MINUTES OF THE BOARD OF COMMISSIONERS' SPECIAL MEETING

LANSING BOARD OF WATER AND LIGHT

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Tuesday, September 2, 1999
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The Board of Commissioners met in Special Session at 11:45 a.m., in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan.  The meeting was called to order by the Chair, Diane Royal.

The Secretary declared a quorum present.

Chief Financial Officer Dana Tousley presented and reviewed changes made to Draft No. 3 of the Third Supplemental Revenue Bond Resolution Authorizing Water Supply, Steam and Electric Utility System Revenue Bonds of the City of Lansing, Michigan.  It was noted that if market conditions change to make it financially worthwhile to do a refunding, changes to the resolution could be adopted at the same time the Board adopts the selling resolution.

Following discussion, motion was made by Commissioner O’Leary, seconded by Commissioner Creamer, to approve the following resolution:

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THIRD SUPPLEMENTAL REVENUE BOND RESOLUTION AUTHORIZING
WATER SUPPLY, STEAM AND ELECTRIC UTILITY SYSTEM REVENUE BONDS
OF THE CITY OF LANSING, MICHIGAN

RESOLVED THAT:

Section 1.                Supplemental Resolution.  This Third Supplemental Revenue Bond Resolution is supplemental to, and is adopted in accordance with Section 23(a)(i) of, the Bond Resolution.

Section 2.                Definitions.  Unless the context indicates that another meaning is intended, the following words and terms used in this Third Supplemental Revenue Bond Resolution shall have the following meanings, and any other words and terms which are defined in Act 94 or in the Bond Resolution shall have the meanings as therein defined:

(i)              "Bond Resolution" means the Amended And Restated Bond Resolution adopted by the Board on October 24, 1989, as supplemented and amended from time to time.

(ii)             "Series 1999A Bonds" means the Water Supply, Steam and Electric Utility System Revenue Bonds, Series 1999A authorized by Section 4 of this Third Supplemental Revenue Bond Resolution.

(iii)            "Series 1994A Bonds" means the Water Supply And Electric Utility System Revenue Bonds, Series 1994A issued pursuant to the Bond Resolution.

(iv)           "Series 1994B Bonds" means the Water Supply And Electric Utility System Revenue Bonds, Series 1994B issued pursuant to the Bond Resolution.

(v)            "Series 1989A Bonds" means the Water Supply And Electric Utility System Revenue Bonds, Series 1989A issued pursuant to the Bond Resolution.

(vi)           "Series 1989B Bonds" means the Water Supply And Electric Utility System Revenue Bonds, Series 1989B issued pursuant to the Bond Resolution.

(vii)          "Series 1999A Sales Resolution" means the Resolution of the Board authorizing the sale and delivery of the Series 1999 Bonds.

(viii)         "1999 Project" means the remodeling, updating and extending the life of the water, steam, and electric utilities of the City of Lansing, including some or all of the following:  (i) capacity improvement and expansion of the filter press system at Dye Water Conditioning Plant, (ii) construction of electric transmission and distribution substations, (iii) the improvement and extension of a water distribution system in Dewitt, Michigan, (iv) construction of a water pumping station, and (v) construction of a chiller plant and related distribution system to serve a downtown chilled water district.

Section 3.                Necessity, Estimate of Cost and Useful Life.  It is determined to be necessary for the public health, safety and welfare of the City to remodel, update and extend the life of the System by acquiring the 1999 Project.  The estimated cost of the 1999 Project is $42,361,000 and the estimated useful life of the 1999 Project is not less than 30 years.

Section 4.                Authorization of Series 1999A Bonds.  To pay a portion of the cost of acquiring, constructing and equipping the 1999 Project, including making a deposit to a reserve fund and payment of legal, financial and other expenses of the issuance of the Series 1999A Bonds, the City, by and through the Board, shall borrow a sum not in excess of Fifty Million Dollars ($50,000,000), as finally determined in the Series 1999A Sales Resolution, which sum is presently estimated to be Forty-Nine Million Dollars ($49,000,000), pursuant to the provisions of Act 94.

Section 5.             Bond Details, Parameters and Security.                  The Series 1999A Bonds shall be designated "Water Supply, Steam And Electric Utility System Revenue Bonds, Series 1999A," shall be of equal standing in priority of lien on the Net Revenues of the System with the Series 1989A Bonds, the Series 1989B Bonds, the Series 1994A Bonds, the Series 1994B Bonds and any other Additional Bonds, shall be payable solely out of Net Revenues and any other moneys pledged under the Bond Resolution and shall not be a general obligation of the City.  Series 1999A Bonds shall be issued in denominations of $5,000 or any integral multiples of $5,000 not exceeding the amount of the Series 1999A Bonds maturing on the same date and shall be numbered in consecutive order of authentication from 1 upwards.  The Series 1999A Bonds shall be issued as fully registered bonds without coupons and shall have an original issuance date of their dated date, or such other date as the Board shall approve in the Series 1999A Sales Resolution.

The Series 1999A Bonds shall bear interest at a rate or rates to be determined in the Series 1999A Sales Resolution, not exceeding seven percent (7%) per annum, shall mature no later than July 1, 2020.  Interest shall be payable on January 1, 2000, or such other date as the Board shall approve in the Series 1999A Sales Resolution, and on each July 1 and January 1 thereafter, by check drawn on the Transfer Agent and mailed to each Registered Owner at the registered address, as shown on the registration books of the City maintained by the Transfer Agent.  Interest on the Series 1999A Bonds shall be payable to each Registered Owner as of the 15th day of the month prior to the date on which the interest payment is due.  Interest on the Series 1999A Bonds shall be computed on the basis of a 360-day year consisting of twelve 30-day months.  The principal of the Series 1999A Bonds shall be payable at the principal office of the Transfer Agent upon presentation and surrender thereof; provided, however, if part of an Outstanding Series 1999A Bond registered in the name of a securities depository company as part of a book-entry system is selected for redemption, the securities depository company may retain the Series 1999A Bond and make an appropriate notation on the Series 1999A Bond indicating the date and amount of the reduction in the principal amount of the Series 1999A Bond resulting from the partial redemption, however, in the case of the final payment of the remaining principal amount of the Series 1999A Bond, the Series 1999A Bond shall be presented and surrendered to the Transfer Agent as a condition of payment.  The aggregate principal amount of the Series 1999A Bonds, the amount of each maturity and the designation of serial and term bonds, if any, shall be as finally determined in the Series 1999A Sales Resolution.

The Series 1999A Bonds shall be subject to redemption as provided in the Series 1999A Sales Resolution.

Section 6.                Series 1999A Bond Proceeds.  From the proceeds of the sale of the Series 1999A Bonds, there shall be immediately deposited in (a) the Redemption Fund an amount equal to the accrued interest and premium, if any, received on delivery of the Series 1999A Bonds and the City shall receive a credit equal to the amount so deposited against the amount required to be deposited in the Redemption Fund for payment of the next maturing interest and (b) the Bond Reserve Account, the amount required by the Bond Resolution.  The remaining proceeds of the Series 1999A Bonds shall be used to pay the costs of acquiring the Series 1999 Project and to pay the costs of issuing the Series 1999A Bonds.

Section 7.             Book-Entry System - Series 1999A Bonds.  Initially, one fully-registered  Series 1999A Bond for each maturity, in the aggregate amount of such maturity, will be issued in the name of Cede & Co., as nominee of The Depository Trust Company, for participation in the book-entry transfer system of The Depository Trust Company.  In the event the City decides to discontinue participation in the book-entry transfer system of The Depository Trust Company (or a successor securities depository), the City shall notify the Transfer Agent and The Depository Trust Company, in writing, and thereafter the City shall execute and the Transfer Agent shall authenticate and deliver Series 1999A Bonds requested by the bondholders or to a successor securities depository.  In the event The Depository Trust Company discontinues providing services as a securities depository for the Series 1999A Bonds and the City does not designate a successor securities depository, the City shall execute and the Transfer Agent shall authenticate and deliver Series 1999A Bonds to the bondholders.

Section 8.             Bond Form.  The Series 1999A Bonds shall be in substantially the following form:

[SERIES 1999A BONDS]

UNITED STATES OF AMERICA

STATE OF MICHIGAN

INGHAM AND EATON COUNTIES

CITY OF LANSING

WATER SUPPLY, STEAM AND ELECTRIC UTILITY SYSTEM

REVENUE BONDS, SERIES 1999A

REGISTERED OWNER:

PRINCIPAL AMOUNT:

The CITY OF LANSING, Ingham and Eaton Counties, State of Michigan (the "City"), for value received, promises to pay the Principal Amount to the Registered Owner on the Maturity Date with interest thereon from the Date of Original Issue, or such later date to which interest has been paid, until paid at the Interest Rate Per Annum, payable on January 1, 2000, and on each July 1 and January 1 thereafter until the obligation of the City to pay the Principal Amount is satisfied.  Principal of this Bond is payable at the principal office of National City Bank of Michigan/Illinois, or such other transfer agent as the City may hereinafter designate by notice mailed to the registered owner not less than 60 days prior to any interest payment date (the "Transfer Agent").  Interest on this Bond is payable to the registered owner of this Bond as of the 15th day of the month next preceding the payment date as shown on the registration books of the City kept by the Transfer Agent by check or draft mailed to the registered owner at the registered address.  The revenues of the facilities of the City for the supply and distribution of water and the generation and distribution of electricity, steam and heat (the "System") after provision has been made for reasonable and necessary expenses of operation, maintenance and administration of the System (the "Net Revenues"), are irrevocably pledged and a statutory lien thereon has been created to secure the payment of the principal of and interest on this Bond, when due; however, the pledge of Net Revenues and the statutory lien are on a parity with the pledge of Net Revenues and statutory lien in favor of the City of Lansing's Water Supply and Electric Utility System Revenue Bonds, Series 1989A, its Water Supply and Electric Utility System Revenue Bonds, Series 1989B, its Water Supply and Electric Utility System Revenue Bonds, Series 1994A and its Water Supply and Electric Utility System Revenue Bonds, Series 1994B and any Additional Bonds (as defined below) which may be issued by the City.  Interest on this Bond shall be computed on the basis of a 360-day year consisting of twelve 30-day months.

This Bond is one of a series of bonds of like tenor, except as to denomination, rate of interest, date of maturity and prior redemption, aggregating the principal sum of $____________, issued pursuant to an Amended And Restated Bond Resolution adopted by the Board of Water and Light of the City (the "Board") on October 24, 1993, as supplemented from time to time, including by a Third Supplemental Revenue Bond Resolution adopted by the Board on September __, 1999 (collectively, the "Bond Resolution"), and under and in full compliance with the Constitution and statutes of the State of Michigan, including specifically Act 94, Public Acts of Michigan, 1933, as amended, for the purpose of paying part of the cost of remodeling, updating and extending the life of the System, making a deposit to a bond reserve account and paying the costs of issuing the bonds.

For a complete statement of the revenues from which and the conditions under which this Bond is payable, a statement of the conditions under which additional bonds ("Additional Bonds") of equal standing may hereafter be issued, the rights and limitations on the owners of the bonds and the general covenants and provisions pursuant to which this Bond is issued, reference is made to the Bond Resolution.

Bonds of this series maturing prior to July 1, _____, are not subject to redemption prior to their respective dates of maturity.  Bonds of this series maturing on and after July 1, ______, are subject to redemption prior to maturity, at the option of the Board, at any time on and after July 1, _____, in whole or in part, in the amount selected by the Board, in order of maturities selected by the Board and within a maturity by lot, at the redemption price of par, [without premium,] plus accrued interest to the date of redemption.

Notice of the call of Bonds for redemption shall be mailed to the registered owner not less than 30 days prior to the date fixed for redemption at the address shown on the registration books of the City.  Failure to receive such notice shall not affect the validity of the proceedings for redemption.  Bonds called for redemption shall not bear interest after the date fixed for redemption, provided funds are on hand with the Transfer Agent to redeem the bonds called for redemption.

This Bond is a self-liquidating bond and is not a general obligation of the City or the Board and does not constitute an indebtedness of the City or the Board within any constitutional, statutory or charter limitation, but is payable, both as to principal and interest, solely from the Net Revenues of the System.  The principal of and interest on this Bond are secured by a statutory lien on the Net Revenues of the System; provided however, the statutory lien securing this Bond is on a parity of security with the statutory lien securing the other Bonds of this series, the Series 1989A Bonds, the Series 1989B Bonds, the Series 1994A Bonds, the Series 1994B Bonds and any Additional Bonds which may be issued by the City.

The Board has covenanted and agreed, and covenants and agrees, to fix and maintain at all times while any bonds payable from the Net Revenues of the System shall be outstanding, such rates for service furnished by the System as shall be sufficient to provide for payment of the principal of and interest on the bonds of this issue and any other bonds payable from the Net Revenues as and when the same shall become due and payable, to provide for the payment of expenses of administration and operation and such expenses for maintenance of the System as are necessary to preserve the same in good repair and working order, and to provide for such other expenditures and funds for the System as are required by the Bond Resolution.

This Bond is transferable only upon the registration books of the City kept by the Transfer Agent by the Registered Owner hereof in person, or by his or her attorney duly authorized in writing, with a written instrument of transfer satisfactory to the Transfer Agent duly executed by the Registered Owner or his or her attorney duly authorized in writing, and thereupon a new registered bond or bonds in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor as provided in the Bond Resolution and upon the payment of the charges, if any, therein prescribed.  The City shall not be required to register the transfer of or exchange any Bond selected for redemption in whole or in part, except the unredeemed portion of bonds being redeemed in part.

It is certified and recited that all acts, conditions and things required by law precedent to and in the issuance of this Bond and the series of bonds of which this is one have been done and performed in regular and due time and form as required by law.

This Bond is not valid or obligatory for any purpose until the Certificate of Authentication on this Bond has been executed by the Transfer Agent.

IN WITNESS WHEREOF, the City of Lansing, Ingham and Eaton Counties, State of Michigan, by and through its Board of Water and Light, has caused this Bond to be executed with the facsimile signatures of its Chairman and its Secretary and the corporate seal of the City to be printed on this Bond.

 (Seal)

Certificate of Authentication

This Bond is one of the bonds described in the within-mentioned Bond Resolution.

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto __________________________________________________________________________

__________________________________________________________________________
(Please print or typewrite name and address of transferee)

__________________________________________________________________________

the within bond and all rights thereunder, and 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.

_____________________________

Signature(s) must be guaranteed by an eligible guarantor institution participating in a Securities Transfer Association recognized signature guaranty program.  The Transfer Agent will not effect transfer of this Bond unless the information concerning the transferee requested below is provided.

Name and Address:__________________

Section 9.             Tax Status.  The City covenants to comply with all requirements of the Internal Revenue Code of 1986, as amended, necessary to assure that the interest on the Series 1999A Bonds will be and will remain excludable from gross income for federal income tax purposes.

Section 10.                Preliminary Official Statement.  The preparation and distribution of a preliminary official statement in substantially the form presented at this meeting is approved, with such changes as the Chairperson or any Commissioner and the General Manager and Chief Financial Officer may, in consultation with the Staff Attorney and Bond Counsel, determine to be necessary or appropriate.

Section 11.           Staff Action.  The Board ratifies and confirms actions taken and filings made by Staff necessary to effectuate the sale of the Series 1999A Bonds, including filing for an exception from prior approval or approval with the Department of Treasury.  The Chairperson, any Commissioner, the General Manager and the Chief Financial Officer are severally authorized to execute such certificates and other documents and to take such other actions or make such other filings as may be necessary or convenient to effectuate the proper sale, execution and delivery of the Series 1999A Bonds.

Section 12.                Conflicting Resolutions.  All resolutions or orders, or parts thereof, in conflict with the provisions of this Third Supplemental Revenue Bond Resolution are repealed.

Section 13.                Severability and Paragraph Headings.  If any section, paragraph, clause or provision of this Third Supplemental Revenue Bond Resolution shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any other provisions of this Third Supplemental Revenue Bond Resolution.  The paragraph headings in this Third Supplemental Revenue Bond Resolution are furnished for convenience of reference only and shall not be considered to be a part of this Third Supplemental Revenue Bond Resolution.

Section 14.                Publication and Recordation.  This Third Supplemental Revenue Bond Resolution shall be published in full in The Lansing State Journal, a newspaper of general circulation in the City of Lansing qualified under State law to publish legal notices, promptly after its adoption, and shall be recorded in the minutes of the Board and such recording authenticated by the signatures of the Chairperson and the Secretary.

Section 15.           Effective Date.  This Third Supplemental Revenue Bond Resolution shall be effective immediately upon its adoption.

Adopted and signed on the 2^nd day of September, 1999.

ADJOURNMENT

On motion by Commissioner O’Leary, seconded by Commissioner Creamer, the meeting adjourned at 12:05 p.m.

/s/ Mary E. Sova, Secretary

Filed:          September 3, 1999

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Marilynn Slade, City Clerk