the Individual Debtor IMormMkm In sem 10 of the Financing Statement Addendum (Form UCCIAD) OR 2a. ORGANIZATION'S NAME 2b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME 2c. MAILING ADDRESS ITY ADDITIONAL NAM£(S)ANITIALS STATE I POSTAL CODE 3. SECURED PARTY'S NAME (or NAME of ASSIGNEE of ASSIGNOR SECURED PARTY): Provide only one Secured Party name (3a or 3b) 3a. ORGANIZATION'S NAME UMB Bank, N.A., as Trustee SUFFIX COUNTRY DR 3b.INDIVIDUACSSURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)IINITIAL(S) SUFFIX 3c. MAILING ADDRESS CITY STATE I POSTAL CODE COUNTRY 1010 Grand Blvd., 4th Floor Kansas City MID 164106 USA 4. COLLATERAL: This financing statement covers the following collateral: AI property included in the Trust Estate under that certain Bond Trust Indenture dated as of November 1, 2017, between Debtor and Secured Pa4 as the same may be amended from time to time, and products and proceeds thereof, including without Imitation. accounts, general intangibles, investment property, chattel paper, deposit accounts and instruments. S. Check only if applicable and ordvone box: Colateral is Ljheld in a Trust (sae UCC1 Ad Reran 17 and Instructions) 0 being atlrrdnistared by a DecederN's Personal Representative :a. Chackoon ( if aafkcable and anN one box: 6b. Gbeck only it apokcable and orw one box: ❑ PbblaFinance Transaction E]Manufactured-Horne Transaction EIA Debtor is a Transmitting Utility E]Agricukurei Lien E] Ndn-UCC Fins 7. ALTERNATIVE DESIGNATION (if applicable):©Lessee/Lassor ]Consignee/Consignor QSOOr/Buyer ©SaleaBalor []Licensse/Licansor S. OPTIONAL FILER REFERENCE DATA UCC FINANCING STATEMENT (FORM UCC11) (REV. 08128/2013) LETTER OF REPRESENTATION The Depository Trus# Company AK*ddaryofThe nopndEoryTWd&CiowftCc*o atloa BLANKET ISSUER LETTER OF REPRESENTATIONS rrobeCmWkbdbyhomer wdCoiau**( tEappliabkl THE INDUSTRIAL DMMLQMM AtlTZfBITY...-OZ TAX CITY OF111311 1, MISSOURI P =q Orb 40d Co4WA*k irwff0bbJ Acral 27. 2007 Fag [For Municipal bum Underwriting Deparbnant—Migibtllty; 25th Floor) [For Corporate lan General Counsel's Office, 22nd Ploorl The Depository TtmstCompsny 55Water street New York NY !0041.0099 Ladies and Gentlemen: This letter sets forth our underotanift with moped to an bsues (the "Secaddee) that issuer shall request be made d%We for deposit by The Depositary Trust Company ("DTC"). To induce DTC to accept ibe Securities as eligible for deposit at DTA and to ad in acoordam with DTCs Rules with respect to the Secwities, Lauer represents to DTC that Lauer win comply with the mquimmento stated in DTCs Operational Arrangement;, as they may be a nendod cram tlme to time. bl". Sdie"Amaids stiow odwDICbriewsaau- n1dY dammiu DI+C d w=WWaEdkfirWbook-=" teamknef dddboted@imnlh=mdcer The taintdakdaoltems. Received and Accepted: THE DEPOSITORY ST COMPANY At AIL - Very truly youm IndustrJA Daveloomih Antbority of the City of ry s) ERide, Niesouri O�od') Wawae Sander 2950 NW Vivion Road PhidAddun) 114VAmi946y M _ USA 6415(!__, (CRY) obw (C-ny) tP CG&) f $16 t 741-3993Pkwd�w � AA&w) SCHEDULE A (To Blanket Issuer Letter of Representations) SAMPLE OFFERING DOCUMENT LANGUAGE DESCRIBING BOOK -ENTRY -ONLY ISSUANCE (Prepared by DTC—bracketed material may be applicable only to certain issues) 1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an author- ized representative of DTC. One fully -registered Security certificate will be issued for [each issue of] the Securities, [each] in the aggregate principal amount of such issue,and will be deposited with DTC. [If, however, the aggregate principal amount of [any] issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.] 2. DTC, the world's largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2.2 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facil- itates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clear- ing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation and Emerging Markets Clearing Corporation (NSCC, FICC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual pur- chaser of each Security ("Beneficial Owner")is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transac- tion, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book -entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are regis- tered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity [3/05] of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory require- ments as may be in effect from time to time. [Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For exam- ple, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.] [6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.] 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's prac- tice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail infor- mation from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, dis- bursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. [9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to [Tender/Remarketing] Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to [Tender/Remarketing] Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book -entry credit of tendered Securities to [Tender/Remarketing] Agent's DTC account.] 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 11. Issuer may decide to discontinue use of the system of book -entry -only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof. [3/051 v v City of Riverside 2950 NW Vivion Road Riverside, MO 64150 Attention: Ms. Donna Oliver, Finance Officer # to us and in relevant documents, as soon as such information is available. Relevant financial and other information includes, but is not limited to, information about direct bank loans and debt and debt -like instruments issued to, or entered into with, financial institutions, insurance companies and/or other entities, whether or not disclosure of such information would be required under S.E.C. Rule 15c2-12. 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The applicable Terms and Conditions are incorporated herein by reference. 130 East Randolph S&P Gtobal Street Suite 2900 Chicago, IL 60601 Ratings tel 312-233-7000 reference no,: 1499406 City of Riverside 2950 NW Vivion Road Riverside, MO 64150 Attention: Ms. Donna Oliver, Finance Officer # to us and in relevant documents, as soon as such information is available. Relevant financial and other information includes, but is not limited to, information about direct bank loans and debt and debt -like instruments issued to, or entered into with, financial institutions, insurance companies and/or other entities, whether or not disclosure of such information would be required under S.E.C. Rule 15c2-12. You understand that S&P Global Ratings relies on you and your agents and advisors for the accuracy, timeliness and completeness of the information submitted in connection with the rating and the continued flow of material information as part of the surveillance process. 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No person is intended as a third party beneficiary of any credit rating engagement or of a credit rating when issued. ! s * iating Ts RatingsDirecto ME= Riverside, Missouri Riverside Industrial Development Authority; Appropriations; General Obligation Primary Credit Analyst- Fric.1 War�IgL Ckic,?-g 233-7Oq4- Secondary Contact- rd- c4i 1)312 - Table Of Contents — ................... ............. ....... —.- ........ W.W471M WWW.STAND ARDANDPOORS.COM/RATINGSH IRECT OCTOBER 5, 2017 1 1926968 { 30252380 Riverside, Missouri Riverside industrial Development Authority; Appropriations; General Obligation US$18.925 mil indl dev rev rfdg brids (Riverside) ser 2017 due 05/01/2025 A/Stable New S&P Global Ratings assigned its 'A' long-term rating to the Riverside Industrial Development Authority, Mo.'s series 2017 industrial development revenue refunding bonds, issued for the city of RiversideAt the same time, we affirmed Z_A�1. rigyv-I X17*W.-Vk 11wi"4&iying debt. The outlook is stable. The series 2* 17 bonds are secured by the city —spfe—dg —eot'legally ave ailable-tUn—ds—,subject to annual appropriation—. TITe bonds are also secured by the city's third -lien pledge of incremental tax revenues, The city's existing appropriation 441*1 zlv# as the stronger security. Proceeds from the series 2017 bonds will be used to refund its 2007A and B bonds. • Weak economy, with access to a broad and diverse metropolitan statistical area (MSA), but a concentrated local twi base, • Strong management, with "good" financial policies and practices under our Financial Management Assessment (FMA) methodology,k • Adequate budgetary performance, with operating surpluses in the general fund and at the total governmental fund level in fiscal 2016; • Very strong budgetary flexibility with an available fund balance in fiscal 2016 of 61% of operating expenditures, • Very strong liquidity; with total government available cash at 54.4% of total governmental fund expenditures and 2,Ox governmental debt service, and access to external liquidity we consider strong; • Weak debt and contingent liability position, with debt service carrying charges at 26.6% of expenditures and net direct debt that is 110.0% of total governmental fund revenue, but rapid amortization, with all debt scheduled to be retired in 10 years-, and Adequate institutional framework score. Weak economy We consider Riverside's economy weak. The city, with an estimated population of 3,044, is on the Missouri River just north of downtown Kansas City in Platte County. It is in the Kansas City MSA, which we consider to be broad and diverse. It has a projected per capita effective buying income of 85.1% of the national level and per capita market value WWW.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 5* 2017 2 M6968 1302523280 Summary: Riverside, Missouri Riverside Industrial Development Authority, Appropriations; General Obligation of $144,000. Weakening Riverside's economy is a concentrated local tax base, with the 10 largest taxpayers accounting for 58.9% of the total tax base. The county unemployment rate was 3.6% in 2016. Based on its close proximity to Kansas City, residents have strong access to diverse employment opportunities downtown and throughout the MSA. The city's daytime population grows to approximately 10,000 due to employment in its industrial areas and at the Argosy casino. While the casino has significantly contributed to city revenues and increases in market value since its opening in 1994, it also represents nearly 29% of the city's total assessed value (AV). Such taxpayer concentration is a credit weakness, in our opinion. The city reports that AV increased considerably in 2017 due to property re -assessments. It is expecting additional market value growth due to new housing and industrial developments. While we expect market values to continue to increase, based on the high level of taxpayer concentration, we expect the economy to remain weak. Strong management We view the city's management as strong, with "good" financial policies and practices under our FMA methodology, indicating financial practices exist in most areas, but that governance officials might not formalize or monitor all of them on a regular basis. The city uses four -to -10 years of historical data, outside data sources, and line -item estimates to develop the budget. The board receives monthly budget -to -actual reports and the budget can be amended as necessary throughout the year. The city maintains five-year capital and financial plans. It has an investment policy and management reports holdings to the board monthly. It does not have a debt management policy. The city's informal reserve target is to maintain 12 months of general fund operating expenditures. Management recently increased its informal reserve target to 12 months (from six) of general fund expenditures. It had historically followed its prior reserve target. Adequate budgetary performance Riverside's budgetary performance is adequate, in our opinion. The city had operating surpluses of 3.8% of expenditures in the general fund and 18.0% across all governmental finds in fiscal 2016. The city is subject to performance volatility, in our opinion, because of its reliance on revenue related to the Argosy casino. In 2016, casino -related revenues accounted for 86% of general fund revenues (including transfers) and 48% of total governmental fund revenues. General fund operating performance has been positive since 2015. The city estimates a $3.5 million surplus in 2017 primarily due to it reporting gaming tax revenues in the general fund (as opposed to its capital improvement fund as it did previously). Management expects at least balanced results in 2018. While we expect budgetary performance to remain adequate over the next two years, the volatile nature of casino revenues could lead to future volatility in budgetary performance. Very strong budgetary flexibility Riverside's budgetary flexibility is very strong, in our view, with an available fund balance in fiscal 2016 of 61% of operating expenditures, or $6.0 million. We expect the available fund balance to remain above 30% of expenditures for the current and next fiscal years, which we view as a positive credit factor. The city reports no plans to draw down general fund reserves. With the expected general fund surplus in 2017 and at least balanced results in 2018, we expect budgetary flexibility to remain very strong. WWW.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 5, 2017 3 1926968 1302523280 Very strong liquidity In our opinion, Riverside's liquidity is very strong, with total government available cash at 54.4% of total governmental fund expenditures and 2.4x governmental debt service in 2016. In our view, the city has strong access to external liquidity if necessary. 'TEFF-7170-7strong access to external liquicaty, in our opinion, 6ecause it s igation last 20 years, We expect liquidity to remain very strong, bonds. The agreement requires the city to pay a portion of debt service on the district's 2017 bonds as well as replenish up to $1.4 million in the debt service reserve fund (subject to appropriation) should replenishment be necessary to meet reserve fund requirements. Based on the city's coverage of its share of debt service, through tax -increment finance (TIF) revenues, and the district's coverage of its share of debt service through the property tax levy, we do not view this cooperative agreement as a contingent liability risk to the city's liquidity Weak debt and contingent liability profile In our view, Riverside's debt and contingent liability profile is weak. Total governmental fund debt service is 26.6% of total governmental fund expenditures, and net direct debt is 110.0% of total governmental fund revenue. All of the direct debt is scheduled to be repaid within 10 years, which is, in bur view, a positive credit factor. The city has no additional debt plans over the next two years. It also has no private -placement or variable-rate debt outstanding. Based on its high debt service carrying charges, but rapid amortization, we expect debt and contingent liabilities to remain weak, U It I DR N !I The city participates in the Missouni Local Government Employees Retirement System, which is an agent ,#tiJtie&,Qlo r nensioit nhzji Itia =. Vile full P.ct4griQlj� determined contrNution to the Qlan e,2ch uar.-Pt 2016, the� Z77-777311P3,75M/0 funds on a pay-as-you-go basis, As of the latest actuarial Puly 2015), the unfunded actuarial accrued liability was $115,0004 Adequate institutional framework The stable outlook reflects Riverside's very strong reserves and liquidity and strong management conditions, It also reflects the city's access to the broad and diverse Kansas City MSA, which has a moderating effect on local economic fluctuations. We do not expect a rating change within the two-year outlook peniod WWW.STANDARDANDPOORS.COrd/RATINGSDIRECT OCTOBER 5, 2017 4 1926968 1302523280 Upside scenario If budgetary performance were sustained at an adequate level and taxpayer concentration moderated, we could raise the rating. Downside scenario If budgetary performance deteriorated and available reserves declined significantly, we could lower the rating, Related Research Long Term Rating A+/Stable Affirmed Riverside Indl Dev Auth, Missouri Riverside, Missouri Riverside Indl Dev Auth APPROP Long Term Rating A/Stable Affirmed Riverside Indl Dev Auth APPROP Long Term Rating A/Stable Affirmed Riverside Indl Dev Auth (Riverside) tax increment rfdg rev brids (L-385 Levee Proj) Long Term Rating A/Stable Affirmed jr, Unenhanced Rating A(SPUR)/Stable Many issues are enhanced by bond insurance. Please see Ratings Criteria at wwwstandardandpoors.com for further information. 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WWW.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 5, 2017 6 1926968 1302523280 GILMOkEBELL GILMORE & BELL PC 2405 GRAND BOULEVARD, SUITE 1100 KANSAS CITY, MISSOURI 64108-2521 816-221-1000 1816-221-1018 FAX GILMORESELL.COM November 1, 2017 The Industrial Development Authority of the City of Riverside, Missouri Riverside, Missouri City of Riverside, Missouri Riverside, Missouri UMB Bank, N.A., as Trustee Kansas City, Missouri UMB Bank, N.A., as Escrow Agent Kansas City, Missouri Re: $30,265,000 Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007A and $10,000,000 Industrial Development Revenue Bonds (Riverside Horizons Infrastructure Project — City of Riverside, Missouri), Series 2007B of the Industrial Development Authority of the City of Riverside, Missouri Ladies and Gentlemen: This opinion is delivered to you pursuant to pursuant to the Indenture of Trust (the "Indenture") dated as of November 1, 2017, between the Industrial Development Authority of the City of Riverside, Missouri (the "Authority") and UMB Bank, N.A., as trustee (the "Trustee"), under which the above - referenced bonds (the "Bonds") were delivered, in connection with the satisfaction, discharge and defeasance of the Bonds in accordance with the provisions of the Indenture. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Indenture. Provision has been made for the payment of the principal of, redemption price, if any, and interest due or to become due on all of the Bonds at the times and in the manner specified in the Indenture by the irrevocable deposit in trust with UMB Bank, N.A., as escrow agent (the "Escrow Agent"), pursuant to the Escrow Letter of Instructions dated November 1, 2017 (the "Escrow Agreement"), of cash and government securities that will mature as to principal and will pay interest in such amounts and at such times as will provide sufficient moneys to make such payments. We have examined the law and the Indenture, the Escrow Agreement and such other documents and certified proceedings as we deem necessary to render this opinion. As to questions of fact material to our opinion we have relied upon the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based on and subject to the foregoing, we are of the opinion, under existing law, as follows: 1. The Escrow Agreement has been duly authorized, executed and delivered by the Authority, and constitutes the valid and binding agreement of the Authority, enforceable against the Authority, except -2- November 1, 2017 ?s may be limited by bankruptcy, insolvency, reorganiZation, moratorium or other laws affecting creditors' rights generally and by equitable principles whether considered at law or in equity. 1 All conditions precedent to the satisfaction, discharge and defeasance of the Bonds contained in the Indenture have been complied with and the Bonds are deemed to be paid and discharged tder the Indenture. W-M-am"OHMMM WIN -Ila VC.&TIMMA of the Indenture and the Escrow Agreement, will not, in and of itself, cause the interest on the Bonds to become included in gross income for federal income tax purposes. We have not been requested to investigate, have not investigated, and do not express any opinion with respect to the effect on the original status of the interest on the Bonds for federal income tax purposes of any actions taken or omitted to be taken by the Authority or its affiliates with respect to the ownership, use or operation of the facilities financed or refinanced with the proceeds of the Bonds. This opinion is delivered to you for your use only and may not be used or relied upon by, or published or communicated to, any third party for any purpose whatsoever without our prior written approval in each instance. Very truly yours, i/// GlLMORF%'j,I,t the City of Riverside, Missouri J Riverside, Missouri GitMokEBELt GILMORE & BELL PC KANSAS CITY, MISSOURI 64108-2521 816-221-1000 1616-221-1018 FAX GILMOREBELL.COM November 1, 2017 I MAI I gm g JLM I MEN I thassvm=� St. Louis, Missouri Re8,370 ' 000 The Industrial Development Authority of the City of Riverside, missourl Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure), Series 2017 We have acted as bond counsel to The Industrial Development Authority of the City of Riverside, Missouri (the "Authority"), in connection with the issuance of the above -captioned bonds (the "Bonds"). This opinion supplements our approving legal opinion of even date herewith relating to the Bonds. We have examined the law and the certified proceedings, certifications and other documents that we deern necessary to render this opinion. The Bonds are issued under a Bond Trust indenture dated as ofNovember 1, 2017 (the "Indenture") by and between the Authority and UMB Bank, N.A,, Kansas City, Missouri, as Trustee (the "Trustee"). Capitalized terms used and not otherwise defined in this opinion have the meanings assigned in the Indenture. Regarding questions of fact material to Our Opinion, we have relied on the certified proceedings independent investigation. Based on and subject to the foregoing, we are of the opinion, under existingthat the Bonds are Indenture is exempt froul- qualification under the Trust Indenture Act of 1939, as amended. This opinion is delivered to you for your use onl and may not be used or relied on by any third y party for any purpose without our prior written approval in each instance. This opinion is given as of its date, and we assume no Obligation to revise Or s upplement this occur after the date of this opinion. Very truly yours, GILMOkEBELL GILMORE & BELL PC 2405 GRAND BOULEVARD, SUITE 1100 KANSAS CITY, MISSOURI 64108-2521 816-221-1000 1816-221-1018 FAX GILMOREBELL.COM November 1, 2017 The Industrial Development Authority of Stifel Nicolaus & Company, Incorporated the City of Riverside, Missouri St. Louis, Missouri Riverside, Missouri City of Riverside, Missouri Riverside, Missouri Re: $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure), Series 2017 Ladies and Gentlemen: We have acted as Bond Counsel to The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") in connection with the issuance of the above -captioned bonds (the "Bonds"), pursuant to the Bond Trust Indenture dated as of November 1, 2017 (the "Indenture") between The Authority and UMB Bank, N.A., as Trustee (the "Trustee). This opinion supplements our approving legal opinion of even date herewith related to the Bonds. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Indenture. We have examined the originals or copies, certified or otherwise identified to our satisfaction, of the final Preliminary Official Statement dated October 11, 2017, and the final Official Statement dated October 19, 2017 (collectively, the "Official Statement"), and such other documents, certificates, letters, opinions, records and other instruments as we deem necessary to render this opinion. In connection with the preparation of the Official Statement, we have generally reviewed information furnished to us by, and have participated in conferences with, representatives of the City, the City Attorney, and representatives of the Underwriter, and we have relied upon certificates of officials of such parties and of other public officials and persons as we have deemed appropriate. We are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of any of the statements contained in the Official Statement and make no representation that we have independently verified the accuracy, completeness or fairness of such statements. We have considered the information contained in the Official Statement and, based upon our review and discussions, and assuming the accuracy of the information contained in the aforementioned documents, certificates, opinions, letters, records and instruments, nothing has come to our attention which leads us to believe that the Official Statement contains any untrue statement of a material fact, or omits to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. We express no view, however, as to the statistical or financial information relating to the City included in Appendix A to the Official Statement, the Financial Statements of the City included in Appendix B to the Official Statement or any other financial, technical or statistical data or any estimates, projections, assumptions or expressions of opinions included in the Official Statement or any Appendix thereto. WA This opinion is delivered to you for your use only and may not be used or relied on by any third party for any purpose without our prior written approval in each instance. opinion to reiiect any Tac s or circuti xs LIIUL 11147 Q0111r, I*•vellu'vii *r Mg-UmmWO-S-ft occur after the date • this opinion. Very truly yours, GILMOP,E.BELL 11" /7"N GILMOREBELL GILMORE & BELL PC 2405 GRAND BOULEVARD. SUITE 1100 KANSAS CITY, MISSOURI 64108-2521 816-221-1000 1816-221-1018 FAX GILMOREBELL.COM The Industrial Development Authority of the City of Riverside, Missouri Riverside, Missouri City of Riverside, Missouri Riverside, Missouri November 1, 2017 UMB Bank, N.A., as Trustee Kansas City, Missouri Stifel Nicolaus & Company, Incorporated St. Louis, Missouri Re: $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017 Ladies and Gentlemen: We have acted as Bond Counsel to The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") in connection with the issuance of the above -referenced bonds (the "Bonds"). In this capacity, we have examined the law and the certified proceedings, certifications and other documents that we deem necessary to render this opinion. The Bonds are issued under Chapter 349 of the Revised Statutes of Missouri (the "Act"), and a Bond Trust Indenture dated as of November 1, 2017 (the "Indenture"), between the Authority and UMB Bank, N.A., as trustee (the "Trustee"). Capitalized terms used and not otherwise defined in this opinion have the meanings assigned in the Indenture. Regarding questions of fact material to our opinion, we have relied on representations of the Authority and the City of Riverside, Missouri (the "City") contained in the Financing Agreement and the Tax Compliance Agreement and certified proceedings and other certifications of the Authority, the City and others furnished to us, without undertaking to verify them by independent investigation. We have also relied on the legal opinion of Spencer Fane LLP, Special Counsel to the City, dated the date of this opinion, regarding certain matters, including (a) the corporate status and due organization of the City, (a) the power of the City to enter into and perform its obligations under the Financing Agreement and the Tax Compliance Agreement, and (b) the due authorization, execution and delivery of the Financing Agreement and the Tax Compliance Agreement by the City and the binding effect and enforceability of those documents against the City. Based on and subject to the foregoing, we are of the opinion, under existing law, as follows: 1. The Authority is validly existing as a body corporate and politic and public instrumentality under the laws of the State of Missouri (the "State"), including particularly the Act, with lawful power and authority to issue the Bonds and to enter into and perform its obligations under the Indenture, the Financing Agreement and the Tax Compliance Agreement. -2- November 1, 2017 2. The Bonds have been duty authorized, executed and delivered by the Authority and are valid and legally binding special, limited obligations of the Authority. 3. The Bonds are payable solely from, and secured by a valid and enforceable pledge and assignment of the Trust Estate, all in the manner provided in the Indenture. The Bonds do not constitute an "pwd , I hVATIIIIIIFr M-� iWftMW or statutory provision or limitation and do not constitute a pledge of the full faith and credit of the State or of any political subdivision of the State. The issuance of the Bonds will not, directly, indirect y or contingently, obligate the State or any political subdivision of the State to levy any form of taxation or to make any appropriation for the payment of the Bonds. 4The Indenture, the Financing Agreement and the Tax Compliance Agreement have been duly authorized, executed and delivered by the Authority and are valid and legally binding agreements of the Authority enforceable against the Authority. 5. The interest on the Bonds is excludable from gross income for federal income tax purpos and is not an item of tax preference for purposes of the federal alternative minimum tax imposed o individuals and corporations; however, such interest istaken into account in determiningadjuste currel earnings for the purpose of computing the alternative minimum tax imposed on certain corporations, Thil opinion set forth in this paragraph is subject to the condition that the Authority and the City comply wit all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfie frort, t e Bonds to be included in gross income tor b n# purposes retroactive to me Wine ot 177171 IT of the Bonds. The Bonds have not been designated as "qualified tax-exempt obligations" within th meaning of Section 265(b)(3) of the Code. We express no opinion regarding (a) the accuracy, completeness or sufficiency of the Official eTIT eycevtto-the-e��. if-an"ated Ila opinion. The rights of the owners of the Bonds and the enforceability of the Bonds, the Indenture, the Financing Agreement and the Tax Compliance Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and by equitable principles, whether considered at law or in equity. This opinion is given as of its date, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may come to our attention or any changes in law that may occur after the date of this opinion. Very truly yours, GILMOR,EBELL City of Riverside, Missouri Riverside, Missouri I I Riverside, Missouri W- ----------- St. Louis, Missouri Kansas City, Missouri M Lei SpencerFane, Re: $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 We have acted as counsel for The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") and, as such, in connection with the issuance and sale of the above -referenced Bonds, we have examined the following - (i) Minutes of the meetings and resolutions of the Authority; (ii) Bond Trust Indenture dated as of November 1, 2017 (the "Indenture") between the Authority and UMB Bank, N.A., as Trustee (the "Trustee"); (iii) Financing Agreement dated as of November 1, 2017 (the "Financing Agreement") between the Authority and the City of Riverside, Missouri, a city of the fourth class and political subdivision of the State of Missouri (the "City"); (iv) Tax Compliance Agreement dated as of November 1, 2017 among the Authority, the City and the Trustee; (v) Bond Purchase Agreement dated October 19, 2017 among the Authority, the City Stifel, Nicolaus & Company, Incorporated, as Underwriter; 1 (vi) Cooperation Agreement dated january 12, 2017 (the "Cooperation Agreement") among the Authority, the City, the Trustee, Platte County, Missouri and the Riverside-Quindaro Bend Levee District of Platte County, Missouri-, and ( I) ,vii Such other records and instruments of the Authority together with applicable certificateg and such other documents as we deem relevant in rendering this opinion. I I . The Authority is a body politic and corporate and a public instrumentality duly organized and existing under the Industrial Development Corporations Act, Chapter 349 of the Revised Statutes of Missouri, as amended, has all necessary power to carry on its present business, has full power, right and SPENCER FAKE LLP I I NORTH BRENTWOOD BOULEVARD, SUITE 1000, ST, LOUIS, MO 63105 3925 1 314,863.7733 1 FAX 314.862:4656 1 spencerfane.coni L 0 I SpencerFane, Documents") ' to issue the 5onas, to secure me 11kitel, 11"y UIV 111TCHLUM perforin each and all of the matters and things herein and therein provided fon 2. The Resolution of the Authority, adopted on October 3, 2017 (the "Resolution") with respect to the Bonds and the Authority Documents, was adopted pursuant to all applicable laws. The execution, delivery and performance by the Authority of the Authority Documents and the issuance of the Bonds have been duly authorized by all necessary action, and the Authority Documents and the Bonds constitute legal, valid and binding obligations of the Authority enforceable in accordance with their terms, except to the extent that enforceability may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally. 3. The execution, delivery and perfortnance by the Authority of the Bonds and the Authority Documents does not and will not violate (a) any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award as currently in effect to which the Authority is subject; (b) result in a breach of or constitute a default under the provisions of any ini-de—niure, loan or credit agreement or any other agreement, lease or instrument to which the Authority may be or is subject • by which it, or its property, is bound; or (c) result in, • require, the creation or imposition of any mortgage, deed of trust, assignment, pledge, lien, security interest or other charge or encumbrance of any nature or with respect to any of the properties of the Authority other than as provided therein, 4. No authorizations, consents, approvals, licenses, exemptions of or filings or registrations with any governmental commission, board, bureau, agency or instrurnentality, domestic or foreign, or otherwise is necessary to the issuance of the Bonds by the Authority or to the valid execution, delivery and performance by the Authority of t Documents. 5. There is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body pending or, to our knowledge, threatened against or affecting the Authori-.'WM,, wherein an unfavorable decision, ruliTdo, or finding would materially adversely affect (i) the transactions contemplated by, or the validity of, the Authority Documents or the Bonds, or (ii) the tax-exempt status of the interest on the Bonds, or (b) which in any way contests the existence, organization or powers of the Authority or the titles of the officers of the Authority to their respective offices. 6. Nothing has come to our attention which leads us to believe that the information in the Official Statement under the captions "INTRODUCTORY STATEMENT - The Authority," "THE AUTHORITY," and "LITIGATION — The Authority," as of the date hereof, and the information contained in the Preliminary Official Statement under the captions "INTRODUCTORY STATEMENT - The Authority," "THE AUTHORITY," and "LITIGATION — The Authority," as of its date, contains or contained any untrue statement of a material fact or omits or omitted to state any material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. Very truly yours, SPENCER FANS LLP d 1;oe 2 WA 10293 829. 1 Trie maustria ev opmen A-17,T�,�] City of Riverside, Missouri Riverside, Missouri City of Riverside, Missouri Riverside, Missouri St. Louis, Missouri Kansas City, Missouri 0.- SpencerFane, Re: $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project) Series 2017 We are counsel to the City of Riverside, Missouri, a city of the fourth class and political subdivision of the State of Missouri (the "City") and, as such, in connection with the issuance and sale of the above -referenced Bonds, we have examined the following (b) Bond Trust Indenture dated November 1, 2017 (the "Indenture") between the City and UMB Bank, N.A., as Trustee (the "Trustee"). (c) Financing Agreement dated as of November 1, 2017 (the "Financing Agreement") between The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") and the City. (d) Tax Compliance Agreement dated as of November 1, 2017 among the Authority, the City and UMB Bank, N.A., as Trustee (the "Trustee"). (e) Continuing Disclosure Agreement dated as of November 1, 2017 (the "Continuing Disclosure Agreement") executed by the City and the Trustee for the benefit of holders of the Bonds. (f) Bond Purchase Agreement dated as of October 19, 2017, among the Authority, the City and Stifel, Nicolaus & Company, Incorporated, as Underwriter. (g) Cooperation Agreement dated January 12, 2017 (the "Cooperation Agreement, among the Authority, the City, the Trustee, Platte County, Missouri and the Riverside-Quindati Bend Levee District of Platte County, Missouri. SPENCER FAKE LLP I I NORTH BRENTWOOD BOULEVARD, SWTE 1000, STLOUIS, MO 63105-3925 1 314,863,7733 1 FAX 314,862.4656 1 s pence rfane.co m M1 Le SpencerFane, (h) Such other records and instruments of the City and the Tax Increment Financinr-1 Commission of the City of Riverside, Missouri together with applicable certificates and su other documents as I deem relevant in rendering this opinion. 1. The City is a city of the fourth class and political subdivision of the State of Missouri, has all necessary power to carry on its present business, has full power, right and authority to enter into the documents described in paragraphs (b) through (g) above (the "City Documents") and to perform each and all of the matters and things herein and therein provided for. 2 *The Authorizing Ordinance authorizing the execution and o delivery f the City Documents was duly passed pursuant to all applicable laws and is in full force and effect. The execution, delivery and performance by the City of the City Documents has been duly authorized by all necessary action, an• the City Documents constitute legal, valid and binding obligations of the City enforceable in accordance with their terms, except to the extent that enforceability may be limited by bankruptcy, insolvency or other laws affecting, creditors' rights generally. The City has approved the Official Statement and its use and distribution. 3. The execution, delivery and performance by the City of the City Documents does not and Will not violate (a) any provision of anv law rule, regulation, order, writ, judgment, injunction, decree, determination or award as currently in effect to which the City is subject, (b) result in a breach of or constitute a default under the provisions of any indenture, loan or credit agreement or any other bound; or (c) result in, or require, the creation or imposition of any mortgage, deed of trust, assignment, pledge, lien, security interest or other charge or encumbrance of any nature or with respect to any of the properties of the City other than as provided therein. 4. The City has taken all necessary action in connection with (a) the approval of the T ci Redevelopment Plan and the Redevelopment Area (as those terms are defined in the Off Statement dated October 19, 2017 related to the Bonds the "Official Statement"), and (b) the adopti of tax increment financing with respect to the Redevelopment Area in the manner described in t Official Statement. 5. No authorizations, consents, approvals, licenses, exemptions of or filings or registrations with any governmental commission, city, bureau, agency or instrumentality, domestic or foreign, or otherwise is necessary for the valid execution, delivery and performance by the City of the City D•cuments. the city, (a) wnerem an untavoranic aecision, Twing Tr MiTing TIMM MUM lutty UNTELFT"'W"I transactions contemplated by, or the validity of the City Documents, or any agreement or instrument to which tile City is a party and which is used or coniemplated for use in the consummation of the transactions contemplated by the City Documents, or (b) which in any way contests the existence, organization or powers of the City or the titles of the officers of the City to their respective offices. 14 SpencerFane' 7. Nothing has come to our attention which leads us to believe that the information in the Official Statement under the captions "INTRODUCTORY STATEMENT - The City," "THE CITY," "PLAN OF FINANCING — The Project — The RedevelopmentDevelopment East of Horizons Parkway, - Development West of Horizons Parkway," "LITIGATION — The City," and "APPENDIX A — Information Concerning the City of Riverside, Missouri," as of the date hereof, and the information contained in the Preliminary Official Statement under the captions "INTRODUCTORY STATEMENT - The City .. . THE CITY, ' "PLAN OF FINANCING — The Project — The Redevelopment Plan � Development East of Horizons Parkway, - Development West of Horizons Parkway," "LITIGATION — The City," and "APPENDIX A — Information Concerning the City of Riverside, Missouri," as of i contains or contained any untrue statement of a material fact or omits or omitted tostate any material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. The City has approved the Official Statement and its use and distribution. SPENCER FAKE LLP 4" N LE W 1J RiCELLC 314.444.7600 (direct) 600 Washington Avenue 314.241.6056 (fax) Suite 2500 www.lewisrice.com Attorneys at Law St. Louis, Missouri 63101 November 1, 2017 Stifel, Nicolaus & Company, Incorporated- St. ncorporatedSt. Louis, Missouri Re: $18,370,000 The Industrial Development Authority of the City of Riverside, Missouri Industrial Development Revenue Refunding Bonds (Riverside Horizons Infrastructure Project), Series 2017 Ladies and Gentlemen: We have acted as counsel to Stifel, Nicolaus & Company, Incorporated, the underwriter (the "Underwriter") of the above -captioned bonds (the "Bonds"), in connection with the Underwriter's purchase of the Bonds pursuant to the Bond Purchase Agreement dated October 19, 2017 (the "Bond Purchase Agreement") among the Underwriter, The Industrial Development Authority of the City of Riverside, Missouri (the "Authority") and the City of Riverside, Missouri (the "City"). Capitalized terms used in this letter and not otherwise defined herein shall have the meanings given such terms in the Bond Purchase Agreement. This letter is being delivered pursuant to Section 3(d)(1)(ee) of the Bond Purchase Agreement. For purposes of this letter, we have assumed, without investigation: (1) the legal capacity of each natural person; (2) the full power and authority of each person other than the Underwriter and its officers to execute, deliver and perform each document heretofore executed and delivered or hereafter to be executed and delivered, and to do each other act heretofore done or hereafter to be done by such person; (3) the due authorization, execution and delivery by each person other than the Underwriter and its officers of each document heretofore executed and delivered or hereafter to be executed and delivered by such person; (4) the legality, validity, binding effect and enforceability as to each person other than the Underwriter and its officers of each document heretofore executed and delivered or hereafter to be executed and delivered (including, without limitation, the Continuing Disclosure Agreement, as defined below), and of each other act heretofore done or hereafter to be done by such person; (5) the genuineness of each signature on and the completeness of each document submitted to us as an original; (6) the conformity to the original of each document submitted to us as a copy; (7) the authenticity of the original of each document submitted to us as a copy; (8) no modification of any provision of any document nor waiver of any right or remedy; (9) no exercise of any right or remedy other than in a commercially reasonable and conscionable manner and in good faith; (10) that all covenants and requirements of the Bond Purchase Agreement have been, and will be, duly complied with and fulfilled and that all representations of fact made in the Bond Purchase Agreement, the Indenture, as defined below, and the Continuing Disclosure Agreement are true and correct; (11) there has been no oral or written agreement, understanding, course of dealing or usage of trade that affects the rights and obligations of the parties with respect to the transactions entered into in connection with the issuance of the Bonds other than instruments and documents reviewed by us; and (12) there has been no mutual mistake of fact or misunderstanding, fraud, duress or undue influence. In connection with the delivery of this letter, we have examined the following: (a) The Preliminary Official Statement dated October 11, 2017 (the "Preliminary Official Statement") relating to the Bonds; Established 1909 Uwis RICELLC November 1, 2017 Page 2 (b) The Official Statement dated October 19, 2017 (the "Official Statement') relating to the Bonds; (c) (i) the Bond Trust Indenture dated as of November 1, 2017 (the "Indenture") between the Authority and UMB Bank, N.A., as Trustee, (ii) the Continuing Disclosure Agreement dated as of November 1, 2017 (the "Continuing Disclosure Agreement") between the City and UMB Bank, N.A., as Dissemination Agent, and (iii) the Bond Purchase Agreement; (d) Executed copies of the opinion letters of Gilmore & Bell, P.C., bond counsel and disclosure counsel; (e) Executed copy of the opinion letters of Spencer Fane LLP, counsel to the Authority and the City; and (f) Such other documents and matters of law as we have deemed necessary in order to render the opinions and make the statements set forth in this letter. Except as otherwise stated herein, as to factual matters, we have, with your consent, relied upon written or oral statements of the City, the Authority and others, including the representations and warranties of the City and the Authority in the Bond Purchase Agreement and the Continuing Disclosure Agreement. Based upon and subject to the foregoing, we are of the opinion that: 1. The Bonds are exempt from registration under the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended. 2. The Continuing Disclosure Agreement complies with the requirements of paragraph b(5) of Rule 15c2-12 of the Securities Exchange Act of 1934, as amended, in effect as of the date hereof. In accordance with our understanding with you, we have rendered legal advice and assistance to you in the course of your investigation with respect to the Preliminary Official Statement and the Official Statement. Rendering such assistance involved, among other things, discussions and inquiries concerning various legal documents and proceedings, including the City's past compliance with its continuing disclosure undertakings. Such discussions and inquiries did not occur beyond the date of the Official Statement. Although we express no opinions regarding the Preliminary Official Statement or Official Statement, at your request, we advise you that, in the course of rendering such assistance, and although we have not undertaken to independently verify and assume no responsibility for the accuracy, completeness, fairness or sufficiency of the information in the Preliminary Official Statement or the Official Statement, nothing has come to our attention that leads us to reasonably believe that the information in the Preliminary Official Statement as of the date thereof, or the Official Statement as of the date thereof, contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, taken as a whole, not misleading (it being understood that we express no belief or opinion with respect to (i) any LEvAsRJCE,.,1C November 1, 2017 Page 3 financial, numerical Or statistical information included with or set forth in the Preliminary Olficial Statement or Official Statement or ornitted therefrom, (ji) any estimates, projections, assumptions or expressions of opinion set forth in the Preliminary Official Statement or the Official Statement and (Iii) infirmat4n with resy-ect t# aratters set f4rth in the Prelimin2ry *fficial Statement an4 the Official Statement Under the captions "THE SERIES 2017 BONDS — Book -Entry Only System," "CITY FINANCIAL SUMMARY," "LITIGATION," "TAX MATTERS," "Appendix B — Accountants' Report and Audited Financial Statements of the City of Riverside, Missouri for Fiscal Year Ended June 30, 2016" and "Appendix D — Form of Opinion of Bond Counsel." In further accordance with our understanding with you, we express no opinion or belief with respect to the validity of the Bonds or the taxation thereof or of the interest thereon, and our expression of belief with respect to the Preliminary Official Statement and the Official Statement assumes the validity of the Bonds, all as set forth in the opinions of bond counsel referred to above. The statements expressed herein are based upon existing law as of the date hereof and we assume no obligation to supplernent this letter if any applicable laws change after the date hereof or if we become aware of any facts that might change the statements expressed herein after the date hereof. The statements expressed herein are limited to the laws of the United States. This letter is issued in the State of Missouri and is governed by the laws of the State of Missouri without reference to conflicts of law principles. By issuing2:, this letter, Lewis Rice LLC (i) shall not be deemed to be transacting business in any other state orjurisdiction other than the State of Missouri and (ii) does not consent to the jurisdiction of any state other than the State of Missouri. Any claim or cause of action arising Out of this letter or the opinions expressed herein must be brought in the State of Missouri. This letter is solely for the use of the addressee named above and may not (other than inclusion of this letter in the final bond transcript) be released to or relied upon by any other persons without our prior written approval. This letter is limited to the matters set forth herein, and to the documents referred to herein and does not extend to any other agreements, documents or instruments executed by any parties in connection with the issuance of the Bonds, and no other statements or opinions should be inferred beyond the matters expressly stated herein. Very truly yours, LEWIS RICE LLC